How Much Does Insurance Increase After Accident? (2025)

Types of Insurance

You may have many insurance policies that cover the liability arising from an accident. Examples include:

• Homeowner’s Insurance: Covers slip and fall injuries to guests in your home
• Business Property Insurance: Covers premises liability injuries in a business
• Business liability Coverage: Protects a company from liability for defective products
• Auto Insurance: Covers car accidents

Such policies are known as liability insurance. In these agreements, an insurer promises to pay third parties for any legal liabilities incurred by a policyholder. This is a complicated way of saying that victims get paid by the insurer after they prove someone on the policy was liable for their injuries.

Liability insurance is a form of spreading risk. Everyone buys insurance, and only a few will get into accidents. Since it could happen to anyone, everyone shares the cost and risk when purchasing it. However, insurers do not distribute the costs and risks equally. They charge higher premiums to people who pose a higher risk.

How Long Does an Accident Affect Your Insurance?

There’s no standard amount of time that accidents continue to impact your insurance rates. How long an accident will affect your insurance rates depends on several factors:

• Your insurance company
• The state where you live
• Whether you were at fault
• The severity and circumstances of the accident

However, most insurance companies will look back over the past three to five years of your driving history when deciding rates.

Factors Liability Insurers Use to Set Rates

The answer to “How much does your insurance go up after an accident?” depends on many factors. With only a few exceptions, the type of accident you had does not matter. These same principles apply to liability insurance policy premiums whether you hit a motorcycle or someone slipped in your bathroom.

Fault

Fault determines whether a liability insurer must pay a claim. Liability insurance usually excludes intentional acts. Thus, to prove liability, the other party must show you were negligent in causing their injuries.

Negligence means failing to exercise reasonable care. If you were driving, negligence might indicate that you were inattentive or careless; for example, listening to music on earbuds while driving caused an accident because you were distracted and hit another vehicle. If someone slipped on your floor, it might show you knew about a puddle on your floor but failed to clean it up promptly. Insurers will charge higher premiums for people who cause accidents.

Damage

If you were at fault for someone else’s injury, your insurer must pay the following expenses for the victim:

• Past and future medical expenses
• Income losses
• Diminished earning capacity
• Pain and suffering

More extensive damage and serious injuries will cost your insurer more money. The insurer must recoup these losses somehow, so it will likely raise your premium rates. Moreover, the more you cost the insurer, the more it increases your rates.

Additional Factors for Auto Insurance

If you caused a car accident, motorcycle accident or another kind of traffic crash, the insurer may look at a few additional factors when setting your premiums. Remember, the insurer is responsible for any liabilities you create. If you appear to pose a high risk, it will charge you a high premium.

After your crash, the insurer might look at the circumstances to determine whether to raise your rates or even reject you as uninsurable. These circumstances include:

• Did you get a traffic citation for causing the crash?
• Was your driver’s license suspended?
• Did the collision result from driving under the influence?
• Were you charged with reckless driving?

The insurer might also look at how the crash happened. Some drivers ask, “I rear-ended someone; how much will my insurance go up?” Rear-end crashes are common, and an insurer might not raise your premiums considerably if you get into a minor one.

How Much Does an At-Fault Accident Affect Your Insurance?

Car and truck accidents where you are at fault will almost always raise your insurance rates. While there’s no standard formula for calculating this increase, current research indicates that after an at-fault accident, full-coverage insurance premiums increase by an average of 49%.

The cause of the accident is one of the most important factors influencing your rate hike. For instance, if your accident resulted in your arrest for DUI, your rates will likely rise more than they would for an accident you caused while sober.

How much your rates go up also depends on your insurance company. For example, State Farm raises rates by an average of about 30% after an accident, but Geico raises rates by about 72%.

Insurance companies set your rates based on how much of a risk you pose to them. If you had a clean driving record prior to your accident, your rates likely won’t be raised as much as if you had several prior accidents.

If a Car Accident Is Not Your Fault, Does Your Insurance Go Up?

Some insurers raise rates whether you were at fault or not. However, this is not a uniform practice among auto liability insurers. If you were not at fault, the insurer has no reason to think you are a risky driver.

However, there is one exception to this rule. Some states require vehicle owners to buy no-fault insurance. This system was introduced as part of broader tort reform efforts to reduce litigation costs. Under this system, your insurer pays for at least part of your medical bills and income losses after a minor crash.

The no-fault name comes from the fact that everyone’s insurer pays the people in the cars they insure. Thus, even the at-fault driver receives insurance benefits in a no-fault system. No-fault insurers will almost always raise premiums after all crashes that result in a claim, even if you were not negligent, simply to recoup its payout.

Can You Prevent Your Insurance Rate From Increasing After an Accident?

If you are enrolled in an accident forgiveness program, you may be able to avoid rate hikes after an accident. There are two primary ways to get accident forgiveness:

• An insurer might offer it if you’ve been insured with them for a while.
• You might be able to purchase accident forgiveness as a policy endorsement.

Accident forgiveness has certain limitations. Typically, you must have been accident-free for a certain period of time. Most insurers allow you to use accident forgiveness once every three to five years.

Can You Lower Your Insurance After an Accident?

If you don’t have the option of using accident forgiveness, you probably won’t be able to completely escape a rate hike. However, there are several things you can do to lower your rates:

• Improve your credit score.
• Shop around for quotes from other companies.
• Increase your deductible.
• Remove coverage options you don’t need.

You can also ask your insurance agent about any discounts you may qualify for.

Learn More About Insurance With ConsumerShield

ConsumerShield educates consumers about their legal rights. After a crash, we evaluate your case and help you understand your options. We can also connect you with a lawyer to represent you in any litigation involving your accident. Contact us to schedule your free case evaluation.