How a Not-at-Fault Claim Can Raise Your Insurance Costs

What Is a No-Fault Accident?

When it comes to auto insurance, there are two kinds of accidents: at-fault and no-fault accidents. A no-fault accident means you weren’t the party who caused the collision, while an at-fault accident means you’re responsible for the crash. Auto insurance providers have specific fault assessment methods to determine which driver was at fault and which insurance company is responsible for compensation, says Coverage.

Also, each state has its own fault assessment rules. Some states are at-fault states, while others are no-fault states. It’s important to know how your state determines fault in a car accident because it can affect the type of auto insurance you need to carry and the outcome of a claim in the event of an accident. Currently, there are 12 no-fault states, including Florida, Massachusetts, New York, New Jersey, Pennsylvania, Kentucky, Kansas, Michigan, Minnesota, North Dakota, Utah, and Hawaii. The other 38 states are at-fault states.

If you cause an accident, you can expect your auto insurance costs to go up. However, even if you aren’t at fault, you may still face higher rates. According to The Balance, your premiums can increase depending on the circumstances of the accident, the types of coverage you have, and your claims history.

Consider the financials of your deductible and premiums

Your deductible amount can affect your car insurance premium and inform whether you file a claim or not. If you have a low deductible, you may have higher insurance rates. If you have a small $500 deductible, but the damage is less than that, it doesn’t make sense to file a claim. 

One way to save money with car insurance is to opt for a higher deductible which can lower car insurance premiums. You can have your deductible amount as part of your emergency fund and easily pay that in the event of an incident and get the rest covered by your insurance. 

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Who Has the Cheapest Auto Insurance Rates?

USAA, State Farm, and Geico are among the cheapest auto insurance companies. However, rates will vary based on the details of your situation, so you must compare rates from as many companies as possible to learn which is truly the cheapest for you.

Who Determines Fault?

If you went to trial, then a jury would allocate fault between the parties. The jury might find one driver 40% responsible and the other 60%, or they might reach a different percentage. It is up to the jury based on the evidence they hear.

However, in a settlement situation, the parties themselves will agree to fault. Expect insurance adjusters to carefully review the facts of the case including the police report, your statements about what happened, and any witness statements.

Insurance companies often disagree about fault unless the facts are clear cut. Allocating fault often is part of negotiating a settlement.

How does a no-fault claim affect my insurance?

In general, if you are deemed at fault by your insurance company, your insurance premiums will go up, unless you have a product such as Accident Forgiveness. With Accident Forgiveness your car insurance rates won’t go up if you have an at-fault or partially at- fault accident (though it’s not a guarantee your premiums won’t increase at renewal for other reasons). If you are not at fault, although it may differ in each province, in general, your premiums should not go up as a result of your claim.

Will a no-fault accident make my rates go up?

Usually, a no-fault accident will not raise your insurance premium. That’s because the at-fault driver’s insurance company is responsible for compensating you for vehicle damages and medical costs. If your insurance company doesn’t have to give you any money for the claim, your rate won’t go up.

However, if you have a history of at-fault accidents or other claims, it’s possible that your rate could increase following a no-fault crash. According to research from the Consumer Federation of America, drivers in no-fault crashes see a rate hike of 10% on average.

If your rate does go up after a no-fault accident, every insurance company increases rates differently. Some might increase your rate by 10%, and others might increase the rate by 2%. Additionally some states, such as Oklahoma and California, are not legally allowed to raise rates after a no-fault claim. 

How long does an accident stay on your record?

On average, at-fault car accidents stay on your driving record for three to five years. However, the exact length of time depends on your state and the severity of the incident. For example, in New York State, an accident or traffic violation will stay on your record until the end of the year when the incident occurred, plus three years after. In Oregon, an accident or violation will remain on your record for five years.

If you’re involved in a DUI or reckless driving crash, expect the incident to stay on your record for a minimum of five years to a maximum of your entire lifetime.  You can check your state’s Department of Motor Vehicles (DMV) website for information about driving record requirements where you live.

What are the benefits of no-fault insurance?

