How Much Does Car Insurance Increase After an Accident in Alabama?

Being in a car accident can be a terrifying experience. Seeing your car insurance rates increase after an accident can be frustrating. In Alabama, the average cost of car insurance is $1,775, but after a recent accident, it spikes to $2,498, a staggering 41% increase. If you were involved in an accident, you are likely not expecting this drastic increase, especially amid other losses you are experiencing, such as medical expenses, car repairs, and lost wages. 

If someone else was responsible for your car accident, you should not have to pay for these losses. You may be able to file a car insurance claim to recover compensation for your medical bills, property damage, lost income, and other losses. An experienced car accident attorney can explain the importance of filing your claim – even if you are afraid your auto insurance rates may go up. Call us for a free consultation to learn more.

How an Auto Accident Affects Car Insurance Rates

Insurance companies are in the business of making money. They receive premiums from policyholders, hoping they will not have to pay out in claims. If they have to pay out a claim, they may raise your monthly premiums. A premium increase will typically remain in effect for three to five years following the accident before they return to amounts closer to what you were paying before the collision. 

How much insurance rates increase after an accident depends on many factors, including the amount of the claim you made or someone made against you. Typically, the more extensive the damages and the claim’s value, the higher your increased premiums may be. Also, if you file multiple claims, your insurance costs may increase further. To know how much your rates may increase, review your insurance policy terms or speak to a representative from your insurance company. 

Will My Car Insurance Rates Go Up If I Am Not at Fault for the Accident? 

Typically, auto insurance rates do not go up if you are not at fault for the accident. The other driver’s insurance rates may go up when you file a claim against them. 

However, certain situations may increase your insurance premium costs after an accident, even when that accident was not your fault. For example, your insurance provider may increase your rates if you have had a lot of accidents. Insurance companies operate off of statistics, so multiple accidents involving you may indicate you are a high-risk driver who is more likely to be involved in a car crash in the future. 

Factors Influencing Rate Increases After an Accident 

Insurers consider many factors when assessing whether to increase rates after an auto accident and how much, including:

Fault 

If you were injured because of another driver’s negligence, your auto insurance rates should not increase. 

The Severity of the Crash 

Your insurer will likely consider the severity of the crash. If the accident resulted in extensive property damage or serious injuries, it is more likely that the increase in insurance premiums will be significant. Minor accidents may not result in as substantial of increases as severe accidents.

Driving History 

When raising your rates, the insurance company can consider your driving history, including any accidents and traffic violations. The insurance company can also consider the cause of the accident and whether that involved a traffic or legal violation, such as speeding or drinking while driving. 

Other Factors

Insurance companies consider other factors when determining how much to charge someone for insurance, such as:

• Age – Young drivers must usually pay a higher insurance premium than older ones.
• Gender – Males are typically charged higher insurance rates.
• Vehicle type – The vehicle’s type and value can also impact insurance rates.
• Type of coverage – Policyholders can opt for comprehensive coverage and various add-ons besides minimum liability coverage. 
• Credit score – A person’s credit history can also impact insurance rates.

Can I Prevent My Car Insurance Rates from Going Up If I’m in an Accident?

Most Americans are overpaying for car insurance. Various programs or strategies may be available to help you reduce your insurance costs so that a recent accident does not cause staggering insurance rate increases. Some options may include:

• Using discounts – Insurance companies may offer student or military discounts or slightly lower rates for those who pay premiums in full or use autopay.
• Bundling insurance – If you have multiple things to ensure, such as your home or rental unit, another vehicle, and the covered vehicle, you may be able to receive a multi-policy discount.
• Raising your deductible – Raising your deductible could help lower your premium.
• Lowering your coverage – You could potentially eliminate unnecessary insurance for which you are not receiving a benefit. 
• Using an app – Many insurance companies currently have apps and devices that policyholders install in their vehicles to monitor their driving behaviors, speed, and acceleration. Safe drivers may be able to receive discounted rates.

What Is Accident Forgiveness?

Accident forgiveness is a popular insurance program that helps drivers avoid increases to their auto insurance premiums after getting in a recent accident where they are found at fault or that would otherwise typically result in a rate hike. This program is not part of all policies. Even if you have an auto insurance policy with a company that offers the program, the specific details of your policy will outline whether you have this coverage.

