Your insurance premiums are based on perceived risk. The insurance company looks at your driving history, where you live, what you do and other factors, and uses that information to establish a level of risk for insuring you. If you have been involved in an accident, your insurance rates are probably going to go up because the amount of risk you pose for your insurer is higher.
As an example, a person who has not had an auto accident in the past five years is regarded as a low risk driver. Whether or not the person is more vigilant in their driving, they have managed to avoid dangerous incidents, and that means that the person can qualify for lower insurance rates.
Your premiums may not increase right away after an accident. Most insurance companies do not review your driving history until time to renew the policy arrives, and will not know that your risk level has changed until then. The next time your policy is renewed, your rates may go up, unless your insurance company offers accident forgiveness, which means that you are not penalized for a single incident on your record.
Another factor that could affect whether an accident causes your rates to increase is whether you have other incidents already on your driving history that expire before the policy is renewed. If you had been at fault in an accident several years ago, and your insurance company only looks at the past 3 years of your driving history, that old accident may not show up the next time your history is checked, but the new accident would. In this case, your rates probably wouldnâ€™t go down but you may not see a noticeable increase either.
If your premiums have gone up and you feel the new rates are too much, you could compare the prices at different insurance companies online. Online quotes allow you to find out how your rates would be if you bought the same policy from several different companies, and is an excellent way to get the lowest cost insurance for any situation, even after youâ€™ve had an accident.