For How Long Will an Auto Accident Affect an Insurance Premium?

A car accident is never a good sign for auto insurance rates. When you get into an accident, your risk level in the eyes of the insurance company increases. Because you've been in an accident, your insurer assumes you have a better than average chance of getting into a subsequent wreck (thereby costing them money). But for how long does a car accident affect your auto insurance rates?

Car Accident Time Span

The answer is that it varies. Depending on where you live and which insurance company you've purchased a policy from, a car accident can increase your auto insurance rates for up to five years, and usually a minimum of three.

This means that, in most cases, car accidents can only impact your auto insurance rates for about five years, after which they are no longer an issue.

Non-Chargeable Accidents

According to OnlineAutoInsurance, a car accident might not affect your insurance rates at all if it resulted in less than $750 worth of damage or if the accident involved some sort of emergency vehicle, such as a police car or ambulance. This, too, varies from one insurance company to another.

If an accident does not affect your car insurance rates, this is considered a non-chargeable accident. All insurance companies have specific guidelines that determine whether wrecks are chargeable, so the only way to determine how you will be affected is to ask your agent.

When you request a car insurance quote, according to CarInsurance.com, that company requests myriad information from the Division of Insurance in your state. Included is the number and type of accidents in which you've been involved. This request is limited to a certain time frame, from three to five years.

Contributing Factors

If you had an auto accident six years ago, for example, it probably won't influence your auto insurance rates anymore. However, if you were cited for a serious offense as a result of that accident, such as a DUI, a car accident can increase your auto insurance rates indirectly for a much longer period of time.

In fact, some accidents involving drugs or alcohol will result in a suspended driver's license. If this happens, it will be more difficult to obtain car insurance coverage, and you will have to pay much more when you request it through the state program.

At-Fault and No-Fault Accidents

As far as the insurance company is concerned, fault plays little role in whether a customer's rates are affected by a car accident. Your rates increase when you live in an area where accidents are common, for example, because the insurer considers factors beyond the driver's control.

This is why many drivers fail to report minor accidents to the insurance company, even when it was the fault of another driver. Be careful with this type of avoidance, however, because if you fail to notify your insurance company, you will have trouble suing the other driver or taking advantage of any other legal action.