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Jan 09 2013

How much will a car accident raise your car insurance?

It’s pretty common knowledge that if you’re involved in a car accident, your car insurance premium will go up no matter what.

This seems really stupid to me because this is what you pay insurance companies for, and then when you actually use them, they charge you more. I can just see those insurance reps sitting behind their desk and going “How dare you use your car insurance to cover you in an accident! Let me charge you more because you actually made us work.”

Anyway, I knew in October when I crashed the car that it was going to raise our insurance premiums. But I honestly didn’t expect much—I mean, I’ve been driving for about twelve years now, this is my first accident, nobody else was involved (unless you count my house), and I’m a certified defensive driver.

SO imagine my shock when I received our new premium. We were paying $745 every six months to insure both our cars.

In full disclosure, it cost the insurance company $4,900 to have the car repaired.

Our new insurance bill was $1029 every six months—a 40% increase! I flipped out.

Of course, being a (not-so) Newlywed on a  Budget, you bet your butt I called the insurance company the very next day. Even by lowering my annual mileage because I now ride my bike to work, I could still only lower our premium by $30.

So I had to go on a search for a different insurance company. I think a lot of people are scared about calling their insurance company because they picture it as this extremely tedious task with lots of wait times and too many numbers.

But I have always found that it is extremely easy—of course it is, they want your money!

With the exact same coverage, I was able to get a new insurance premium of $792, a savings of practically $200 over six months, or $400 for the year.

And all because I didn’t stay with the same insurance company.

So the lesson of this story is 1) Don’t crash your car into your house, but if you do, don’t settle for an absurdly high insurance premium.

Has your car insurance ever gone up because of an accident?

11 comments

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  1. KendraD

    We are really lucky that our insurance (through USAA) has accident forgiveness for one accident per year. We found that out after I hit a parked car at the Frankfurt airport. Even though it was totally my fault and they paid everything to fix the other guy’s car, they didn’t raise our premium at all.

  2. Jordann @ My Alternate Life

    I was in one really bad accident two years ago, it wasn’t my fault, but it did affect my insurance for one year. After that year past, they put it back down to the previous levels. I agree with you, insurance ridiculous, but you have to have it!

  3. Army Amy*

    Ugh. Few things in life make me as ragey as insurance. Just thinking about it makes me feel yucky!

    You hit the nail on the head when you said that people don’t like calling the insurance company. I always have to build myself up before dialing the numbers. But! The few times I’ve called, it actually hasn’t been that bad. In fact, when I sold both my cars (on separate occasions) they refunded my insurance from the day of the sale (even though both times I called a few months later – oops!) and were totally nice about it.*

  4. jobo

    That is a HUGE increase!! Glad you called them on it! That is unreal!

  5. Kathleen, Frugal Portland

    I love the list — number 1 is my favorite. But great work on lowering your rate!

  6. eemusings

    Yep, T had a string of 2-3 accidents in about a year, so you can imagine what that did. All really small ones, but quantity counts!

  7. Mrs. Pop @ Planting Our Pennies

    Make sure to tell your life story to the insurance co, as well. They give discounts for everything, it seems. Have a bachelors or masters degree, discount. Own your own home (even if you insure it with someone else), discount. Married, discount. Move to a different zipcode, discount (if your new zip is safer…).

  8. Mary

    I’m sure I will be dealing with this in the near future even though my BROTHER wrecked my car and the insurance company declared it totaled despite the fact that another repairmen said he could do the work for HALF of what they said it would cost. And if/when it does happen, you can bet your ass I’ll be switching companies!

    1. newlywedsonabudget

      oh that sucks big time! I can’t imagine being in that situation…I once crashed a friend’s car, and she didn’t want to go through insurance because of course her premiums would go up. I completely understood, and it was totally my fault so I paid for it. (I don’t remember how much it was, but I was a college student and it HURT at the time). I guess your brother can’t exactly buy you a new car though…oy vey

  9. Courtney

    I got in my first accident almost two weeks ago. I was rear-ended. It looks like I’ll need only $549 worth of repairs – I just need a new bumper cover. I definitely want the other drivers insurance to cover it and even though my car is old, I still want it fixed in case I choose to sell it later this year. My insurance guy has been out on vacation, but I’m definitely hoping I won’t have to see any increase in my premium. I’m getting a steal right now because I bundled my home insurance with my car.

    1. newlywedsonabudget

      Yeah we also got a discount because I am purchasing rental insurance through them. In your case, I would also want their insurance to cover it–it doesn’t matter how old your car is! i don’t know about your premiums though…i would be curious to find out.

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