How Being Involved in Accidents Impacts Car Insurance Premiums

Accidents are an unfortunate event most motorists experience at one time or another. Apart from the trauma and expense of accidents, such incidents have major implications for your car insurance premium. Knowing how being involved in an accident impacts your insurance rates is important for making informed decisions.

If you have been involved in an accident, insurance rates may increase significantly, even if you are not the one who is at fault. Insurers view any driver with an accident record as a high-risk driver, so the premium rates increase to help minimize losses.

In this article, we will discuss several factors responsible for an increase in premiums for car insurance after an accident.

Fault Determination

Car insurance premiums increase significantly depending on whether you were at fault for the accident, as noted above. If you were not, your insurance rates may still rise a little, but they will usually increase much less than if you were found to be at fault.

Insurance companies view those who cause accidents as a higher risk because the accident demonstrates that the claimant may be driving in a manner that will lead to more accidents.

Severity and Cost of the Accident

The severity of the accident and the costs incurred play an integral part in determining the increase in your insurance premium. Minor fender-benders, for which the damage is minimal and no one is injured, may result in a relatively small increase or, in regard to some insurance companies or circumstances, may not change at all.

But any accident with heavy property damage, injury, or loss of life is sure to trigger more massive hikes in premiums. Insurance providers regard such accidents as costly claims and thus always raise their rates to cater to the high risks involving such incidents.

Frequency of Accidents

If you get into several accidents in a relatively short period of time, your insurance company will see you at an even worse risk and drive your premiums up even more. Each successive accident compounds the problem by increasing your rates.

Insurance companies look at your overall driving experience when deciding risk and rate. If you have a record of accidents, even if it is not your fault, there is a greater chance of future claims coming the insurer’s way. This ultimately means that you could be charged more for the coverage or even have your policy canceled.


Accidents can greatly affect your car insurance premiums. It’s essential to know just how these changes are brought about so that you can plan financially. While it is true that premiums will generally increase after an accident, there are a variety of factors that mold the extent of this impact, including fault determination, accident severity, and your driving record as a whole.

It is important to drive safely, avoid potential risks, and keep a clean driving record in order to reduce the financial burden. The same can be further augmented by shopping around for insurance quotes, looking for discounts, or various policy options so as to help reduce, as far as possible, any increase in premiums after an accident.

Remember that one thing most insurance companies do is balance their risk with their premiums. How you drive will ultimately determine your rates.

So, being a safe driver means effectively saving yourself, others around you, and your future insurance rates at the same time.