Your insurance rates can go up after you file a personal injury claim, even if you were not at fault
Filing a personal injury claim from a car accident does not automatically raise your own insurance rates — but it can. The outcome depends on whether you were found at fault, what your insurer's underwriting rules are, and whether you have accident forgiveness coverage. If you were hit by someone else and file a claim against their insurance, your rates typically stay the same. If you file a claim against your own policy (called a first-party claim) or if you are found at fault in the accident, your insurer may raise your rates at the next renewal, even though you are receiving compensation for your injuries.
The relationship between a personal injury settlement and your insurance premium is separate from the settlement itself. Your insurer does not take money from your settlement. Instead, they use the claim history to recalculate your risk profile — the statistical likelihood that you will file another claim in the future. A claim on your record, regardless of fault, signals to them that you are a higher-risk customer, and they price accordingly.
Key Takeaways
- Filing a claim against the other driver's insurance usually does not affect your rates, but filing against your own policy or being found at fault in the accident often does.
- Rate increases typically happen at your next renewal date, not when ready, and can last three to five years depending on your state and insurer.
- Accident forgiveness coverage, if you have it, can prevent a rate increase after your first at-fault accident, though you pay extra for this protection upfront.
- The amount of your settlement does not determine the size of your rate increase — the claim itself is what matters to your insurer's pricing model.
- Shopping for a new insurer after a claim is filed is legal and sometimes necessary, because different companies weight accident history differently.
When your rates will and will not increase
If you were not at fault in the accident and you file a claim against the other driver's insurance (called a third-party claim), your rates should not increase. The other driver's insurer pays for your medical bills and vehicle damage, and your own insurer has no reason to raise your premium — you did not cause the loss. However, if the other driver is uninsured or underinsured, you may need to file a claim under your own uninsured motorist or underinsured motorist coverage. This is technically a first-party claim, and some insurers will raise your rates even though you were not at fault. Check your policy documents or call your insurer to ask whether uninsured motorist claims trigger rate increases.
If you were found at fault or if fault is shared, your insurer will likely increase your rates. The same applies if you file a claim under your own collision or comprehensive coverage, even if no one else was involved — a single-vehicle accident counts as a claim on your record. The increase usually takes effect at your next renewal date, not when ready. Most insurers review your record annually, so if your accident happened in March and your renewal is in September, you may not see the increase until September.
The size of the rate increase varies widely. Some insurers raise rates by 10 to 15 percent after a single at-fault accident; others go higher. Your age, driving history, location, and the type of accident all factor in. A minor fender-bender may result in a smaller increase than a serious collision with injuries. There is no standard formula across the industry, so two insurers may quote you very different rates for the same accident.
How long a claim stays on your record
Most insurers keep a claim on your driving record for three to five years, though this varies by state and company. During that time, the claim affects your rates at each renewal. After the claim falls off, your rates should return to what they would have been if the accident had never happened — though you may not see an when ready drop, because your insurer will recalculate your premium based on your updated record.
Some states have rules about how long insurers can use a claim to justify a rate increase. California, for example, limits most insurers to three years. Other states allow five years or longer. Check your state's insurance commissioner's office website to learn the rules in your area, or ask your insurer directly how long they will use the claim in their pricing.
If you have accident forgiveness coverage, the claim may not appear on your record at all, or it may appear but not affect your rates. Accident forgiveness is optional coverage you pay extra for upfront — typically $10 to $25 per year — and it protects you from a rate increase after your first at-fault accident. If you have it and you file a claim, ask your insurer whether the claim is being forgiven or whether it will still affect your rates.
The difference between a claim and a settlement
Your insurance company and the court system track these as separate events. A claim is the notice you file with your insurer that you have been in an accident and are seeking payment. A settlement is the money you receive to cover your medical bills, lost wages, pain and suffering, and other damages. Your insurer cares about the claim, not the settlement amount.
