Switching Your Car Insurance After an Accident

In the event of a car accident, the safety and welfare of you, your passengers, and all parties involved are the number one priority. The state of your vehicle, your financial situation, or pending insurance claim are all secondary.

Noting that, say you’ve been considering switching auto insurance providers, for one reason or another. You may have been in search of lower rates, better coverage, or some other factor. Is it OK to make the change immediately following an auto accident? Say the accident itself — and the likelihood of higher premiums, if you’re deemed the party at fault — is the reason you might want to start shopping around. Is now the right time to do it, or should it wait?

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What happens to your insurance rates after a car accident?

It mostly depends on the type of insurance coverage you have, and whether you’re at fault or not at fault for the accident.

Data from CarInsurance.com breaks down the average rate increases following an accident.

Accident or Comprehensive Claim

Average Increase (%)

Average Increase ($)

1 at-fault bodily injury accident

32%

$459

1 at-fault property damage accident over $2K

31%

$450

1 at-fault property damage accident under $2K

26%

$366

1 comprehensive claim over $2K

3%

$39

1 comprehensive claim under $2K

3%

$39

If you’re the at-fault driver in an accident with damages exceeding $2,000, the average premium increase is 31%. The biggest average increase at 32% comes after just a single at-fault bodily injury accident (when an accident causes injuries to another driver). The rate increase varies significantly depending on where you live.

The average increase skyrockets to 110% if you are involved in two at-fault accidents.

Why don’t comprehensive rates go up as much? Comprehensive covers damage to your own car, which isn’t as important to insurers as damage incurred to the other party. You’re responsible for the cost of repairs to your own vehicle. Comprehensive coverage also deals with incidents that don’t involve other motorists, such as a telephone pole falling on your car during a storm.

Another important factor in determining how much your insurance might go up is what state you live in, and sometimes, where the accident took place. According to the same data, policyholders in Minnesota, California and Louisiana will get hit with the highest insurance rate increases following an at-fault accident, with Minnesotan motorists risking an 87% hike to their rates! 

For example, say your annual insurance premium is $1,000 in Minnesota. Following an accident, your premium would jump by $870 a year. 

Rates can still climb when you're not at fault

That’s not fair, said anyone ever involved in a collision where you weren’t at fault. 

One of the most disappointing things — not counting bodily injury or damage to your car caused by someone else — is the possibility that your auto insurance rates, too, can be affected just from being on the receiving end of another careless driver.

The simple reason is risk. When you’re involved in an auto accident, it doesn’t matter if you’re at fault or not at fault. Insurance companies reason that whether you’re involved in just one or a few accidents, there’s a chance you’ll be involved in more. This may not make the most sense when you’re just driving along, minding your own business when someone rear ends you — and then, for your insurance provider to assume that you attract car accidents like some kind of magnet.

Thankfully, your premiums won’t spike as much as if you were the at-fault party. And in some cases, they may not be affected at all. Statistics show that last year, insurance rates for not-at-fault collisions raised by about $107. 

However, the more accidents you’re involved in, at fault or not, the less likely they’ll be willing to comply — and the more likely they are to raise your rates.

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What to expect if you switch insurance after an accident

The first thing to know is that you’re allowed to switch auto insurance carriers at any time. Switching can result in saving you hundreds of dollars. Every insurer determines their rates using a different formula, so it pays to get a few quotes.

Typically, if an accident claim has been filed against you, or if you’ve filed a claim against another motorist who was at fault, the claim will be handled by the insurance carrier you had when the accident occurred.

This means that if you switch insurance carriers following an accident, the incident won’t be reflected on your policy with a new insurer — at least, not yet.

Your driving record will eventually be updated through the Department of Motor Vehicles, and also your CLUE report. CLUE, short for Comprehensive Loss Underwriters Exchange, is a consumer agency-derived report that details the last seven years of your insurance claim history, plus the dates and details of involved car accidents, your insurer at the time, and information about your policy and any money paid by you, the insured.

So, if you were to switch insurers and receive an almost too-good-to-be-true premium, don’t celebrate just yet. It’s likely just reflecting your pre-accident driving record. Once your insurer obtains your CLUE report, they’ll adjust your premiums accordingly. And that rate is most likely going to go up. (While most auto accidents remain on one’s record for three to five years, more serious offenses, like a DUI, can remain for up to a decade. But it all depends on your state of residence.)

Does that mean you shouldn’t switch insurance carriers? Of course not! It’s always a good idea to shop your insurance and seek out money savings.

Tips on switching insurance 

Personal anecdote: After I was involved in a minor fender bender between my car and a sidewalk planter (don’t ask), I filed a claim and, as expected, my rates eventually went up. Coupled with regular increasing premiums, I felt my insurance was too expensive for the coverage I received, so I sought out new coverage. 

Here are some tips if you’ve recently been in an accident and are considering switching insurers.

1. Shop around. After you get a few insurance quotes, don’t simply settle on the insurer with the lowest price. Review the types of coverage and options carefully, then choose the insurance company that meets your needs right now. Some insurers base your premiums on the amount you drive, while others provide discounts based on good driving behavior. My insurance company has an app that monitors my driving activity and incorporates discounts that reflect safe driving. What’s more, they offered me roadside assistance and rental car availability for no extra cost, unlike other companies that charge extra.
2. Negotiate. I worked with my agent to determine the types of coverage I needed - and what I didn’t need. For myself, I concluded I really didn’t need as much comprehensive coverage as I thought, but I wouldn’t have known that unless I asked my agent where I can cut and snip across my policy to lower my bill. I discovered that my health insurer, in some cases, can pay for bodily damage costs, making the same coverage in my auto insurance a bit redundant. For you, negotiating could mean increasing your deductible to offset your annual or semi-annual premiums. Or, it could just mean asking for a lower rate, and seeing if the insurer will show good faith that you’ll be a better driver going forward.
3. Take extra measures. Driver’s ed courses through the DMV can help keep points off your license if you were involved in a moving violation (like speeding, or a collision), but they might also make an impression on your insurance carrier that you’ve been proactive in improving your driving record — or at least, making up for blemishes on your record. Informing your agent of these efforts can go a long way in that negotiation process. So, even if you switch carriers and your rates rise after a few months, ask if there are any steps you could take to get them back down again.
4. Forgive and forget. Some insurance companies may have a special clause or underwriting that stipulates they’ll forgive your involvement in an accident if it was your first mishap, without being penalized for it. However, if your prospective carrier doesn’t offer this, the simplest effort you can make is to ask them to not increase your rates. There’s no harm in asking. 

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The Final Word

I didn’t switch auto insurance carriers immediately following my fender-meets-planter road mishap, but I should have. I would have avoided an entire year of increasingly inflated rates. Not only did the incident eventually expire from my record, but seeking out a better provider, with better rates, better perks, and ultimately, better coverage, still serves me well each time I get behind the wheel.