The Impact Car Accidents Have on Your Insurance

Posted by Jared Pehrson | Oct 01, 2021

Insurance providers pay out millions of dollars every year because of auto accidents, and expenses incurred after car accidents can be substantial. Depending on the injuries sustained, there may be large medical bills, significant property damage, and additional subsequent expenses, depending on the damage sustained. As a result of the significant cost of car accidents, your insurance will likely increase after you've had one. Typically, it's not a matter of if your rates will go up, the question is often “how much will car insurance increase after a car accident?”

In this article, we'll discuss the impact an auto accident may have on your insurance and what you need to know to take care of yourself if you are involved in a collision.   

So, How Much Will Your Insurance Increase Following a Collision?

The answer to this question varies significantly. Some details to consider include the severity of the accident, your portion of liability in the crash, your driving record, and the location where the incident happened. 

What Level of Fault Did You Have in the Accident?

The level of fault you had in the accident influences how much your insurance rates will increase. According to national averages, for your first at-fault accident, your rates may increase 12% - 80%, depending on the severity of the accident. Many insurance companies adhere to guidelines set by the Insurance Services Office (ISO), which permits rate increases of 20% - 40% after accident claim submission. The average national increase is estimated to by about 31% after an at-fault accident with greater than $2,000 in damage. 

According to the carinsurance.com data, if you live in New Mexico and have an at-fault accident, your insurance rates will likely increase by about 24%, based on the average. If you live in Arizona and have an at-fault accident, your rate could increase by about 22%, on average. If you held liability in an accident that caused bodily injury, expect a higher increase in your rates.  

Most of the time, insurance rates will increase following an accident, however, this is not always the case. It depends on your accident, your insurance provider, and your state.

If the accident is your first one and you are not at fault, your insurance provider may not raise your rates. Note that while having one not-at-fault accident may not alter your rates, having multiple not-at-fault accidents may. Additionally, having multiple accidents (even if you are not at fault) may even dissuade your insurance provider from renewing your policy. 

What Types of Accidents Make Insurance Increase?

The chance that your insurance rates will go up depend a lot on the type of accident you have. Some examples of accidents that typically won't make your insurance increase are:

  • Someone hits your car while it is legally parked
  • The cause of the accident was an animal
  • The damage to your vehicle was caused by moving or flying objects, like gravel, rocks, and other objects
  • You were reimbursed by the party who caused the damage to your vehicle
  • A court judgment exists against the party who caused the accident and damage
  • The incident happened as you were responding to an emergency as a paid or volunteer member of a government entity like the fire department or a law enforcement agency

Other types of accidents may also be excluded from rate hikes. To learn more, take a look at your policy.  

Do I Need Uninsured Motorist Insurance? 

Arizona and New Mexico have historically had a consistently large number of drivers without insurance. In New Mexico, specifically, your odds of getting into an accident with an uninsured driver is about 1 in 5. Laws have been enacted to help combat this; for example, in both states, driving without proof of insurance may result in hefty fines and penalties. While neither Arizona nor New Mexico requires you to purchase uninsured motorist insurance, our car accident lawyers highly recommend it. With uninsured motorist coverage, you're protected in a few different scenarios:

  1. You get into an accident with an at-fault driver who has no liability insurance
  2. You have an accident with an at-fault driver who does have liability insurance, but their coverage does not cover the amount of damage caused during the accident
  3. You are involved in a hit-and-run accident, and you don't know who the other driver is

If you are involved in any of the above scenarios, without uninsured coverage, many times, you are on your own in terms of paying for the damage. If you are currently in this situation, call Impact Legal to discuss the specific facts of your case, and we'll advise you on your legal options.

Should I Contact a Car Accident Lawyer After My Accident?

Car accidents can potentially be complex legal matters, depending on the facts of your case. Insurance companies and policies (or lack thereof) heavily impact the experience. If everyone involved has the right amount of insurance, though rates may go up, all parties may be protected. However, if liability is contested, at-fault parties are uninsured, or the insurance company is giving you the runaround, the aftermath of your car accident may be a difficult time. Having a car accident lawyer in New Mexico or Arizona will ensure you have the expertise and skill you need to get the compensation you deserve. Schedule a free initial consultation by calling, texting, or filling out our convenient online contact form. You can reach us at (602) 345-1818

About the Author

Jared Pehrson

Jared is a lifetime boater that has spent countless hours boating all over the left coast. His favorite lake is Lake Powell. Lake Powell reminds him of years past when he starting boating with his late grandfather. 

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