Written by James Hirby | Fact checked by The Law Dictionary staff
The actuarial formulas that modern insurance companies use to calculate their policyholders' rates are notoriously opaque. While it is true that most policyholders' rates increase following an "at-fault" accident, the exact amount of this increase will depend upon over a dozen discrete factors. Many of these are specific to the particular geographic region in which the accident occurred. As such, it is difficult to make accurate generalizations about accident-related auto insurance rate increases.
However, there are a few factors that remain constant in most areas. If you're involved in an accident that could push your insurance premiums higher, you may be able to use these factors to generate a rough estimate of the size of the increase.
The first factor involves the allocation of "fault" among the drivers involved in the accident. If the accident was determined to be the fault of another driver, it's unlikely that your insurance premiums will go up as a result of the incident. Circumstances in which you could be completely free of blame include rear-end collisions caused by another driver's inattentiveness, side or front-end collisions caused by reckless or overly aggressive behavior on the part of another
driver, and accidents caused by an intoxicated driver. To establish fault properly after an accident, call the police and have them make an official determination of the events leading up to the incident.
The scale of the accident-related damage is another important factor. Most insurance companies treat very minor accidents as non-events and don't assign blame or penalize their policyholders for them. Every insurance company maintains its own "damage threshold" under which policyholders may receive this free pass. These damage thresholds may range from $500 to $1,000. If you're determined to be at fault for an accident that causes damage in excess of your insurer's threshold, you can expect your rates to increase after your next policy renewal.
Assuming that you're at fault for the accident in question, the size of the attendant rate increase will depend in part upon the accident's seriousness. Whereas your policy premiums might increase by 25 percent following a relatively minor accident that merely caused damage to the two vehicles involved, they might increase by 50 percent or more following an accident that resulted in bodily injury to drivers, passengers or bystanders. Likewise, an accident that draws charges of reckless driving or driving under the influence may be even more costly.