How Much Will My Rates Go Up With an Auto Accident?

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You had a car accident, and now you're wondering if your rates will go up and by how much. It all depends on a few key factors: Was the accident your fault? Have you had a wreck before? If so, how many? Have you filed a claim in the past? Also, the price increase hinges on the strictness of your insurer, the amount of damage and your state of residence.

Caused By You

If you caused the accident, and property damage resulted, you'll likely see your premium go up the next time it renews. So get ready, even if it's your first time. But wait. Some insurers offer accident forgiveness and overlook your first accident if the damage was limited, and no one was hurt. Of course, you'll need to have a clean driving record up to that point. It also helps if you've been with the insurance company for a while. Even if the company doesn't mention forgiveness, it never hurts to ask.

How High and for How Long?

If you do face a higher rate, the insurance company uses the cost of the accident to determine the amount and length of the increase. A major accident that's your fault costs you more than a minor one. Look for an increase of 25 to 50 percent, especially if you've had another at-fault accident within three years. Here's the silver lining: The extra charge gets lower and lower each year -- as long as you have no more accidents. Some states mandate this gradual decrease and require the insurer to remove it completely after three years.

Caused by Someone Else

If you didn't cause the wreck, you may be OK. In fact, some states do not allow auto insurers to raise rates on drivers who aren't at fault. Here's why: The insurance company for the driver at fault picks up most, if not all, the costs. There's one exception: You get in an accident that's not your fault, but the at-fault driver doesn’t have insurance. If you have uninsured-motorist coverage, your company covers the damage and injury. Except for this situation, you can generally apply the rule that as long as your company doesn't pay, you can avoid rate increases. But it's not guaranteed, especially if you've been in multiple accidents that weren't your fault. Your insurer may still consider you a higher risk, which translates to a higher premium.

Caused by No One

If a factor out of your control -- such as ice or snow -- led to the accident, you can still be on the hook for a rate increase if the company thinks you should have avoided the incident. Even though you didn't cause the accident, your company has to pay the claim because no other driver is at fault. Here's the bottom line: Expect a rate hike if your company pays the claim, or your rate may stay the same.

Paying for Damage Yourself

Sometimes you have a small fender bender that causes minor damage. The temptation is to work out something with the other driver and not report the incident to your insurer. Be aware that this can be a dangerous practice. Unless you have an agreement in writing, the other driver may try and bring charges against you later, even claiming you left the scene of the accident. It's always better to err on the side of caution. Call your insurer and give your side of the story.

Also, if you have minor damage that does not involve another person, such as backing into a tree in your yard, you can pay the repair costs yourself, particularly if the costs are below or near your deductible. No claim means you don’t have to worry about paying more for your premium.