One of the main benefits of no-fault insurance is the amount of time it takes to resolve a claim. With no more back and forth between insurance companies trying to get to the bottom of who is to blame, it speeds the process up to pay for any automobile or medical bills.

This process not only saves time, but it also saves money. By going directly to your own insurance provider, it avoids the high costs associated with prosecuting an at-fault driver in a court system.

How Does Accident Forgiveness Work?

If your policy includes accident forgiveness and you cause a car accident, your insurer will “forgive” the accident and won’t increase your rates. You’ll typically have to pay extra for accident forgiveness, and some insurance companies such as Geico offer it as a free perk to certain customers.

Related: Should you settle a car accident privately?

Here are some things to know about accident forgiveness:

  • Not all car insurance companies offer accident forgiveness. And some states don’t allow it, such as California.
  • Accident forgiveness is limited. Accident forgiveness usually only applies to one accident per policy, not one accident per driver on the policy. And you might only be able to use it once within a certain timeframe. For example, Farmers Insurance will forgive one at-fault accident for every three years you drive without an accident.
  • The accident stays on your driving record, even if it’s “forgiven”. Even if your car insurance company forgives your accident, it will still be on your motor vehicle record. Other insurance companies can see your driving record, which could affect your rates if you decide to switch insurance companies.

How Much Do Premiums Rise after an Accident?

Insurance rates in California are really a function of three factors:

  • Your driving history (i.e., how many accidents you’ve gotten into)
  • Your driving experience (how many years on the road)
  • Number of miles driven each year

After a crash, your driving history will be shot, so you can expect a substantial increase in premiums. How much? Quite a bit, actually.

A 2016 report from InsuranceQuotes website found that California insurers jacked up premiums more than insurance companies in other states. After one claim for $2,000 worth of damage, the average California driver saw a staggering 78.3% increase in his or her premiums.

So if a driver was paying $100 a month for insurance, that suddenly spiked to over $178 for making just one claim. This was by far the largest increase in the country. Massachusetts, which came in at #2, saw a 66.7% increase. Most states saw around a 40% increase, so California was almost double the national average.

And if the driver filed a second claim? Then insurance premiums increased even more. Nationally, they almost doubled, with a 98% increase.

Fortunately, insurance rates didn’t remain elevated forever. Instead, they impacted insurance rates for 3-5 years, after which a driver’s premiums would slowly drift back down.

How Long Does a Surcharge Affect My Car Insurance Rates?

The length of a surcharge for a car accident depends on your state and insurance company, but will typically last three to five years. For example, states such as New Jersey, New York and Texas only allow insurance companies to surcharge you for accidents for the past three years.

Depending on your state and insurance company, a surcharge could be applied to your insurance policy, but the added cost could decrease each year you drive without an accident (or any other surchargeable events). For example, if you live in a state that looks only at the past three years of your driving record, the surcharge increase may be non-existent after three years of safe driving.

Accidents and auto insurance premiums

When it comes to evaluating your driving record for the purposes of reassessing your insurance rates, practices vary from company to company.

In general, when you make a claim against your insurance policy above a specific amount due to an incident that is primarily your fault, an insurer will increase your premium by a certain percentage. The amounts and percentages and ceilings of these increases vary from company to company and these increases generally stay on your premium for three years following the claim.

Different insurers have different rules about what constitutes an unacceptably bad driving record. If your history gets markedly worse with serious traffic violations or you have several accidents, your insurance company may decide not to renew your policy.

Some types of accidents are worse than others—for example, a drunk driving incident is likely to trigger a nonrenewal from virtually every insurance company.

Which companies offer the best insurance rates after an accident?

After an accident, your insurer will have an impact on how much your rates go up. Different insurers boast different offerings when it comes to how they treat accidents.

Many companies offer some level of “accident forgiveness “, meaning they allow for the first accident to be ignored in terms of raising rates. Usually, accident forgiveness is either an add-on that costs more or a perk offered after multiple years — often five or more — with a clean driving record. For example, State Farm’s accident forgiveness goes into effect after nine years without an accident.

