How to Lower Car Insurance After an Accident: Everything You Need To Know

·5 min read
Photo credit: Yellow Dog Productions - Getty Images
Photo credit: Yellow Dog Productions - Getty Images

If you recently made a claim on your auto policy, you probably have questions about how to lower car insurance premiums after an accident. Even when you did not cause the crash, your rates for coverage will go up after any claim because you now represent a higher risk to the insurance company. According to statistics, drivers who get in one accident are more likely to get in a subsequent accident. Insurers also charge fees after you file a claim and account for these costs, such as agent time, in your new premium price. Try these strategies to obtain a lower price on auto insurance after a car accident.

Seek Coverage Elsewhere

Auto insurance website The Zebra reports an average annual auto insurance increase of about $767 after an accident, representing about a 50 percent increase. Because this accident will remain on your record for up to five years, it could result in more than $2000 in additional insurance expenses overall.

To avoid this effect, many insurance experts recommend switching insurers after an accident. Sometimes, you can find a better price simply by going with a different firm. You should get prices from other auto insurance carriers at least once a year to see if you can save, regardless of whether you have had a claim in the past 12 months. WalletHub notes that you can often get a coverage discount with this strategy.

According to The Zebra, you will likely find the most affordable coverage rates after an accident from State Farm, GEICO, or USAA, depending on the state where you live. However, USAA only writes policies for current and former military members and their families. The Zebra lists these average rate increases by company after an auto accident:

  • $304 - State Farm

  • $340 - USAA

  • $701 - Farmers Insurance

  • $710 - Liberty Mutual

  • $721 - GEICO

  • $826 - Nationwide

  • $1129 - Allstate

  • $1168 -Progressive

Update Your Coverage

Changing the limits and terms of your auto insurance policy after an accident can also save you money. Money Under 30 recommends increasing your deductible to achieve a lower monthly payment on your insurance premium. You can also decrease your liability coverage limits as long as you continue to carry at least your state minimum required amounts. Just make sure you don't cut your coverage so much that you will be left with significant out-of-pocket costs if you cause an accident.

If you have comprehensive coverage on your vehicle, dropping this optional policy can also lower your payments. You can even temporarily discontinue this type of coverage until it becomes affordable again after six to 12 months without claims. Comprehensive coverage pays for the cost of non-collision damage to your vehicle, such as theft, flood, or fire. However, if you lease or finance your vehicle your contract may require you to carry this type of policy or risk repossession of your car.

Go to Driving School

Many insurance companies will discount your rates if you complete a defensive driving or driver education course. In fact, some states even require insurers to provide this type of auto policy discount. Many classes are available online.

Defensive driving classes cover road safety techniques, ways to avoid accidents, and traffic laws in your state. According to Car Insurance Comparison, parents can save about 10 to 20 percent on their auto insurance premiums when teens on their policy take a drivers education course as insurers associate the completion of defensive driving classes with lower accident risk.

Value Penguin notes that the most generous discounts are usually available to drivers who are younger than 25 or older than 60, so if you're insuring drivers in these age brackets it pays to shop around to find insurance companies that offer major discounts for defensive driving.

Request Forgiveness

If you have an accident, ask your insurer about forgiveness programs if you aren't already enrolled in this type of program. You might be eligible to avoid a rate increase if you have not had an accident in three to five years or if this is your first accident claim. Motor1 reports that these firms forgive customer accidents:

  • State Farm

  • Progressive

  • Nationwide

  • Liberty Mutual

  • The Hartford

  • Allstate


Work on Your Credit

If you have below-average credit, your score can result in higher insurance rates in many states. The insurance company associates poor credit scores with a higher risk for claims. Taking steps to improve your credit, like paying bills on time and reducing your overall amount of debt, can help you earn lower auto insurance premiums.

Look for Discount Programs

WalletHub lists these common types of discounts for auto insurance customers:

  • Safe driving discounts of up to 20 percent for three to five accident-free years

  • Membership discounts of up to 25 percent for those who belong to charitable organizations, community groups, professional organizations, alumni associations, and other clubs

  • Anti-theft and safety discounts of up to 25 percent if your vehicle has daytime running lights, airbags, antilock brakes, and other safety and security equipment

  • Defensive driver education discount of up to 10 percent

  • Paperless billing discount of up to 3 percent

  • Upfront and auto-payment discounts of up to 5 percent

  • Multiple policy discounts of up to 25 percent

Motor1 notes that some insurers also offer a senior discount for older drivers. After an accident, check with your agent to see about eligibility for these and other savings programs. You should also be aware of the other factors that can influence your auto insurance premiums, such as age, geographic location, and the vehicle make and model you drive.

While you may avoid telling your auto insurance company about an accident to avoid the inevitable rate increase, doing so can cause more harm than good. If the other driver sues you and you did not file a claim, you can lose your coverage and end up on the hook for legal bills and medical bills. Instead, notify your agent right away and then follow this guide about how to lower car insurance after an accident.

Check this out if you need additional information, resources, or guidance on car insurance.


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