How Long Does an Accident Stay on Your Insurance?
When you’re involved in a car accident, there are a lot of things to sort out. You might have to deal with the police, doctors, attorneys, and of course, insurance companies.
Once you get past the immediate shock of an accident and take care of the pressing needs required to get your life back on track, one of the things you’ll probably want to know is how long an accident will impact your life.
Assuming you recover fully from any injuries, that your car has been repaired, and other parties in the accident have been provided for, one of the few remaining questions will be how long an accident will stay on your driving record because it could have a direct impact on your wallet or pocketbook. If you’re at fault, and sometimes even when you are not, an accident can cost you hundreds or thousands of dollars in increased insurance premiums for as long as an accident appears on your driving record.
Unfortunately, there is no simple or single answer to this question; much of the answer will depend on the severity of the accident, if you were at fault, and where you live. The good news is there are some things you can do to counteract a premium increase due to an accident as well, so you may not be completely stuck if you’re involved in a collision.
Knowing how long an accident will stay on your record is important, but you should also be aware that there are several factors that go into determining the car insurance rate you’ll pay:
- Vital statistics. Your age, gender and number of years of driving experience.
- Where you live. Statistically, drivers in some places are just at more of a risk for accidents than in other places.
- Credit score. Some insurance companies use this as an indication of how much risk you might be while driving. Be aware that this factor is not allowable in all states.
- How often and how far you drive. More miles and time spent on the road translates into a greater risk for accidents.
- Driving habits. Insurance companies also look at how and when you drive.
- Occupation. Some occupations are considered to be more at risk or safer by some companies. This is also not an acceptable factor in some states.
- Accident record. More accident claims translate into a higher risk for auto insurers.
Because insurance is regulated at a state level, where you live will have a major impact on how long an accident will remain on your driving record. Every state is different, and not just in the amount of time, but taking into consideration the circumstances of an accident as well.
Here’s a sampling of how long an accident will stay on your record in certain selected states:
- California – Most offenses stay on a driving record for either three years or 10 years. Car accidents stay on a record for three years from the date of the accident. DUI convictions stay on a record for 10 years.
- Colorado – Complete driving records are available for a period of seven years, including citations, accidents, violations and fines.
- Florida – Traffic violations remain on a driving record for three to five years and severe violations will remain even longer. Alcohol-related violations stay on a record for 75 years.
- Georgia – If no ticket is issued, it will not appear on your record. Otherwise, most violations and accidents stay on your record for seven years.
- Texas – Accidents and tickets stay on the state’s motor vehicle agency records for three years. DUI infractions stay on a driving record forever.
- Michigan – Any tickets due to moving violations stay on state records for two years from the conviction date. Accident convictions stay on the state records for at least seven years from the conviction date. DUI convictions are permanent, as are convictions for a fatality.
- New York – An accident stays on the state motor vehicle record during the year it took place and for the following three years. It is removed on January 1 of the fourth year after the accident.
If you’re trying to determine how long an accident will stay on your driving record, check with your insurance company or with your state’s motor vehicle department.
How Much Will Your Car Insurance Increase After an Accident?
The answer could be zero. The answer could be a lot. But for the most part, the answer is somewhere in between because there are so many variables that go into a rate increase decision.
On the low end, if an insurance company has an program in place that forgives accidents, then your first accident could result in a zero increase in premiums. But you’ll have to meet certain requirements for this to happen.
You shouldn’t see a premium increase if you’re not responsible for the accident either. One stumbling block is if you live in a state where no-fault insurance is in place. If that’s the case, then both parties in an accident will end up paying for some of the losses incurred in an accident. And when an insurance company has to pay out on your policy, you can expect that you’ll see some amount of an increase. However, some states prohibit insurance companies from raising your premiums after accidents that weren’t your fault.
The other scenario where you might not see a bump is when an accident is minor and there’s very little damage. Even if you’re the one who is at fault, if it’s only a scratch or two, then you might avoid a premium increase. This will vary from state to state. A premium increase after an accident will usually last anywhere from three to five years but will also vary by company and state.
You can expect a percentage bump up when an accident is more serious, when you are primarily at fault and/or when you receive a ticket as part of the accident. How much of a bump will depend on the particulars of your case, but a 25 to 50 percent increase or more might be in your future.
A 2016 study by InsuranceQuotes revealed the five states that reported the largest premium increases after a single auto claim worth $2,000 or more were California (63.1%), New Hampshire (60.3%), Texas (59.9%), Massachusetts (57.3%), and North Carolina (57.3%).
Conversely, states with the lowest premium increases after a similar claim included Maryland (21.5 percent), Michigan (26.1 percent), Oklahoma (27.9 percent), Montana (30.2 percent), and Kentucky (30.6 percent).
Not surprisingly, rates tend to jump the most when a driver causes an accident where a bodily injury is involved. The least significant jump in rates were those accidents involving comprehensive claims.
How Long Does an Accident Affect Your Car Insurance Rate?
