It’s a well-known fact that your insurance premiums increase after a car accident. The only unknown factor is HOW MUCH the premiums rise. Unfortunately, there’s no “one size fits all” answer to the problem. Every insurance company has its own metrics for determining monthly or yearly premiums, or calculating how much to raise payments after an accident.

Here’s what you need to know:

If damage is less than $1,800, the rate should remain the same. This is the first “forgiveness threshold” for most insurance companies. This is still considered a “minor” collision, and the cost of the repairs is small enough that it won’t justify an increase in your monthly or yearly premiums.

If damage is between $1,800 and $2,800, expect a slight increase. If the damage is between these two amounts, it means that more extensive repairs are needed. The insurance company will raise your premium in order to cover the cost of current repairs. The cost of the repairs is a factor that the insurance company uses to determine your “risk”, so a pricey repair may mean a higher risk rate in the future, hence the higher premiums.

If damage is over $2,800, expect a noticeable increase. The cost of your monthly or yearly insurance premiums will increase if the cost of your vehicle repairs exceeds the $2,800 mark. Note: This is an average, so some insurance companies will have a higher or lower threshold. Just know that the insurance will increase if your repairs cost roughly this amount.

Should I Pay Out of Pocket?

Now comes the question most people ask: “If the cost of repairs are going to increase my insurance premiums, should I just pay for the repairs myself?”

The answer to that question is: it’s up to you.

If you can afford the cost of the repairs, it may be worth paying it out of pocket rather than going through your insurance company. This is especially true if the cost of the repairs is between $1,800 and $2,800. You can keep your insurance premiums low without paying too much for car insurance. If there are no medical bills, property damage, or serious vehicular damage, it may be a good idea to pay for the repairs yourself.

However, if the damage is more extensive, or people or property sustained damage, it’s probably best to pay the deductible amount and let the insurance company absorb the costs. Medical bills and property repair fees can be quite high, and you’ll end up paying A LOT more than you would had you simply accepted the higher insurance premiums.

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