Here's How a Claim Will Impact Your Car Insurance

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You sideswiped a parked car. Or maybe you slammed on the brakes too late and rear-ended the driver ahead of you. Whatever happened, the accident is clearly your fault. Now it's time to give your insurance a call.

When you file a claim, your auto insurer will pay for the repairs to your vehicle and, if you are at fault in the accident, whatever repairs are needed for other vehicles involved in the collision. Your insurer might also pay for any injuries suffered by you or other drivers.

But filing a claim also comes with a negative: In most cases, it will cause your insurance rates to rise. How much your policy's rate rises depends on a host of factors.

Mitigating Factors

On its website, Geico says that drivers' rates don't automatically rise after an accident. Instead, the insurer looks at several factors before deciding whether to issue a rate increase. These include your driving record, the number of claims you've made in the past, and the amount of money that the insurer has paid out to you during the life of your insurance policy.

Esurance also states that insurance rates don't automatically jump after an accident. The company says that minor accidents and fender benders don't always equal a rate increase, especially if you have a record of safe driving.

Fault matters, too, of course. Esurance says that if you weren't at fault in an accident, your premium might not jump.

When Are Rates Most Likely to Jump?

Both Geico and Esurance say that premiums are more likely to increase if you are found at fault in a major accident. Again, your past driving record plays a big role in determining not only if your rate jumps after a major accident, but by how much.

Your insurer, though, might increase your rate even if you weren't the driver who caused the accident. That's because car insurers have determined that even after an accident that isn't your fault, you are still statistically more likely to get into another accident. This makes you more of a risk to your auto insurer.

Some states regulate how much of an increase you'll see after an accident, no matter who was at fault. Consider New York. Here, insurance companies can boost rates only if you were found at fault in an accident that caused injuries or more than $2,000 in property damage. In Massachusetts, insurers can only raise your premiums if you are found to be more than 50 percent at fault in an accident.

You might also live in what is known as a no-fault state. In these states, each driver's insurer pays part of the costs involved in an accident, no matter who caused the incident. If you live in a no-fault state and file a claim, odds are that your insurance premium will rise even if the other driver was the cause of your accident.

How Long Before Your Rates Fall Again?

Fortunately, a rate increase isn't permanent. Esurance said that several factors play a role in how long your insurance premiums will remain at an elevated level after an accident. These include the severity of the accident, who was at fault, and whether alcohol was involved.

Some states will regulate how many years back insurers can look when calculating premiums. In Massachusetts, drivers' at-fault accidents can only impact their auto insurance rates for three to five years.

In general, you can expect your elevated rates to remain in place for three to five years.

How Much of an Increase Will You See?

Here's the big question: How much will your insurance rates rise after an accident? Again, this depends on a host of factors: Who caused the accident, were people injured, was there significant property damage, was speeding involved, were you drinking?

A 2016 report by NerdWallet found that rates typically rise by $300 or less a year for an accident that you caused resulting in under $2,000 worth of damage. That rate increase jumps to $300–$600 a year if you cause an accident with $2,000 or more in property damage. If you cause an accident that results in any human injury, your rates will typically increase by $400–$800 a year.

And if you are found at fault in multiple accidents causing $2,000 or more in property damage, your rates could rise by $1,000 or more a year.

If your rate is going to rise, it won't come as a surprise. Insurers will notify you of any upcoming increase. Geico, for instance, says it will send you information about any rate increases about 30 days before your policy is up for renewal. At that point you can shop around to see if another company might give you a better rate.

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