How Long Does an Accident Stay on Your Insurance?

by Robert Morello
Fender benders can add up to big money once your insurance rates rise.

Car accidents are a no-no if you want to keep your insurance rates low. If you are involved in an accident in which you are at fault, your insurance carrier is likely to raise your premium and keep it raised to offset any claims made or added risk. To understand how long you can expect to pay more, you will need to better understand how your insurance works.

Rate Hike

The rate hike that results from your involvement in some type of car accident is typically assessed as your new policy comes into effect. For most drivers, this is once per year. The amount and length of the rise in rates are directly determined by the accident itself. The insurance company raises your rates to help recoup any extra expenses caused by the claim, so the severity of the damage and the overall payout amount will be major factors in the determination.

Time Frame

In many states, car insurance companies are not allowed to raise your rates for more than three years if that hike is the result of an accident and you have not been involved in another accident since. Insurers assess accident surcharges when an accident occurs, but they cannot continually apply them to your policy. Your involvement in a single accident should not lead to a lifetime of penalties, so most states place caps on what you can be charged and for how long. Check with your insurance company to find out the rules in your state.

Free Pass

Many car insurance providers offer a form of free pass to clients with a certain level of coverage. These passes allow for a single accident without a rise in rates. The specifics of each pass policy differ from one carrier to the next, so don't be too confident about your ability to dodge a hike. Some only apply to claims that are under a certain dollar amount, while others will grant you a full pardon no matter the claim amount as long as you've been accident free for a certain number of years.

Not My Fault

The question of which driver caused the accident can sometimes have bearing on the amount and length of a rate hike, or whether your rates will be raised at all. In some states, insurance companies are not allowed to raise your rates if you prove that the accident was not your fault. However, as of publication, in 12 states including New York, Florida and Massachusetts, the opposite is true. Rates can be raised for anyone involved in an accident in these states, regardless of fault and for the time period deemed suitable by those states.

About the Author

Robert Morello has an extensive travel, marketing and business background. He graduated with a Bachelor of Arts from Columbia University in 2002 and has worked in travel as a guide, corporate senior marketing and product manager and travel consultant/expert. Morello is a professional writer and adjunct professor of travel and tourism.

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