If you're at fault, your insurance will pay for damage to the vehicles, but your rates will also rise

Car Crash / Do You Have an Auto Claim? Here's How Your Insurance Will Be Affected
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March 20, 2017

So you've been in an accident, and it was your fault. You know that your insurance company will pay to fix the damage to both your vehicle and the other party's, but what else will happen when you file a claim?

Most of the time, being at-fault in an accident will result in your rate going up, and there are several factors that influence just how much it will rise.

Mitigating Factors

Depending on your insurer, your rate may rise very little. GEICO, for example, examines several factors involved in the situation before making a decision about rates, including your driving record, how many claims you've made in the past, and how much GEICO has paid out to you for past claims.

Online insurance company Esurance also takes several aspects of the situation into consideration before deciding whether or not to raise a driver's rate.

Likelihood of Rates Rising

If you're insured with either GEICO or Esurance, you're more likely to see a jump in your premiums if you are found to be at fault in a major accident.

However, some insurance companies raise their customers' rates even if they weren't at fault in the accident. They do this because they have figured out that drivers who have been in one accident are statistically more likely to become involved in another, even if the first was not their fault. Statistically, these customers are a bigger risk to the company.

Some states, such as New York and Massachusetts, regulate the amount of the increase your rates will experience after an accident, regardless of which party was at fault. Others, which are known as no-fault states, make each driver's insurance company pay for part of the costs of an accident whether their driver was at fault or not. In these states, your premium will probably go up even if the other driver caused the accident.

How Long Will the Increase Last?

Rate increases due to accidents are not permanent. Esurance looks at many factors to determine how long they will stay elevated, including how severe the accident was, which party was at fault, and whether or not alcohol was involved.

Some states, such as Massachusetts, regulate the number of years that insurance companies can take into account when calculating drivers' premiums. Others do not. You can usually expect your rates to stay elevated for three to five years.

How Much Will the Rates Go Up?

Then there's the biggest question of all: exactly how much will your rates rise after you're in an accident. Once again, many things influence this decision: who was at fault, whether or not there were injuries, whether or not there was significant property damage, whether or not alcohol was involved, and whether or not anyone was speeding.

At-Fault Rate Increases

$300 or less: Damages Under $2,000
$300-$600: Damages Over $2,000
$400-$800: Injury Crash
$1000+: Multiple Crashes & Damages Over $2,000

In 2016, NerdWallet found that rates generally go up by $300 or less per year for an at-fault accident that resulted in less than $2,000 of damage. This amount goes up to $300-$600 per year if the accident led to $2,000 or more in property damage. If any human being is injured in an accident you caused, your rates will generally rise by $400-$800 per year.

If you're at fault in more than one accident that caused property damage of $2,000 or more, you could see an increase of $1,000 or more per year.

However much your rate goes up, it will not happen instantly. Insurance companies will inform you about upcoming increases in your premium. If and when that happens, you can take the opportunity to look at other companies and find out whether you might get a better rate elsewhere.

References: WiseBread, GEICO, Esurance, NerdWallet