There is no single or simple answer to this question. Insurance companies take into account where you live, if you were at fault, whether or not you got a ticket, and how serious the violation was in deciding the length of time your rates may be affected. Who you are insured by will also be a consideration as well.
Minor accidents and violations can stay on your record for three to five years on your state’s motor vehicle agency. However, if you have a more serious conviction, such as a DUI where an accident took place, this can stay on a driving record for 10 years even if you were not at fault in places such as California. But in Florida, terms are much more onerous, with alcohol-related accidents staying on a person’s driving record for 75 years!
Some states limit how far back an insurance company can consider at-fault accidents when determining a driver’s insurance premium. For example, Massachusetts limits the look-back period to no more than five years. And if you were not at-fault in an accident, then it may not count against your record and impact your insurance premiums, but this is not always the case. In other instances, state laws prohibit insurance companies from raising your rates after an accident if it was not your fault.
In jurisdictions where premium increases are allowed after an accident, assuming there are no aggravating factors, increases will last three to five years. The surcharge due to an accident may also decrease as each year goes by, assuming you do not get into any more accidents.
How Much Does an Accident Affect Your Car Insurance?
Aside from the physical and emotional trauma that often occurs with people in car accidents, there is also an overarching financial concern as well. Many people worry that if they are in a car accident that their insurance rates will go up for many years. In fact, many people hesitate even filing a claim at all because they attempt to weigh the financial pros and cons after an accident.
There is no “one size fits all” response to this very real concern. Several factors come into play when determining if and how much an accident will affect your car insurance.
- Who was at fault? If you were not at fault, then there’s a chance your premium will stay the same. But if you were responsible for the accident, you’re more likely to experience a rate hike. Things get a bit more complicated if you live in a no-fault state which means that both insurance companies will pay for some of the costs of the accident. Like it or not, in a no-fault state, there’s a good chance your rates will rise no matter who caused the accident.
Premium bumps can vary widely, too. For example, according to a 2015 industry study, Massachusetts drivers saw a nasty premium spike of 76% after just one claim. Conversely, Maryland drivers saw an average increase of only 22% under the same circumstances. Overall, the same study found that drivers who make a single claim of $2,000 or more could expect an average premium increase of 41%.
- How severe was the accident? It’s one thing to get a scratch on your paint, a bang on your bumper or a pushed in quarter panel, but quite another set of circumstances if your car is totaled. The more damage, the more the insurance company will have to pay, and that could lead to a greater rate hike. Also consider that if someone is injured and you were currently getting a reduced rate because you have been a good driver, you could lose that benefit and a resulting 20-25% discount if you were at fault.
- What is my driving record? If you have a long history of no incidents (accidents and tickets), and you have been with a company for a long time, then you may be considered more valuable as a customer to an insurance company. This is because safe drivers are cheaper for car insurance companies to provide coverage for, and as a result, you may see less of a premium hike than someone who has a poor driving record.
- Does my insurance company offer accident forgiveness? Some companies reward good drivers with accident forgiveness, meaning that your first accident while covered under the company will result in no rate hikes. There is no auto insurance industry standard when it comes to defining what accident forgiveness is, so terms will vary from company to company and from state to state. For example, GEICO currently offers accident forgiveness to its customers, except in California, Connecticut and Massachusetts. This benefit is not offered on every policy, and terms and conditions are governed by state laws and regulations.
How Can You Reduce Your Car Insurance After an Accident?
There are strategies you can employ to try and keep your out-of-pocket car insurance expenses in line following an accident. Here are some things to consider:
- Increase your deductible. It’s true that you’ll trade a lower premium on the bet that you will be a safe driver who won’t get into an accident where you will end up paying more if you do. But consider that if you increase your deductible from $200 to $500, according to the Insurance Information Institute, you could reduce coverage costs by 15-30%. Bump the deductible and you could be looking at as much as a 40% reduction.
- Consider bundling your coverage. Some insurance companies are also in the business of providing other kinds of insurance. You can enjoy a nice discount if you buy renter’s or homeowner’s insurance from the same company who sells you your car insurance.
- Consider other possible discounts. If you drive an older car, now may be the time to think about dropping your collision or comprehensive coverage. Also make sure that the number of miles you drive is accurately reflected in your policy. The less miles you drive, the less risk you are for an insurance company, and rates are often based using the number of miles driven as a consideration.
- Report every accident to your insurer. Even if you are just in a fender bender, make sure to report it to your insurance company. How can this save you money? The simple answer is that it provides you with protection against legal actions by the other party that may not take place for months after the accident. If you don’t report the accident, you and not the insurance company could be on the hook for legal expenses, medical bills, vehicle damage and any other judgments in the plaintiff’s favor. It’s easy to see how this could quickly exceed any bump in policy costs you might experience.
- Shop for a new policy. This one may appear to be a bit obvious, but if you think you can find a better deal, or you don’t like how you’ve been treated due to excessive increases, then explore the marketplace to see what else is available. If you do, make sure you don’t base a final decision on strictly premium costs alone. Research companies online and through consumer publications. Also check with your state insurance department for customer satisfaction surveys and at A.M. Best to make sure an insurance company is financially stable.