Michigan and Maryland are the worst states to file auto insurance claims, with longer settlement times and expensive payouts. Texas and New York have the worst car insurance after claims due to a higher rate of accidents (Learn More: How to File a Claim and Win it Each Time).

Erie, USAA, and State Farm are the cheapest auto insurance companies after claims, starting at $48 monthly. They offer accident forgiveness, which waives surcharges after your first at-fault crash, and gap coverage to pay off the remaining loan on a totaled car.

Read on to learn how claims affect auto insurance premiums. Enter your ZIP code to compare free quotes if your rates have recently increased after a claim.

Top 10 Worst States For Auto Insurance Claims

What is the worst state for car insurance? Michigan, Maryland, New Jersey, Delaware, and New York are the top five states with the highest rates of car accidents. Claims are more expensive in these states, despite there being fewer claims filed each year compared to other states.

10 Worst States for Filing Auto Insurance Claims

Using car accident statistics presented by the Insurance Information Institute (III) and the National Association of Insurance Commissioners (NAIC), a U.S. organization that sets and regulates the insurance industry’s standards, we found that the average vehicle insurance claim costs $5,215, an increase of $600 over last year (Read More: What does the Insurance Institute for Highway Safety do?).

Different types of claims — liability, collision, and comprehensive — impact insurance premiums differently. The worst states for insurance experienced the highest coverage price fluctuation when filing a claim that cost between $2,000 and $6,000.

Worst States For Liability Auto Insurance Claims

Texas and Michigan are the worst states for liability auto insurance claims, and New Jersey is one of the worst states for driving and liability claims, largely due to its denser population and higher minimum no-fault insurance requirements. Once you report an incident in these states, your rate goes up drastically.

5 Worst States to File Bodily Injury Liability Claims

Among all the categories, bodily injury is the most expensive. A single bodily injury liability claim can increase your rates by nearly 11%. According to the NAIC, bodily injury incurred losses increased by 21%, surpassing $83 billion. It is significantly higher than other categories, including property damage and comprehensive claims.

It tends to be the most costly because liability auto insurance covers medical treatment costs for multiple parties, including your passengers, pedestrians, and other drivers, as well as lawsuits and property damage. Therefore, almost every state requires drivers to purchase a set minimum amount of bodily injury coverage. And as a result, your costs can rise steeply after bodily injury cases.

Worst States For Comprehensive Insurance Claims

Of the three types of car insurance claims, comprehensive claims tend to be the least costly and have the lowest impact on insurance rates. However, you will see your rates go up if you live in a state with increased weather or theft risks, like Texas or Washington, which are the worst states to report a comprehensive auto insurance claim.

5 Worst States to File Comprehensive Auto Insurance Claims

Comprehensive auto insurance only covers incidents outside of a driver’s control, such as hitting an animal or a falling tree. Since these collisions aren’t caused by driver error, there is no increase in high-risk behavior that would lead to higher premiums. Most states only show a rate increase of less than 2% at renewal. In eight states, there is no change.

The Best States for Auto Insurance Claims

When comparing the best and worst states for driving, places like South Dakota, Wyoming, and Iowa are among the best states for filing auto insurance claims since they have smaller population sizes and fewer traffic-related collisions.

5 Best States to File Auto Insurance Claims

Insurers in the best states for claims charge hundreds less for car insurance, even though millions of claims are filed per year, because repairs also cost less than on the East Coast. These states are also more likely to have insurance claims related to weather and animal collisions rather than high-priced liability claims.

Enter your zip code below to view companies that have cheap insurance rates.

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How Claims Impact Auto Insurance Rates

One claim can result in an average annual premium increase of 44%. Filing a second claim within the same year could hike up the fee by 99%. But as you can see, each major insurer treats claims differently.

Auto Insurance Monthly Rates Before and After Filing a Claim

Erie and USAA remain the most affordable auto insurance companies after a claim, but availability is limited.

State Farm, Geico, Travelers, and Progressive are the cheapest providers after a claim. However, the cheapest quotes often come from the worst-rated car insurance companies.

Progressive and Geico might have low rates, but they rank among the worst car insurance companies for claims handling (Learn More: State Farm vs. Farmers, Geico, Progressive, & Allstate Insurance). So, always compare multiple quotes and review customer feedback after a claim.

