Surcharge

A surcharge is an increase applied to your premium because something on your record suggests a higher chance of future claims, most often an at-fault accident, a moving violation or a DUI. Insurers find these items through your motor vehicle report and claims databases when you apply and at renewal.

Surcharges are usually percentages applied to some or all coverages, and they last a set period, commonly three to five years from the incident or conviction date, depending on the insurer and state rules. A DUI may count for longer. Example: a driver paying $1,600 a year has an at-fault crash that brings a 40% surcharge. The premium rises to about $2,240 for three years, an extra $1,920 in total, before any change in base rates (hypothetical figures). Losing a safe driver discount at the same time makes the jump bigger.

Many states regulate surcharges, for example by allowing them only when the driver was mostly at fault or the claim payment exceeded a set amount, or by requiring insurers to file their surcharge rules. Some insurers offer accident forgiveness to waive the surcharge for a first accident. If a surcharge seems wrong, such as for a crash you did not cause, ask the insurer to review it, and contact your state insurance department if needed. See how long accidents and tickets affect your rates.