How Much Does Car Insurance Go Up After an Accident?

How much does car insurance go up after an accident in Los Angeles, CA? As of 2024, and according to ValuePenguin, auto insurance rates increase by an average of 49% if you caused the accident. This equates to an average of $80 per month for full coverage.

Where you live greatly impacts how much you’ll pay for insurance after an accident. California sees the highest rate increases. An accident in California can double full coverage insurance rates, while in Alaska, rates only rise by 26%.

Whether or not you are at fault for the accident, rate changes depend on your insurance company, the coverage policy you have, and state regulations. Motley Fool provides this example:

For a policy with:

• $100,000 bodily injury coverage per person
• $300,000 bodily injury coverage per accident
• $100,000 property damage coverage

In California, premiums increase by 68%.

For instance, if a driver in California currently pays $1,200 annually for coverage ($100 monthly) and is found at fault in an accident, their premium could rise by 68%. This means instead of paying $1,200 annually, they would pay $2,016 ($168 monthly).

How Much Does My Rate Increase If I Am At Fault?

If you were responsible for the accident, your premiums are likely to rise depending on the severity and consequences of the incident. On average, full coverage auto insurance rates increase by 49% after an accident. This varies by insurer. For example, State Farm has the lowest rate increase after an accident, at just 24%.

This increase is generally unavoidable, even if you switch insurers, as the accident remains on your record for three to five years. Your rates will spike most at your first renewal period after the accident and gradually decrease over time. The further away the accident is, the less it will impact your rates.

Several factors affect the rise in your insurance rate, including:

• The severity of the accident.
• Your driving history.
• Your insurance company.
• State laws where you live.

If you caused an accident within the past six months and filed a liability claim, expect your rates to rise about 60% at your next policy renewal. That increase will decrease over time: rates may be about 47% higher than normal after two years, and only 2% higher after four years.

How Does My Rate Change If I Am Not At Fault?

If the accident was not your fault, your insurance is less likely to increase. This is because the other driver’s insurance should cover any damages or injuries. However, some companies still raise rates slightly, even if you weren’t at fault—especially if you’ve filed multiple claims in recent years.

One accident doesn’t always lead to rate increases, but if you’ve been involved in several accidents—regardless of fault—your insurer might raise your premiums or refuse to renew your policy. Insurers may consider frequent accidents as signs of high-risk driving behavior.

Your rates may also rise if you had a no-claims discount prior to the accident. This is more likely if you need to file an uninsured motorist, underinsured motorist, or collision claim after a hit-and-run.

How Do Insurers Calculate Rate Increases After an Accident?

When insurers adjust rates following an accident claim, they use what’s known as a “surcharge schedule.” Most insurers follow standards set by the Insurance Services Office (ISO), allowing a 20% to 40% increase to the insurer’s base rate after an accident claim.

The base rate represents average rates before discounts or adjustments, plus the company’s claims processing fee. For multi-vehicle policies, the surcharge is 20% of the base rate for the first two vehicles on the policy and 40% for a single-vehicle policy, according to ISO.

For example, if your policy covers two vehicles with premiums of $300 each, and your insurer’s base rate is $400, a 20% surcharge would add $80 for each vehicle, resulting in a total rate increase of 27%. However, each insurer sets its own surcharge schedule, subject to state approval.

What Is “Accident Forgiveness”?

“Accident forgiveness” is a loyalty benefit offered by many major insurers. It is typically reserved for the best customers—those with no prior accidents or traffic violations while insured.

Here’s how it works: If you have a clean driving record, your insurer may ignore your first accident and not raise your premium. Some insurers may even reduce your deductible by $100 for each year you maintain a clean record after an accident.

The specifics vary by company. Some offer accident forgiveness immediately, while others require several years of a clean driving record. Additional requirements, such as no traffic violations during a set period, may also apply.

If you are frequently involved in accidents, especially if you are at fault, you may not qualify for accident forgiveness, and your rate will increase.

Which Insurers Offer “Accident Forgiveness”?

Insurers that commonly provide accident forgiveness include:

• State Farm
• USAA
• Geico
• Progressive
• Liberty Mutual
• Nationwide
• Travelers
• The Hartford

Can I Reduce My Insurance Costs After an Accident?

Regardless of fault, there are steps you can take to minimize premium increases:

1. Report the Accident Immediately
   Even if you’re not at fault and no one was injured, it’s wise to notify your insurer. Failing to do so could result in a denied claim, especially if other parties involved accuse you of fault.
2. Take Defensive Driving Classes
   Particularly if you caused the accident, insurers often view this as an effort to improve driving habits. However, if the accident involved alcohol or substance use, this may have limited impact.
3. Increase Your Deductible
   Raising your deductible could lower your premium. Note that this means you’ll receive less compensation in future accidents. Discuss this strategy with your insurance agent.
4. Improve Your Credit Score
   Better credit can lower your insurance rate in California. Pay debts on time, avoid overspending, and explore ways to boost income.
5. Consult With a Car Accident Lawyer in California
   If you’ve been injured in a car accident in Los Angeles, contact My Lawyer Mark to protect your legal rights. Don’t let a car accident jeopardize your life and finances.

For a free consultation, call us at (866) 721-5808.