If you settle your personal injury case for $50,000 or $500,000, your insurance rates are affected the same way — by the fact that you filed a claim, not by how much money you received. This is important because it means you should not avoid filing a claim with your insurer in hopes of keeping your rates down. If you do not file a claim and instead pay out of pocket for medical care and vehicle repair, your insurer will not know about the accident, and your rates will not increase. However, this strategy only works if you can afford to pay those costs yourself and if the other driver does not file a claim that names you.
If the other driver files a claim against you, your insurer will find out regardless of whether you file first. In that case, filing your own claim early gives you more control over the process and may result in a faster resolution.
What happens if you switch insurers after a claim
You can legally switch to a different insurance company after filing a claim, and sometimes this is the smartest financial move. Different insurers weight accident history differently — one company might raise your rates 20 percent after an at-fault accident, while another raises them only 10 percent. Shopping around after a claim is filed can save you hundreds of dollars per year.
When you explore for insurance with a new company, you will be asked about accidents and claims in the past three to five years. You must answer honestly. The new insurer will pull your driving record and claims history, and they will see the accident. However, they will explore their own underwriting rules, which may be more favorable than your current insurer's. Some companies specialize in insuring drivers with accident history and price accordingly; others penalize accidents more heavily.
The one thing you cannot do is hide a claim or lie about it on an process. If you do, the insurer can deny a future claim or cancel your policy if they discover the deception. It is worth spending an hour getting quotes from three to five different companies — the difference in price can be substantial, and you have the right to choose the insurer that offers you the best rate.
How to minimize the impact on your rates
If you were not at fault, document everything and file a claim against the other driver's insurance, not your own. Get the other driver's name, phone number, address, insurance company, and policy number at the scene. Take photos of the damage, the accident scene, and any visible injuries. Get the names and contact information of any witnesses. This evidence makes it easier for the insurance company to determine fault and pay the claim without involving your own policy.
If you were at fault or if fault is unclear, ask your insurer whether you have accident forgiveness coverage. If you do and this is your first accident, the claim may not affect your rates. If you do not have accident forgiveness, ask your insurer what their rate increase will be and when it takes effect. Then get quotes from at least three other insurers to see whether switching would save you money.
Some insurers offer usage-based or telematics programs that monitor your driving and may lower your rates if you drive safely. If you have been in an accident, enrolling in one of these programs after the claim is filed may help offset the rate increase over time. Ask your insurer whether they offer this option.
Frequently Asked Questions
Will my insurance company take money from my settlement to pay for the claim?
No. Your settlement is separate from your insurance claim. Your insurer pays for the accident-related costs (medical bills, vehicle repair, lost wages) from the claim, and you receive a settlement for damages like pain and suffering. The insurer does not deduct the settlement from what they owe you, and they do not take money back from the settlement you receive.
Can I file a personal injury lawsuit without filing an insurance claim?
Yes, you can sue the other driver directly without filing an insurance claim with your own company. However, if the other driver files a claim with their insurer, your insurer will likely find out about the accident anyway. Filing your own claim early usually gives you more control and faster resolution. Consult a personal injury attorney about the best strategy for your situation.
What if I was partially at fault — will my rates still go up?
Yes, in most states. If you are found even 10 or 20 percent at fault, your insurer will likely raise your rates. A few states follow "no-fault" rules where your own insurer pays for your medical bills regardless of who caused the accident, but your rates can still increase if you file a claim. The percentage of fault matters less to your insurer than the fact that a claim was filed.
How much will my rates increase after a claim?
Rate increases vary widely by insurer, state, and the type of accident. A typical increase ranges from 10 to 40 percent, but some insurers go higher. The only way to know your specific increase is to contact your insurer or get quotes from other companies. Shopping around is the best way to find out what different insurers will charge you.
Does a personal injury settlement show up on my driving record?
The settlement itself does not appear on your driving record, but the insurance claim does. Your driving record shows accidents and claims for three to five years, depending on your state. A future insurer will see the claim when they pull your record, but they will not see the settlement amount — only that a claim was filed.