If you live in the worst state for car insurance, you want to work with an insurer that can handle claims quickly and compassionately. If you’re having issues with payouts from your provider, call your state auto insurance claims phone number to speak with someone from your local Department of Insurance.

Auto Insurance Claims & Driving Record

Drivers with bad records have the worst auto insurance rates. Filing a claim after a speeding ticket or DUI will only make coverage more expensive, but Erie, State Farm, and USAA have the cheapest auto insurance for high-risk drivers.

Auto Insurance Monthly Rates by Driving Record

Although the price surge typically kicks in only when you are at fault in a pile-up, that’s not always the case. Your policy price depends heavily on your driving record, whether you were at fault for the crash, the extent of damage to your vehicle, and the number of people injured. Reporting multiple claims in one year will increase rates even more.

As an example, if your current plan is $99 per month (or $1,189 annually), and you submit an accident claim of $5,000 or more, you can expect your rate to go up to $1,709 next year (a $43 monthly increase on your rates). If you report another incident in the same year, your plan may cost $2,366 (a $197 increase per month).

The most important thing is not to lie about your driving record and collision history. All this information is recorded, and they will eventually find out. If your insurer discovers that you’ve lied while processing a new claim, they have the right to deny your request and terminate your policy without providing any compensation or refund.

Why Auto Insurance Claims Affect Each State Differently

What your insurance company doesn’t tell you about claims is that each provider has its own set of regulations and guidelines to determine price increases for policyholders. Some may not change your rates if this is your first accident or if you have an otherwise great driving history. Others waive rate increases if you’re not at-fault, but this doesn’t apply in no-fault states like Michigan, where minimum coverage is the highest at $163 a month.

Local weather risks, theft rates, and average commute times are big indicators of claim risks and a major reason why insurance rates vary across the country. Along with weather and traffic, high minimum requirements and a high number of uninsured drivers make Michigan the worst state to drive in and file a claim.

State Minimum Car Insurance Requirements

Each state’s regulations concerning auto insurance will also dictate your monthly cost. In states that are allowed to use any information to determine high-risk factors, such as marital status and credit score, claim trends tend to have a much lesser impact. However, certain states have regulations banning insurers from using certain factors to determine a driver’s high-risk status.

In these places, insurance companies can only use five factors to calculate risk: age, ZIP code, driving history, annual mileage, and vehicle make and model, which means local claim trends drive up rates more in these states. Explore car insurance discounts you can’t miss if you’re having a hard time finding affordable insurance after a claim.

Vehicles Involved in Auto Insurance Claims

No matter where you live, what you drive has a big impact on what you pay for car insurance. Certain vehicles are more likely to get into collisions, and insurance companies pay close attention to local motor vehicle accident trends when setting car insurance rates by state.

For instance, driving a light truck like a Ford F-150 in Texas could result in higher rates compared to other states, as Texas is more likely to see liability and comprehensive claims. Compare the best auto insurance for Fords to find the right coverage for your model.

Accident Causes and Insurance Claims

Claims for incidents involving other vehicles and drivers, especially if caused by distracted driving or speeding, will have very expensive consequences. Distracted driving is a leading cause of auto accidents in most states, with phone usage causing several thousand crashes and claims per year.

What caused the collision will impact your auto insurance after a claim. Texas, Michigan, and Maryland have the worst bodily injury claims for accidents caused by:

• Speeding: Higher speeds increase the severity of the collision damage and the risk of serious injuries and fatalities
• Distracted Driving: This includes texting, eating, adjusting the radio, or anything that takes your attention off the road.
• Impaired Driving: Alcohol, drugs, and certain medications slow reaction times and are a major contributor to fatal crashes in all 50 states.

Comprehensive claims for collisions with animals or damage from fallen trees will cost much less for insurance companies, unless you live in places like Texas or Michigan, where weather risks like flooding and hail increase claim costs.

Learn More: How Self-Driving Cars Work

Incurred Losses for Auto Insurance Claims

Every year, your auto insurance policy rate will increase slightly simply due to inflation and the state of the economy. What does this have to do with your cost? In order to recover incurred losses, insurance providers raise rates to ensure there are sufficient funds and services to cover your vehicle repairs, legal fees, and medical-related expenses.

