How long does a car accident affect insurance?

One at-fault accident can stay on your record for three to five years. High-risk drivers pay $137.75/mo more on average than those with clean records.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 20, 2021

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Things to Remember...

  • Every auto insurance company out there will have something called a surcharge schedule, which dictates how much your auto insurance will increase when you’ve been involved in an accident
  • It’s important to ask your insurance company how they calculate surcharges and for a schedule, if they have one
  • The general rule is the bigger the accident and the larger the claim, the higher the surcharge
  • Remember, most accident surcharges land from 10% to 40% of your premium, so having multiples will add up quickly
  • Sometimes surcharges will remain applied for up to 5 years
  • For however long the surcharge is applied to your premium, do your best not to get into another accident

Getting into a car accident can be one of life’s most stressful situations. The sad part is sometimes that stress does not stop after the accident is over. If you happen to be at-fault, your insurance premium will probably increase, leaving you stressed and under financial strain.

Understanding your insurance company’s policies on surcharges and accident forgiveness options is one way to alleviate some of the stress that undoubtedly accompanies an auto accident.

Being at-fault in an accident will definitely affect your premium, but you can understand your policy better and become aware of possible increases before it happens. There are a few elements that impact your premium post-accident.

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Every auto insurance company out there will have something called a surcharge schedule. This schedule lays out how the company increases insurance premiums for customers who are involved in moving violations, or incidents like receiving a speeding ticket or being at-fault in an accident.

A surcharge is the specific amount added to your monthly premium. Each company has very different ways they calculate surcharges. In fact, in some states surcharge amounts are already set in stone and must be added to your premium.

Surcharges will also be dictated by the state in which you are living.

For example, the New York Department of Financial Services indicates that characteristics such as age, driving record, and credit history all affect various surcharges for insurance customers.

Check your state’s department of insurance for further details regarding statewide policies for insurance surcharges.

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Surcharges after Accidents

Again, the way an insurance company decides the amount of a surcharge can vary greatly, but there are a few commonalities between each company.

All companies will consider whether the accident was minor or major (this is dictated by how much the accident cost the insurance company to cover) and if the accident was the first one for the customer or one of many accidents.

The cost of the accident is a huge factor in insurance companies deciding surcharge amounts. If the amount of damage is relatively little, say below $1,000, that would create a smaller surcharge amount.

However, if the damages of the accident exceed $1,000, you will be looking at a significant surcharge to your premium.

According to the Massachusetts Department of Transportation difference, an at-fault accident is determined if your insurance company finds you more than 50% at-fault and if the damage is more than $500.

Both of these factors will add a surcharge to your policy. That is just one example of a state’s policy regarding the type of accident and surcharge rates.

How Insurance Companies Calculate Surcharges

Because each company calculates their surcharges differently, you must ask your insurance company for either their surcharge schedule or their insurance point plan. For example, some companies offer a smaller percentage increase to your premium for your first accident.

After your second accident, some companies will increase the surcharge percentage, but it still could be relatively low, say 40 percent. However, other companies hike up your surcharge percentage significantly after your second accident.

It’s important to ask your insurance company how they calculate surcharges and for a schedule if they have one.

Other companies offer an accident forgiveness policy. If you get into your first accident and have to file a claim, the insurance company will not raise your premium rate during renewal.

Sometimes the accident forgiveness policy has specific stipulations, like being a customer and an accident-free driver for a set number of years. Other times, you have to purchase the accident forgiveness policy in addition to your basic premium.

Either way, not every company offers the policy, so be sure to investigate your own insurance company’s accident forgiveness policies.

In addition, state location also will determine surcharge calculations, so keep in mind where you live. The National Association of Insurance Commissioners offers a handy web map that can guide you to your state’s department of insurance page.

Checking on your state’s policies about accident surcharges is a great way to stay informed. Each state is different, and the way surcharges are calculated varies greatly, so doing quality research could save you a giant headache after an accident has taken place.

Point Systems for Accident Surcharges

Most insurance companies use a point-based system to calculate surcharges. These systems usually have specific points depending on the incident. Some companies will even give out points for non-accident related events, like speeding tickets or DUIs issued.

