A previous accident can have an impact on your auto insurance premiums, depending on whether or not you’re the responsible party. So, do your insurance rates go up after a no-fault accident? Let’s find out.
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.
Will a No-Fault Accident Increase Your Car Insurance Costs?
Generally, a no-fault accident won’t cause your car insurance rates to rise. This is because the at-fault party’s insurance provider will be responsible for your medical expenses and vehicle repairs. If your insurer doesn’t need to fork out money, your premiums won’t go up.
In almost every state, a non-fault claim is filed against the auto insurance policy of the driver who is at fault. If you aren’t responsible for an accident and you file a claim against the at-fault party, it’s quite unlikely you’ll see an increase in your car insurance costs. Even if you have to file against your own insurance policy, some insurance companies still won’t charge you more because of a non-fault claim.
However, if you previously caused an accident or made a claim, your auto insurance rates may go up after a no-fault collision. According to the Consumer Federation of America, drivers who have been involved in no-fault accidents see an average premium increase of 10 percent.
If your premiums do go up following a no-fault crash, you should know that different insurers increase rates differently. Some may raise your premiums by 10 percent, while others may charge you only 2 percent more. In addition, certain states, such as California and Oklahoma, don’t allow insurance companies to increase rates after a non-fault claim.
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
How Much Does a No-Fault Accident Raise Your Auto Insurance Rates?
In a 2021 survey, The Zebra found that a no-fault accident increased annual auto insurance premiums by an average of $67 in 2020. The following are the average 6-month premiums from some of the leading auto insurance providers for drivers with a no-fault accident in their driving records:
- USAA: $567
- Nationwide: $639
- GEICO: $642
- State Farm: $677
- Progressive: $770
- Farmers: $869
- Allstate: $1013
In What Situations Does Your Insurer Raise Your Premiums After a No-Fault Crash?
If an uninsured driver hits your car, your car insurance company may be liable to pay compensation for the injuries and vehicle damage you sustain through your uninsured motorist coverage. Such coverage is designed to protect you against financial losses in an accident with an at-fault driver who doesn’t have enough or any coverage. Although you aren’t at fault, the accident makes it costlier for your auto insurance provider to do business with you, so they’ll likely pass the extra cost to you by raising your premiums. However, you can always look for another insurer if you’re unhappy.
In the above situation, suppose the at-fault driver fled the scene rather than stopping to exchange information with you. Your auto insurance company may also increase your premiums if you decide to file a non-fault claim. At least, a non-fault claim usually comes with a lower surcharge compared to an at-fault claim.
You may be surprised at the number of factors that can influence your auto insurance costs. Filing an at-fault claim will almost surely raise your premiums, but you may be able to avoid that by taking advantage of your insurer’s accident forgiveness program if they have one. However, a no-fault claim can also be used to increase your rates in some situations, such as a no-fault accident with an insured or hit-and-run motorist.
If your auto insurance provider raises your premiums after you file a no-fault claim, you may want to consider switching to another carrier. The new rates will apply on your policy renewal date, so you may have enough time to shop around. Make sure you ask any prospective insurer if they surcharge for a no-fault accident. It may be better to choose a company that quotes a higher rate but doesn’t surcharge than a more affordable one that raises your premiums after a no-fault accident.
Check this out if you need more information, tips, or resources on auto insurance.
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