Why Does a Car Accident Raise Your Insurance Rates Even if You … – The Motley Fool

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Published on Sept. 19, 2023
By: Christy Bieber
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Drivers who get into an at-fault car accident are seen as presenting a much greater risk to insurers. Because insurance companies price policies based on risk, it’s a lot more expensive to buy insurance coverage following a collision that a driver was to blame for. Depending on the state where the policyholder lives, insurance costs could go up anywhere between 4% and 92% with most people seeing increases in around the 35% to 60% range.
But, what happens when an accident happens that the policyholder was not responsible for?
Even though the insurer of the at-fault driver should be responsible for paying the bills, the crash victim could still find themselves with higher car insurance premiums going forward. A 2021 survey found an average $67 premium increase following a collision a driver was not to blame for.

Here’s why.

There are a few possible reasons why insurance policy costs can increase for drivers involved in a collision caused by someone else:
In some states, insurers aren’t allowed to raise premiums unless an accident causes a certain minimum amount of damage (as measured by the costs). But outside of those situations, a driver can expect almost any accident to raise their rates.

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It can be very frustrating to find insurance premiums going up after an accident — especially one a driver wasn’t at fault for. After all, it can seem very unfair to see more money going out of a checking account just because of becoming an accident victim.
The good news is, there are some options available. Drivers who purchase accident forgiveness insurance, for example, should not see their premiums rise following a collision. It’s also a good idea to shop around for new coverage after a crash, as another insurer may charge less than the current company post-collision.
By exploring these options, drivers can help to reduce any added costs that could result from a crash occurring.

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Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.
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