Every company has a different way of calculating points, though, so ask your insurance company first. The more points you accumulate, the higher the surcharge will be to your premium.

If you have gotten into multiple accidents in the last few years, you may find yourself with multiple surcharges to your premium. Surcharges can stack, so being a careful driver can pay dividends when you avoid those costly surcharges.

Remember, most accident surcharges land from 10% to 40% of your premium, so having multiples will add up quickly. In addition, some companies will apply a surcharge even if you were not at-fault. If you filed a claim, chances are you will see some kind of a surcharge to your premium.

Minor versus major accidents also play into point systems for surcharges.

Every company is different in how they calculate what constitutes a minor or major accident. To be sure, contact your insurance company to find out what value draws the line between the two. The general rule is the bigger the accident and the larger the claim, the higher the surcharge.

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Points Systems for Surcharges and the DMV

Many insurance companies will base their point systems on your state’s Department of Motor Vehicles, or DMV, point system for tracking drivers’ licenses. That means any points accumulated against your driver’s license can also impact your insurance company’s point system.

DMV point systems track incidents like speeding tickets, major and minor accidents, and DUIs.

For example, the Virginia Department of Motor Vehicles has three different demerit point classifications: 6-point offenses, 4-point offenses, and 3-point offenses. Each also carries a different length of time the offense is on your driving record.

Some offenses never leave your driving record.

That means if your insurance company determines their surcharges based on the DMV point system, you could be liable for surcharges for as long as they remain on your driving record.

Each state will vary on how they issue demerit points, so check with your local DMV to find out how they do it.

What to Do about a Surcharge

If you have already been issued a surcharge, there are a few things you can do. For starters, do some research on how long the surcharge will be applied to your premium. Sometimes surcharges will remain applied for up to 5 years.

Some companies out there drop surcharges at the 3-year mark. If that is the case, your best bet is to contact your insurance agent when an accident surcharge has reached its limit and find out if it can be dropped.

Being vigilant about what category you are classified in is important too. If you are currently in a high-risk category, but you have accident surcharges on your premium that are three or more years old, you may qualify to be placed in a lower-risk group, lowering your premiums significantly.

High-risk clients typically have to have astronomically higher premiums than standard customers do, so inquiring about your current risk status and eligibility on being moved to a different client group could save you hundreds of dollars.


Other Options

Another option for handling surcharges is to take a safe driver’s course or a defensive driver’s course. Some insurance companies will waive a surcharge fee if you take a specific course.

Not only will taking a driver’s course prevent you an accident surcharge, but it also would remove any points accumulated against your driver’s license.

Not every company offers this kind of service, so check with your agency to make sure before taking the course.

You could also look for a new insurance company if the surcharges prove to be too expensive. Remember, insurance companies cannot change the rates of your policy in the middle of payments, so your surcharges would not appear until the renewal period of your policy.

When your current policy is set to expire, start looking for a new insurance company. If this seems like the best option, remember that any other insurance agency will also calculate surcharges for any existing accident surcharges.

Be honest and open with any potential insurance companies. You may be able to find a cheaper surcharge policy with a new company.

Finally, the last suggestion is the most fundamental. For however long the surcharge is applied to your premium, do your best not to get into another accident.

Most companies remove surcharges after three years, so until that time, practice safe driving techniques, and avoid accidents. Eventually, the charge will be removed.

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Other Things to Consider

Sometimes, insurance companies will not increase rates on a minor accident. If the claim is a relatively low figure, say a few hundred dollars, some companies will ignore the incident, and you will not see any change relative to your premium. If this is the case, consider yourself lucky.

In addition, sometimes you can get into a major accident and nothing will happen to your premium cost. When your insurance company is figuring surcharges, they will want to know if you were at-fault for the accident.

If you are not at fault, and you did not file a claim with the company, you may not see an increase in your premium. It just depends on your individual company’s policies.

Car accidents are a very difficult thing to go through, but understanding surcharges can lessen the shock when your premium goes through the roof. Even better, contacting your insurance company and finding out their policies regarding surcharges and accidents will also alleviate any stresses.

You can never fully prepare for a car accident, but you can know as much as possible about the policy you pay for every month.

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