Across five of the largest insurers, State Farm had the smallest rate increase, 24%, after an accident that led to a bodily injury claim. Allstate, Progressive and Geico rates for full-coverage auto insurance went up at least 50% on average.

Company Annual policy cost With accident Increase State Farm$1,623$2,02024%USAA$1,288$1,82442%Allstate$3,585$5,48853%Progressive$2,321$3,56954%Geico$2,017$3,19458%

Insurers also put certain thresholds on what is considered an accident when it comes to raising rates. For example, in order to say an accident occured, State Farm requires a claim to be over $750 between liability and collision coverages. In addition, the driver needs to be at least 50% at fault. Geico is similar, with a $500 threshold in most cases.

Frequently Asked Questions

Car insurance premiums increase an average of 46% after an accident with a bodily injury claim, according to an analysis of national rate data. Accidents with extensive property damage — $2,000 or more — can raise rates even more than that.

In the vast majority of cases, yes. You will likely have to pay more, unless your company offers accident forgiveness and you qualify.

If your claim is just above or below your deductible, it usually makes sense to pay out of pocket to avoid any surcharges or potential increases in rates. Some policies require you to report any accidents to your insurer. How much insurance rates go up after a claim may vary based on your driving record and the severity of the accident.

Insurers most often focus on the past three years of your driving record when setting rates. An accident usually affects rates for at least that long, though some insurers factor in an at-fault accident for up to five years or longer in rare cases.

In most situations, your rate will not go up after an accident in which you are not at fault. However, some companies may raise your rates even if you’re not the at-fault party.

Will a No-Fault Accident Appear on Your Driving Record?

A no-fault accident will show up on your driving record. Suppose a negligent driver rear-ends your vehicle at a stoplight and causes your rear bumper to fall off. In such a situation, you’ll have to contact your car insurance provider and file a claim to obtain compensation for the repair costs. Since you made a claim and received money from your insurer, it’ll appear on your driving record, even though you weren’t responsible for the accident.

Usually, an auto insurance claim will stay on your driving record for 3 to 5 years. Nonetheless, the duration may vary depending on the state where you live and the severity of the collision. Below are examples of how long different types of accidents can remain on your driving record:

  • No-fault accident: 3 years
  • Minor collision: 5 years
  • Hit-and-run accident: 8 years
  • DUI crash: 10 years

Accident Forgiveness Programs

Ram Fletcher, Personal Injury Attorney

Ram Fletcher, Personal Injury Attorney

Many insurers offer drivers with a clean history an accident forgiveness program that allows for at least one accident without a rate increase. There is usually an extra premium charge for these programs, and drivers must qualify for them. When getting a new policy, see if they offer a program and, if so, how to qualify for it.

The Good News About Not-at-Fault Claims

In almost all U.S. states, not-at-fault claims are filed against the at-fault vehicle owner's insurance policy. If you are able to file against the at-fault party, you are less likely to see an increase in your insurance bill.

Even if you do need to file against your own policy, some insurance carriers still will not raise your rate for a not-at-fault claim.

What impacts your car insurance premium

Wondering will my insurance go up if I file a claim is a normal question after an accident. To understand what might happen, it’s key to know what impacts your car insurance premium. 

Your driving track record is really what insurers consider the biggest predictor of your future driving behavior, so the more claims you rack up, the more likely your premium is to rise — especially if you’ve been at fault for accidents in the past. 

If you’re filing a current claim for an accident that wasn’t your fault, your insurer will consider that information, but there are no guarantees regarding your future rate. 

However, if you were at fault, you should know that certain behaviors are generally considered a lot more serious — and therefore more reprehensible — than others.  Reckless or impaired driving, for example, may result in a major price increase (or even a cancellation of coverage, depending on the terms of your policy).

Whether you’re rear-ended in a minor fender bender or involved in a major pileup as the result of your own actions, it’s essential to report the accident to your insurer. This will help provide your carrier with all the information they need to properly investigate the issue and do everything possible to protect you if the other driver involved files their own claim.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2022 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2020 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Incident: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base) and at-fault accident.

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