Car insurance after an at-fault accident: surcharges, timelines and options

What happens to your car insurance after an at-fault accident

Your policy pays the claim first: liability coverage pays the other driver's damage and injuries, and collision pays to repair your car if you carry it. The price change comes later, usually at renewal, when the insurer reviews the claim and your driving record. Depending on the company and the state, an at-fault accident can lead to:

• An accident surcharge. The California Department of Insurance defines a surcharge as an extra charge added to the premium, usually for an at-fault accident or a moving violation.
• A lost discount. Safe-driver and claim-free discounts often disappear after an at-fault crash. In California, the Good Driver Discount alone means rates at least 20% lower, and an at-fault accident that injures or kills someone makes you ineligible.
• A different rating tier. Some insurers move drivers with recent accidents into a higher-priced tier rather than adding a separate surcharge.
• Non-renewal. After several accidents or claims, an insurer may decline to renew. You can still buy coverage elsewhere, sometimes from companies that write high-risk auto insurance.

Read how insurance rates change after a claim for the claims side of the story, and how your claims history affects price.

How fault affects your premium

Insurers decide fault for rating purposes, and many states set limits on how they do it.

• California. If you are at least 51% at fault, your premium can go up when you renew. If the accident was not your fault, the insurer does not charge you more.
• Massachusetts. An accident counts as at-fault for the Safe Driver Insurance Plan only when the driver is more than 50% at fault and the insurer paid more than $1,000 on the claim, not counting the deductible.
• Pennsylvania. State law blocks surcharges, rate penalties and driver record points when the insurer's total claim costs for the past 3 years stay below a dollar threshold that the Insurance Department raises from time to time by public notice. It also bars a surcharge just because the insurer paid a first-party medical claim.

When both drivers share blame, states and insurers use comparative negligence, the percentage of fault each driver carries. That percentage can decide whether a surcharge applies at all. If you disagree with a fault decision, ask your insurer for its reasoning in writing and what evidence would change it. Massachusetts requires insurers to re-rate a policy when a court or the state Board of Appeal reverses a fault finding.

How long does an accident affect car insurance rates?

There is no single national rule. Each insurer files a rating plan with the state that says how many years of accidents it surcharges, and some states set their own limits. These examples come from official state rules:

In most states, the effect is largest at the first renewal after the accident and fades as it ages, provided no new accidents or violations are added. Ask your insurer when the surcharge will drop off, and check your renewal notice for the date. Read more about how your driving record affects your rate.

Accident forgiveness

Accident forgiveness is a feature some insurers offer that stops your rate from going up after a first at-fault accident. It goes by different names and works differently from one company to the next, but the common points are:

• It may be earned or bought. Some companies grant it after a period with no accidents; others sell it as an optional add-on.
• It usually covers one accident. A second at-fault accident within the company's time window is normally surcharged.
• It does not erase the accident. The crash still appears on your state driving record and in claims databases, and another insurer may surcharge it if you switch.
• It is not available everywhere. State rating rules affect whether and how insurers can offer it.

Whether it is worth paying for depends on the price of the add-on, your driving history and how long you plan to stay with the company. Ask for the exact terms in writing before you rely on it.

Should you file a claim for a small accident?

Some drivers pay for minor damage to their own car out of pocket to avoid a claim on their record. For example, if a repair costs $900 and your collision deductible is $500, a claim would pay only $400, and that claim might cost more than $400 in higher premiums over the next few years. On the other hand, a crash that looks minor can turn into an injury claim later, and your policy requires you to report accidents to your insurer promptly. Reporting an accident is not the same as asking the insurer to pay for it, and staying silent can put your coverage at risk if the other driver files a claim.

State reporting rules apply regardless of insurance. In California you must report a crash to the DMV within 10 days if it caused more than $1,000 in property damage or injured anyone, whether or not you caused it. See filing a claim for how the process works.

What to do right after an at-fault accident

1. Make the scene safe and check for injuries. Call 911 if anyone is hurt.
2. Exchange information. Get names, license numbers, insurance details and vehicle information from everyone involved.
3. Avoid signing statements about fault. The California Department of Insurance advises against signing fault statements or promising to pay the other side's damage at the scene.
4. Document everything. Take photos, note the location and time, and get a police report number if officers respond.
5. Tell your insurer. Report the accident promptly, even if you are unsure about filing a claim.
6. Meet state reporting deadlines. File any required DMV report on time.

Our guide on what to do after a crash goes through each step in more detail.

Shopping for car insurance after an accident

You do not have to stay with the company that surcharged you. Insurers weigh accidents differently, so the same record can produce very different car insurance quotes. A few points help you compare fairly:

• Compare the same coverage. Match liability limits, deductibles and optional coverage so you are comparing prices, not policies.
• Be accurate about the accident. Insurers check records, and a wrong answer can lead to a cancelled policy or a disputed claim.
• Ask how each company treats it. Ask how long it will surcharge the accident and whether the surcharge depends on the claim amount.
• Look for offsetting discounts. A defensive driving course, a telematics program or bundling may soften the increase.
• Time it well. Shopping again when the accident is about to age out of a look-back period can make a real difference. See shopping at renewal.

If no standard insurer will cover you, California's assigned risk plan (CAARP) and similar plans in other states place drivers with poor records with an insurer for at least liability coverage.

If you were uninsured when the accident happened

Driving uninsured turns an accident into a licensing problem. In California, your driving privilege can be suspended for up to 4 years if you are in a collision without proper insurance, no matter who was at fault, and you must then file proof of insurance for 3 years. Read our SR-22 guide for how those filings work.