Many factors influence the cost of your auto insurance premiums. Insurance companies consider your car’s make and model, your age, gender and marital status, and your driving habits and history. Your premiums will be higher if you have a less-than-impressive record on the road — such as traffic violations and car accidents.
If you have been involved in an accident and are wondering how long car accidents remain on insurance records, you might be relieved to know that it is not permanent. Insurance companies in California continually update their records, leaving off older car accidents from their records.
Different insurance companies use varying formulas to calculate premiums. If you are wondering how long your insurance will be higher after an accident, the rule of thumb is between three to five years, depending on the nature of the accident. This is the average time it takes for insurance companies in California to stop factoring in an accident record when calculating insurance premiums.
How Long Will a Car Accident Stay on a Driving Record?
Insurance companies in California are not required to report accidents to the DMV. However, insurance companies must report accidents in which a person is seriously injured or killed. Accident reports filed with the DMV remain on record for three years.
Note, however, that your insurance company will communicate with the DMV regarding your driving history and violations. For instance, the insurance company will report when your cover lapses, when it does not meet set standards, or if you are convicted of a serious traffic violation. A car accident report will often include:
- Driver personal and car details
- Who is at fault
- The severity of the accident
- Prior driving record, including traffic violations and citations
- Any prior traffic charges
In California, accidents involving more severe violations may stay on record for as long as ten years. Examples include convicted DUIs and accidents in which property damage exceeds $1,000 or someone died, and the driver was at fault.
Will a Car Accident Affect Your Insurance Premium?
The insurance business is essentially a business of calculating and weighing risks. Insurance companies calculate car insurance premiums based on the possibility of the insured clients making a claim.
Therefore, drivers with higher chances of getting into accidents are considered high-risk and will attract higher premiums. The chances of a driver getting into an accident are calculated based on various factors, top among them being recent accident records.
If you have been involved in a car accident recently, your premiums will naturally go up, even if the accident was not your fault. It’s just how the formula works because the insurer had to pay a claim due to the accident. The premium would rise much higher if the accident were your fault.
Luckily, a car accident record will not affect your insurance premium forever. In California, most insurance companies rarely factor in car accidents that occurred more than three years ago when calculating your insurance premium. However, some insurance companies may look as far back as five years, especially when they had to pay out a claim above its ceiling amount.
Getting into a car accident will most likely result in an increase in insurance premiums regardless of the circumstances. In general, more severe accidents such as those resulting from driving under the influence (DUI), multiple accidents within a short period, or reckless driving will result in a steeper rise in insurance premiums. These records are also more likely to stay longer on your record compared to a single minor accident.
How Much Will Your Insurance Rates Increase After a Car Accident?
As a driver, you should know how long do car accidents remain on insurance and how the record will affect your insurance premium. After all, as long as the accident record is factored in when calculating your premium, you will continue to pay higher than you otherwise would. However, of greater concern than the accident record is the nature of the accident, such as who was at fault and how severe the accident was.
Auto insurance is a very competitive industry in California. Insurance companies constantly compete to offer the most competitive deals to drivers regardless of risk. As a result, the rate at which a car accident you are involved in affects your premiums varies with insurers. This is because each company uses its own formula to calculate premiums in a way that covers its risk while keeping the premiums competitive.
For example, if you are involved in an accident, and the only damage is to your vehicle, the cost of comprehensive insurance coverage may rise by about 3% to 5%, according to carinsurance.com. However, if the accident results in severe injuries or property damage exceeding $1,000, your insurance premium may rise by as much as 32%. However, if the accident results in a serious injury or death, or when the property damage exceeds $2,000, your premiums may rise by as much as 110%.
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While a car accident will affect how much you pay for auto insurance, the accident will not be permanent on your record. Even if you have been involved in an accident, the rate at which your premiums increase depends on insurers.
FAQs About Car Accidents and Insurance
Will a car accident in which I am not at fault affect my insurance premiums?
A: Yes. A car accident you are involved in will cause an increase in your insurance premium regardless of whether you are at fault.
Is there anything I can do to keep my insurance premium affordable after a car accident?
A: There are legal steps you can take to keep your insurance premium affordable even after an accident, especially when you were not at fault.