Saturday, 15 October 2016

How Much Car Insurance Rates Rise After an Accident or Violation

Car insurance is one of the few things people own for decades and hope never to use. Many drivers avoid filing even minor claims after a car accident for fear of triggering higher premiums — either with their existing insurer or the next time they shop for coverage.



This concern doesn’t stop at just accidents, either. Many policyholders rightfully worry about moving violations, such as speeding tickets, lingering on their records and causing rate increases for years.

But exactly how much does car insurance go up after an accident or moving violation? NerdWallet crunched the numbers to illuminate the financial effects of these behind-the-wheel blunders:

Accidents
Speeding tickets
DUIs
Other moving violations
» COMPARE: Quotes through NerdWallet’s Car Insurance Tool

How much insurance rates go up after accidents
Type of accident Damage involved Predicted rate increase
Not your fault Any Typically no change
At-fault Under $2,000 $0-$300 per year
At-fault $2,000 or more $300-$600 per year
At-fault Any causing human injury $400-$800 per year
Multiple at-fault accidents $2,000 or more $1,000 or more per year
If you’re in an accident caused by another driver, his or her insurance company typically pays for your damages. Your own rates usually aren’t affected.

At-fault accidents are another story. If you cause a crash, it will raise your risk profile because your insurance company probably will have to pay for damages, potentially including medical expenses, you caused to others.

But this doesn’t mean your premium will always skyrocket after at-fault accidents. NerdWallet sampled quotes in three states and found that rate increases can range from none at all to a substantial amount.

Here are some examples of what we found:

At-fault accident ($1,000-$1,999 property damage): Rate hikes are hard to predict after minor property damage claims. We found examples of rates going up only $1 a year on average in one state but almost $300 a year in another.
At-fault accident ($2,000+ property damage): The more serious the property damage, the more it will cost you. Expect quotes about $300 to $600 a year higher than a driver with a clean record.
At-fault accident causing injury: Expect rates to go up by about $400 to $800 a year or more, depending on the severity of injuries.
Two at-fault accidents in a year ($2,000+ property damage): Expect to pay $1,000 a year or more above what a driver with a clean record would, and several hundred dollars more than you’d pay after one accident.
Three at-fault accidents in a year ($2,000+ property damage): If you’re deemed a “serial crasher,” rates could be more than double those of a driver with no wrecks, and at least a few hundred dollars a year more than what you’d pay after two accidents.
While insurance increases after an accident are common and can be significant, don’t automatically assume your rates will rise after a single event. If the incident wasn’t your fault or caused minimal property damage, your premium might not change.

When shopping for coverage, consider companies that offer accident forgiveness. This perk, which may cost extra, can prevent your rates from going up after your first at-fault accident, or your first in a while.

How much rates rise after speeding tickets
If you have speeding tickets on your record, you might be considered a risky driver and face insurance increases.

But exactly how much speeding affects your car insurance rates varies by company. In a NerdWallet study, we sampled quotes in two states to see how much rates spiked after speeding 11 to 15 mph over the limit.

After one speeding ticket: Expect at least a slap on the wrist — a rate increase of $100 to $150 a year. Some insurers hike rates by several hundred dollars a year, however.
After two speeding tickets: Most insurers charge slightly more after a second offense, though certain companies actually levy harsher penalties after a first infraction than after a subsequent one.
After three speeding tickets: Expect to pay $200 to $1,000 a year more for insurance than you would pay after two tickets.
In most cases, speeding will influence what you pay for insurance, although companies mete out justice for lead-footed drivers in their own way. Most raise rates incrementally after each successive ticket, but some penalize drivers with steep increases after just one infraction.

Certain companies we studied, such as Geico and State Farm, didn’t seem nearly as bothered by speeding tickets as other providers, at least based on their rate quotes. That’s why it pays to shop around and get several car insurance quotes if you’re in the market for a policy.

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How much a DUI costs
Probably no violation is more damaging to car insurance rates than a DUI conviction. Even if it’s a first offense, insurers assume (and statistics back them up) that drivers have been intoxicated behind the wheel on previous occasions, but just weren’t caught.

In a 2016 study, NerdWallet found that car insurance rates after a DUI typically jump $800 to nearly $2,700 a year. This crime also might be grounds for insurers to drop coverage entirely.

