How Much Will a Minor Accident Affect My Auto Insurance Rate?

Rate increases after an accident depend on numerous factors.

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There's not widespread agreement on the right answer to the question of how much your auto insurance rate increases after a minor accident. Some sources say flatly that after a fender bender with no injuries where you're not at fault, it won't go up at all; others are less optimistic. The answer also depends on what you mean by "minor," which state you live in, which carrier handles your auto insurance and even which car you drive. Accounting for these variables, the general consensus is that failing appropriate responsive measures such as "accident forgiveness," which is not available in all states, your insurance is likely to go up more than you'd like. Here are details, with worst and best case examples.

The Worst Case

Research reported in Money Watch determined that after a single chargeable accident with a $2,000 damage claim, the average auto insurance rate increase was 41 percent. If you haven't had occasion to take your car to a body shop in recent years, $2,000 might signify something more than "minor." But, in fact, a single sideswipe that only grazes a couple of body panels can run even higher.

The same researchers concluded, however, that if the accident wasn't your fault, "payments shouldn't be affected." Other insurance sites aren't so sure. A survey concluded that, "You may find that your rates rise even when you didn't cause the accident."

One thing agreed upon by both of these sites and several others: If you have an accident with any of the following characteristics, your insurance rate could increase significantly, sometimes by more than 100 percent:

  • Second accident in a year. It doesn't really matter if both were minor and neither were charged.
  • Chargeable accident: If the insurance company finds you caused the accident, or were even a contributor, however minor your contribution, your rates will rise.
  • Bodily injury: If someone gets hurt in your accident, your rates will almost certainly rise.
  • Spotty or just plain bad driving record: If you've had a history of accidents or traffic tickets, your insurance company will take that into account, even if your latest accident was minor and you weren't at fault. 

The Best Case(s)

If you're going to have an accident, arrange to have it in Maryland! While the national average rate increase after a single accident is 41 percent, the average in Maryland is only 22 percent.

Another good state to have your accident is New York, where state law forbids any rate increases after an accident where you're not at fault.

There's a Downside

Legislating against high rate increases after a minor or nonchargeable accident can be an act of pushing on a string. Insurance companies operating in states like New York with regulations prohibiting rate-rises for minor or nonchargeable accidents have maintained profitability by raising auto insurance rates in those states; generally, far above the national average.

Similarly, companies operating in states with more stringent auto insurance regulation – California, for example – raise rates in specific _unregulate_d areas far above the national average. California doesn't regulate rates for chargeable accidents and although the national average increase after a driver's first chargeable accident is around 41 percent, in California the increase is 92 percent.

Other Factors Influencing Rate Increases

If you drive an expensive or exotic car, not only will your rates be higher generally, they may increase more than the national average after even a minor, nonchargeable accident.

While some companies will give you a pass on your first accident – Geico, for example, has a program to achieve that at no additional cost – other companies hit you pretty hard. State Farm Insurance increases your rate by a relatively modest 8.5 percent after a single accident, but Progressive Insurance raises your rate by 49 percent.

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About the Author

I am a retired Registered Investment Advisor with 12 years experience as head of an investment management firm. I also have a Ph.D. in English and have written more than 4,000 articles for regional and national publications.

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