It takes 3 to 5 years for car insurance to go down after an at-fault accident in most cases. Three years is a common penalty period for property damage claims. Insurance companies penalize drivers longer for accidents causing serious bodily harm or resulting from reckless or intoxicated driving. Premium increases vary widely by state and insurer, but the average increase is 41% after a single claim of $2,000 or more.
Rates increase after an at-fault accident both to pay for the fees associated with filing a claim and to compensate the insurer for taking a higher risk. Drivers who have caused one accident are statistically more likely to be involved in another one.
Of course, if you pay for a policy with “accident forgiveness,” your rates won’t be raised for your first at-fault accident. Even without accident forgiveness, some insurance companies may give you a pass if it’s your first auto accident on a spotless driving record. Also, minor fender benders with less than $2,000 in damage may not trigger rate hikes.
However, no matter how minor your accidents are, if you have more than one within 6 years, or you have a combination of tickets and claims within 2-3 years, you are likely to face higher rates. Sometimes, it’s cheaper to pay for minor accident damage out of your pocket than to file a claim and trigger a rate increase.
Unfortunately, even if the accident you’re involved in isn’t your fault, you may find your insurance premium going up if you make a claim. This practice is prohibited by some states, but a study by the Consumer Federation of America found that most drivers who have made claims for not-at-fault accidents experienced rate increases of 8%-12%. For the insurance company, how much you’ve cost them is the most important consideration.
If age or inexperience, rather than accidents or violations, are the cause of your high premiums, you should see some decrease each year. If you’re a young driver, the biggest drop will come when you turn 25. If you are an older new driver, the largest decrease will come when you have five years of safe driving behind you.
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