Different auto insurance companies operate their accident forgiveness programs in different ways. For example, some providers allow certain policyholders to obtain this coverage after being customers for a certain amount of time, while others offer the program as an add-on. 

Does My Car Insurance Company Offer Accident Forgiveness?

You can learn whether your auto insurance policy includes accident forgiveness by carefully reviewing your policy, including the declarations page and coverage sections. 

Each insurance company has its own features and requirements for accident forgiveness. Here are some of the most popular auto insurance companies and details on their accident forgiveness policies:

State Farm 

State Farm does not offer accident forgiveness. 

Allstate

Allstate’s accident forgiveness coverage prevents your car insurance premium from going up after an accident, even if the accident is found to be your fault. The protection begins the day you sign up. 

Nationwide 

Nationwide offers accident forgiveness, which means the insurance company does not apply a surcharge to a policyholder’s premium if they file a property damage or collision claim resulting in a payout under the accident threshold, even if they are at fault.

Progressive 

Progressive offers three accident forgiveness programs:

• Small Accident Forgiveness – Small Accident Forgiveness maintains the same insurance rates after the first claim of $500 or less. This is typically an automatic benefit offered to new customers in most states.  
• Large Accident Forgiveness – Large Accident Forgiveness is a feature provided to customers who have been with Progressive for at least five years with no accidents or violations. Rates won’t increase after the first claim, even if the claim is more than $500. 
• Progressive Accident Forgiveness – Progressive customers can purchase optional accident forgiveness benefits when they buy or renew their auto insurance policy with Progressive. The feature allows for one eligible accident to be forgiven per each policy period. 

GEICO

Customers can earn GEICO accident forgiveness by maintaining a clean driving record or purchasing auto insurance policy coverage.

Farmers

Farmers forgives one at-fault accident every three years the policyholder goes without an accident. Customers must purchase this add-on.

USAA

USAA offers accident forgiveness coverage for free after five years if household drivers have been free of accidents that were their fault.

Liberty Mutual

Drivers must have had no accidents within the last five years to receive Liberty Mutual’s additional accident forgiveness coverage.

Alfa

Alfa Insurance offers a program called “Accident Waiver” that functions similarly to accident forgiveness. To be eligible for Accident Waiver, you must be a resident of Alabama or Mississippi, have a good driving record over the last three years, and have had no accidents within the last three years. The program prevents a rate increase after your first at-fault accident. 

American Family

Accident forgiveness with American Family protects your premium after your first at-fault accident. You can earn or purchase this coverage. To earn it, you must have no claims for five years and no major violations on your driving record. You can purchase the coverage if your household drivers have not had any at-fault accidents or driving violations within the last year and no more than one at-fault accident within the last three years.

Auto-Owners

Auto-Owners offers policyholders the option to purchase accident forgiveness, which means the company waives the accident surcharge for the first at-fault accident after the policyholder purchases the benefit. To qualify, policyholders must have no paid-out claims or major violations for the 36 months leading up to the purchase of the benefit.

Even when insurance companies offer accident forgiveness, they do not necessarily offer it in all states. Individual policies may be different. Check your policy details on your online or mobile account or contact your insurance agent to determine if you currently have accident forgiveness benefits. 

Rates After Multiple Accidents

If a driver is involved in multiple accidents, insurance premiums may increase even more and last longer. Additionally, depending on the policy’s terms, accident forgiveness may not apply.

How to Shop for Accident-Friendly Auto Insurance Policies 

If you were recently involved in an accident where you were found at fault, you may want to shop for accident-friendly auto insurance policies. Some insurance companies specialize in providing insurance to customers who have had more accidents or driving violations. Look for these. Compare quotes from at least three providers when shopping for car insurance.

Contact an Experienced Personal Injury Lawyer for Help with Your Car Accident Claim

Even if you are found at fault for an accident, it is typically in your best interest to file a claim because the damages stemming from a car accident can be extensive and far outweigh your increased premiums. 

If you were injured in a car accident that was not your fault, you have the right to seek compensation from the at-fault party for payment of your medical expenses, lost income, car repairs, and pain and suffering. Contact a car accident lawyer with Siniard Law to discuss your case during a free consultation.