And higher car insurance rates are only one aspect of the true cost of a DUI. Other fees could include:

A citation: Fines range from a few hundred to several thousand dollars, depending on location.
Lawyer and court fees: Legal fees run about $1,000 to $3,000 — more if the case goes to trial.
An ignition interlock fee: A special device may be required to prevent future drunk driving, at a cost of roughly $500 per year.
Treatment programs: In some cases offenders will be ordered into treatment, at a cost of $200 to $500.
All told, a single DUI can cost well over $10,000 and lead to jail time. And the consequences only get more serious for repeat offenses.

Those convicted likely will have to file an SR-22 form with the state to prove they have the required amount of liability insurance. Check out NerdWallet’s guide to understanding the SR-22 for help finding providers who offer this coverage.

How other moving violations could affect your rates
Depending on their severity, other moving violations can also affect your car insurance.

Examples of minor moving violations:

Light speeding (1-10 mph over the limit)
Rolling stop
Illegal use of carpool lane
License restriction violation
Equipment violation
Littering
Taken individually, minor violations might not show up on your insurer’s radar. But racking up too many penalty points on your record won’t look good to insurers when they review your driving history, and it could spell higher rates.

Examples of moderate and severe moving violations:

Failure to yield
Texting while driving
Illegal turning or passing
Hit-and-run
Driving without insurance
Street racing
DUI
Just one of these violations can add serious points to your driving record and lead to insurance increases ranging from mild to extreme. Again, compare as many estimates as possible when shopping; quotes from one provider might be far different than those from another.

How long accidents and violations stay on your record
Car insurance shoppers may wonder how long they’ll face higher quotes due to past driving mistakes. It all depends on the mistake.

Speeding tickets and other mild to moderate violations typically remain on your record for one to three years. In many cases you can intervene and get violations cleared, especially minor ones, before they hit your record. Serious offenses such as DUIs or hit-and-runs, however, can linger for 10 years or more.

When it comes to accidents, most insurers look back three to five years when setting rates.

Alternative car insurance for high-risk drivers
If you have multiple accidents, DUIs or other red flags on your record, it could become difficult to get car insurance on the voluntary market.

Instead, you may need to look for a state-run assigned-risk plan. Check out the industry organization AIPSO for help finding an assigned-risk plan where you live.

Shop around if you have an imperfect record
Remember, you don’t have to stay with your current insurance company if an accident or violation raises your rates. Every provider treats driving mistakes in its own way, and it’s possible that the cheapest company available when you had a squeaky-clean record no longer offers you the best deal. All drivers can benefit from shopping around and comparing as many offers as possible — especially those with blemishes on their record.

NerdWallet is your go-to source for getting the most competitive car insurance quotes. Try our hassle-free comparison tool to view estimates from top companies and possibly save hundreds on your premium.

METHODOLOGY

To test rates after accidents, NerdWallet averaged the four lowest quotes per category for 30-year-old men and women in 10 ZIP codes in California, Connecticut and Texas, and from the largest insurers in each state. Sample drivers carried 100/300/50 liability limits, 100/300 uninsured motorist coverage, 100/300 underinsured motorist coverage (in states where required), collision and comprehensive. A 2012 Toyota Camry was used in all cases.

To test rates after speeding tickets, NerdWallet researched car insurance rates for 30-year-old men and women in eight ZIP codes in Florida and Illinois, with liability limits of 100/300/50, 100/300 uninsured motorist coverage, collision and comprehensive. Coverage includes $50,000 for medical payments in Illinois and $50,000 for personal injury protection in Florida.

To test rates after DUIs, we averaged car insurance quotes in 10 ZIP codes in California, Florida and New York from Allstate, Geico and State Farm for 25-year-old and 50-year-old men and women drivers of a 2010 Honda Accord. In California and New York the liability limits are 25/50/25. In Florida liability limits are 100/300/50. New York quotes include $50,000 of personal injury protection, and Florida quotes include $10,000 of personal injury protection. All quotes include uninsured motorist coverage equal to the bodily injury liability limits, plus collision and comprehensive. These are sample rates generated through Quadrant Information Services. Your own rates will differ.

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