Consequently, the average insurance coverage rate across America has increased by almost 11% due to inflation. Consider how these things hinge on the economy:

• Labor Costs: The manual labor cost of repairing your car increases drastically every year, and repairs for electric or hybrid vehicles are even more expensive.
• Vehicle Costs: The newer your car, the more it costs to repair. This is why newer car policies tend to be more expensive than ones for older vehicles.
• Cost of Living: The cost of living gradually increases year over year, so if you are injured and require compensation for salary loss during the time you cannot work, the compensation must also scale up.

It is essential to note that premium surcharges vary depending on the type of claim submitted. Usually, if someone hits your vehicle, their insurance should cover both their own and your injury and loss. In reality, not all companies comply with this guideline, and the number of insured vehicles increased by only around 8%, resulting in a significant number of underinsured drivers on the road.

Insurers know that if you report a collision, whether you are at fault or not, you are statistically more likely to submit another incident in the future. As a result, you can even see your coverage rate go up after filing an incident for which you are not at fault. Compare auto insurance plans to secure the right coverage to avoid rate hikes.

How to File a Claim in the Worst States for Auto Accidents

To make sure your car insurance claim gets approved and not denied, you need to know what insurers look at and how to safeguard your interests during the process. Here are important steps you should follow to strengthen your claim:

• File Within Required Deadline: States typically give 30-90 days to file a claim. Missing the deadline can result in your claim being denied, so act promptly and check your policy for specific timeframes.
• Fill Out All Forms: Provide accurate information, check signatures, and submit strong evidence on every required claim form to avoid delays or denials.
• Collect Strong Evidence: Gather photos, videos, police reports, medical records, or witness statements to support your claim and prove the extent of your loss.
• Document All Communication: Keep receipts of all interactions with your insurance company and the adjuster, including emails, phone calls, and letters, in case of disputes.
• Understand State Claim Laws: Determine the at-fault or no-fault laws in your state to ensure you have the right coverage and legal rights to a claim.

Understanding common mistakes and preparing your case thoroughly can significantly increase the chances of receiving the claim payment you deserve.

By following these steps carefully, you can strengthen your position during the claims process and ensure that you receive a fair payment for your loss. Follow these tips on how to buy auto insurance with proper coverage to minimize the risk of claim denial.

When to File an Auto Insurance Claim

If you live in one of the worst states for filing car insurance claims, the first thing you should know is that filing is not a necessity in certain situations. Understanding the difference between when to submit a claim and when you should pay out of pocket will help you avoid an unnecessary premium increase. You should always file when:

• You are part of a major accident involving multiple cars.
• Someone is injured or there is serious property damage.
• Your car is stolen or damaged by rare events, such as wildfire, animal collision, or natural disasters.
• You’re found at fault or fault is unclear, and you need your insurer’s help to resolve the dispute.
• The other driver is uninsured, and repair costs exceed your deductible amount.

If the damage has totaled your vehicle, caused mechanical problems, or affected how the vehicle runs, and you can’t afford to pay out of pocket immediately, then filing a claim is likely your best bet.

If the cost is less than your deductible, or you don’t have collision auto insurance, there is simply no point in submitting your case, as you have to pay out of your own pocket for the repair anyway. In situations where you’re unsure about whether to file, visit a repair shop and obtain a quick estimate for the repair.

If the repair cost is less than the estimated price hike of your insurance plan, especially if you were not at fault for the collision or were the only party involved in a fender-bender (i.e., backing into a wall or a pole), you may not want to submit a claim for the sake of keeping your record clean.

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How to Lower Rates After an Auto Insurance Claim

What can you do if you’re living in one of the worst states to file? The good news is that the premium increase is not permanent. After the first year of the raise, your rate will gradually drop each year that passes without incident. Within 3-5 years, your insurance policy cost should return to the pre-accident rate. Follow these tips to pay less for car insurance in the meantime.

Avoid Further Traffic Violations

Getting another traffic violation on your record after a claim (i.e., texting while driving, running a red light, or speeding) can drastically change your annual policy. You can expect your premium cost to go up by $100 to $150 per year after the first violation. The second ticket will likely increase your rate by several hundred dollars. The third can increase your rate by $1,000 per year.

