Will an Accident or Ticket Increase My Car Insurance Rate?

When drivers get into an accident, their first thought is often "How much will this cost?" It depends on your insurance company and your state's laws, but part of that cost will likely be an increase in your auto insurance premium - unless the accident was very minor.

How Likely Is a Rate Increase?

The chance of an increase in premium rises along with several factors:

• Accident severity
• Your degree of fault, unless you're in a "no-fault" state
• The value of the insurance claim you or the other driver files
• Type of violation, if you get a ticket at all
• Whether the violation or accident appears on your MVR or CLUE report

How Much Money?

Like everything else about insurance prices, the amount of an increase, if any, varies by company. However, based on a 2008 insurance.com study of the effect a moving violation or accident has on premiums, the price can be high. Drivers who had an additional ticket saw their rates increase from $157 to $248 a year while those who had an additional accident saw increases ranging from $302 to $458 annually.

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When Will It Go Up?

These increases are typically seen at renewal time, but if you didn't notify your insurance company (please do!) and no one made a claim, it could take awhile for the company to find out. Rest assured that they will not be happy to uncover a ticket or accident you failed to report. If you're switching companies, they may not find out until they order your driving or claims history, at which time they may decide not to issue you a policy.

Accident Forgiveness

Some insurance companies offer an accident forgiveness feature. If yours does - and you qualify - your rates may not increase if you're found to be at fault in a relatively minor accident. However, there could be severe consequences if you're involved in a major accident and you're driving under the influence. Remember that there are worse things that can happen than a higher insurance premium, like license suspension and jail time.

MVR = Motor Vehicle Report. Not every traffic ticket actually appears on your MVR. In fact, in some states only 75 percent of all moving violations are ever recorded on an MVR.

CLUE = Comprehensive Loss Underwriting Exchange. C.L.U.E. is a claims history database created by ChoicePoint that allows insurance companies to access your claims information when they underwrite or rate a policy. The report includes claim information such as date of loss, type of loss and amounts paid, and vehicle description.

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Originally posted September 17, 2004.

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