6 Ways to Reduce Your Car Insurance Rates After an Accident

You swerved for a skunk and wrecked your ride; now your car insurance is going to double, right? Not necessarily. With the right insurer — or some clever maneuvering — you can still save money on car insurance after an accident.

6 Ways to Reduce Your Car Insurance Rates After an AccidentIf you’re reading this article, you may have gotten into a car accident recently — or you know someone who did. First, we hope no one was seriously hurt.

Second — and we hate to give you more bad news — there’s a chance that even if you weren’t injured at the scene, you may feel some pain in your pocket the next time your car insurance is up for renewal.

That’s because car insurance companies often raise premiums for drivers who have recently been in an accident. (Your premium is the amount you periodically pay to an insurer for coverage.)

Then again, there’s a chance your premium will stay exactly the same.

“If the accident is not your fault, it’s the first in which you’ve been involved, and your driving history is free of moving violations and/or insurance claims, you may have no premium increase at all,” says Loretta Worters, Vice President of the Insurance Information Institute, a non-profit dedicated to helping the public understand how insurance works.

But if you are to blame, or your insurance company feels that you’ve just been in too many accidents (even if none have been your fault), your premium will likely increase.

Exactly how much more you’ll have to pay varies from company to company and depends on the severity of the accident. “If you are at fault and someone is injured, you will most likely lose your good driver discount and could see a 20 to 25 percent premium increase,” says Worters. “These increases generally stay on your premium for three years.”

But don’t panic. Here’s some advice on how you can put the brakes on any premium increases after you’ve been involved in a car accident:

1. Tell your insurer about the accident, no matter how small it was

If you caused a minor accident in which no one was hurt, or you weren’t at fault, you may be tempted to just not tell your insurance company about it. If they don’t know about it, they can’t increase your premium later, right?

Wrong. “If the other driver sues you weeks or months later, your failure to report the accident immediately might cause your insurer to refuse to the honor the policy,” says Worters. That means you’ll be stuck with all the legal bills and any potential judgments in the plaintiff’s favor. Those bills will likely be far higher than any premium increase.

Even if your insurer does still honor the policy, you will have deprived them of valuable time — time in which they could have investigated the accident and prepared your defense. In other words, by withholding the information, you’ll have decreased their odds of winning your case. If they do end up paying a claim, they’ll likely increase your premium.

2.  Ask if your policy includes an accident forgiveness clause

Statistics show most drivers will get into one car accident every 17.9 years. Because some insurers have accepted that accidents are simply a part of life, they’re willing to ignore your first mishap and not raise your premium.

“The details vary by company,” says Worters. “Some may give you accident forgiveness immediately, while others will only do so after you’ve been an accident-free policyholder for as many as three to five years. They also may require no moving violations for three years.”

3. Take a driving class

You probably thought you saw the last of driver’s ed when you were 16. But if you dust off your old notebooks and take a refresher driving course, your insurance company may see this as a sign that you’re looking to improve your driving skills — and they may show mercy on you come renewal time.

“It won’t help if you were caught driving recklessly or under the influence,” says Worters. “But otherwise, it might help reduce rates. Don’t wait for your insurance company to ask you to do this. Do it on your own and tell them about it.”

You can find a driver’s ed refresher course in your state here.

4. Increase your deductible

If your insurance company does raise your premium, you can still lower the amount by increasing your deductible (the amount you’ll pay after you file a claim and your insurance kicks in).

For example, according to the I.I.I., increasing your deductible from $200 to $500 could reduce your car insurance coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more.

But before you do this, ask yourself if you’ll have the $500-$1,000 to spend if you get into another accident. (This is just another good reason to build up your emergency fund).

5. Take advantage of other discounts

Now may be the time to consider some other ways to save on premiums:

  • Drop collision and/or comprehensive coverages if you have an older car.
  • If you drive less than 10,000 miles per year (the average number of miles insurance companies assume people drive), you could qualify for a discount.
  • Your insurance provider may lower your rate if you’ve been a long-term customer.

6. Shop around for a new policy

If you’re still not happy with your renewal rate, use our resources to shop for a new car insurance policy.

Premiums vary substantially from company to company. If you have home insurance through another provider, include it on your list of potential car insurers. When you “bundle” your home and car insurance with the same company, you’ll get a discount.

Potential insurers will ask you to report any accidents and moving violations you’ve received over the last few years. Don’t lie. They’ll discover all reported accidents or tickets in their databases.

Keep in mind that money shouldn’t be the only factor when making your final decision. “Select an insurance company that has a reputation for good customer service and is financially stable,” says Worters. “Check consumer publications and your state insurance department for customer satisfaction surveys and find out if they are financially stable through rating companies such as A.M. Best.”

Here’s hoping you don’t get into another car accident for at least 17.9 more years!

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Need help lowering your car insurance premiums? Use our resources:

Editor’s note: This article was originally published in August 2013. It has been thoroughly updated for relevance and accuracy.

Published or updated on August 20, 2015

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About Patty Lamberti

Patty Lamberti is a freelance writer and Professional-in-Residence at Loyola University Chicago, where she teaches journalism and oversees the graduate program in digital media storytelling. If she doesn't know something about money, you can trust she'll track down the right people to find out. You can learn more about her at www.pattylamberti.com. And if you have any story ideas, or questions about money etiquette that you'd like her or an expert to answer, email her at moneymannersqs@gmail.com.


  1. Great post – its very difficult to get decent rates after a crash – even when you weren’t at fault.
    On tip I learned by accident – was that by adding an older relative to your policy as a named driver (provided they have a clean licence) you can reduce your insurance costs, as they are seen to be a lower risk than you are.
    Sounds odd and unlikely – but it worked for me, and it costs you nothing to ask your insurer

  2. I’m very thankful for such informative and thorough articles that spell-it-all-out. As a young adult without family in a big city it can be hard to understand what the most basic things mean. While I don’t own a car I still found this helpful for that very reason — because I don’t own a car I wouldn’t know the first thing about such a topic. Thanks!

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