Depending on the company, they may decide to drop you as a customer altogether or demand a hefty deposit for high-risk car insurance before allowing you to keep your policy. Some accident forgiveness programs will also overlook your first ticket. Our definitive guide to usage-based auto insurance explains how driving habits can help prevent future rate hikes.

Increase Your Deductibles

Increasing your deductible after filing a claim is one of the fastest ways to lower your auto insurance premiums. A higher deductible means you agree to pay more out of pocket if you file another claim, which lowers the insurer’s risk.

Keep in mind that while it lowers monthly costs, the trade-off could be expensive if you need to file again soon. This strategy only makes sense if you can comfortably afford the higher deductible in case of another claim.

Read More: What to Do if You Can’t Afford Auto Insurance

Qualify for Accident Forgiveness

How does accident forgiveness work? Typically, if you have a driving record with no collision history, insurance companies will allow you to enroll in their forgiveness program. The best auto insurance for good drivers can help you avoid claim denials with better policy options and lower risks. But each company has slightly different regulations.

Some companies offer forgiveness as soon as your policy starts, but limit it to one accident per year or one driver per policy. Others require you to stay collision-free for a few years first. Only a few, like Progressive, offer free minor accident forgiveness to safe drivers right away. Most, including Liberty Mutual and Allstate, offer it as an add-on to a premium plan.

By paying slightly more for your policy (about 8% to 15% more than the same policy without the option), your provider will overlook your first mishap and allow your premiums to stay the same without any penalty. However, review all the details and fine print before subscribing to the program. Be sure that you understand what services are included and how to take the most advantage of your policy.

Take a Defensive Driving Class

If you see that your rate has jumped significantly, you’re able to soften the hit by offering to take a driving class to brush up on your driving skills. After completing the course, your insurer will offer you a 10-15% defensive driving discount for taking the initiative to be a safe driver. You can also see if you qualify for other discounts that will lower your premium.

Ask About Discounts

Along with defensive driving course discounts, many providers offer savings that are unrelated to your driving record and claims history, including anti-theft device and new car discounts if you drive a more recent model.

One of the easiest discounts to qualify for is a multi-policy discount for drivers who bundle auto policies with homeowners or renters insurance. Compare the cheapest home insurance companies to find the provider with the best multi-policy discounts.

Shop Around and Compare Companies

If all else fails and you still don’t like the price, you can always switch to another provider. Different providers treat prior cases differently. If they see that you have been a responsible driver for a long time before any incident, they may overlook it and still offer you a great price just to make you one of their customers.

Drivers in some states can avoid a rate hike if the claim is only for a small amount of destruction and requires very little repair. If you have been a long-term customer, you may want to contact customer service and attempt to negotiate a lower rate. As a last resort, threatening to take your business elsewhere may prompt them to offer a lower rate just to keep you as a customer.

Learn More: How to Get Multiple Auto Insurance Quotes

The Best And Worst States For Auto Insurance Claims

What state has the worst car insurance? Michigan, Maryland, and New Jersey are the worst states for auto insurance claims. These three states are also among the most expensive for car insurance. Michigan has the highest rates at $163 per month, primarily due to its high claims rate and a large number of uninsured drivers.

Iowa, despite being the state with the highest number of car accidents and over seven million claims per year, has one of the lowest minimum monthly rates at $30. South Dakota and Wyoming are also the best states for filing claims due to their small populations and low traffic density.

Erie, USAA, and State Farm have the cheapest auto insurance after a claim in most states, with minimum coverage starting at $48 after one claim.

Unfortunately, not all companies are the same. If your insurer raises rates, even if you are not at fault for the collision, don’t worry just yet. These companies often offer accident forgiveness programs, where they will overlook the first incident as long as you have elected the option.

Knowing what happens if you cancel auto insurance protects you from claim disputes and higher premiums, but your state laws and claim trends ultimately determine how much you’ll pay for coverage. See how your state ranks among the worst states for filing auto insurance claims by entering your ZIP code into our free quote comparison tool.

Methodology

To create a point of reference, this study was conducted based on a hypothetical married female driver, 45 years old, who is employed full-time, has an excellent credit history, and has no history of claims or prior lapses in coverage. For each state, the study examined how liability, comprehensive, and collision claims affect coverage rates.