How Does an Accident Affect Your Car Insurance in Australia?
In a Nutshell: An at-fault accident can increase your car insurance premium by 20–50% the following year. You'll also lose your no-claim bonus (reducing any discount you had). The impact lasts 3–5 years. A not-at-fault accident typically has a smaller effect — but can still affect your premium depending on the insurer.
At-Fault vs Not-At-Fault — Very Different Outcomes
| Factor | At-Fault Accident | Not-At-Fault Accident |
|---|---|---|
| Premium increase next renewal | 20–50% | 0–10% (some insurers won't increase) |
| No-claim bonus | Reset to zero | Protected (if you have it) |
| Excess payable | Yes ($500–$2,000) | No (claimed from at-fault driver) |
| Years on driving record | 3–5 years | 3–5 years (but impact lower) |
| Must declare to insurers | ✅ Yes (for 5 years typically) | ✅ Yes (for 3–5 years) |
How Much Does a Premium Increase After an Accident?
| Situation | Premium Impact (Increase %) |
|---|---|
| Clean record (no at-fault claims) | Baseline |
| One at-fault claim (minor damage, <$5,000) | +15% to +25% |
| One at-fault claim (major damage, >$10,000) | +25% to +40% |
| Two at-fault claims in 3 years | +40% to +80% |
| Not-at-fault claim (some insurers) | 0% to +10% |
| Not-at-fault claim (other insurers) | +5% to +15% (unavoidable for some) |
💡 Insurer difference: Some insurers have "forgiving" policies — they won't increase your premium after a first at-fault claim (especially longer-term customers). Others will increase regardless.
How Your No-Claim Bonus Is Affected
| Years of NCB | Before Accident | After At-Fault Claim | Loss |
|---|---|---|---|
| 0 years (new policy) | 0% discount | 0% (no change) | None |
| 1 year | 10–15% off | 0% (reset to zero) | 10–15% loss |
| 2 years | 20–30% off | 0% | 20–30% loss |
| 3 years | 30–40% off | 0% | 30–40% loss |
| 5+ years (max) | 50–60% off | 0% | 50–60% loss |
⚠️ Impact on premium: If you had a maximum 60% no-claim bonus on a $1,200 premium, you were paying $480. After the claim, your premium goes back to $1,200 — a $720 increase.
No-Claim Bonus Protection
Some insurers offer No-Claim Bonus Protection as an optional extra:
| Feature | With NCB Protection | Without |
|---|---|---|
| Cost | Typically $30–$80/year extra | Free |
| Protects your discount | ✅ After 1 at-fault claim per year | ❌ |
| Protects after multiple claims | ❌ Usually limited to 1 per year | ❌ |
| Worth it? | Maybe — if you have 5+ years NCB | N/A |
💡 Is it worth it? If you have a maximum 60% no-claim bonus on a $1,200 premium ($480 discounted), NCB Protection costs ~$50/year. It pays for itself after one at-fault claim.
How Long Does an Accident Affect Your Insurance?
| Event | Duration on Record |
|---|---|
| At-fault claim (increased premium) | 3–5 years |
| At-fault claim (NCB reset) | 1–2 years (to rebuild from 0) |
| Not-at-fault claim (some impact) | 1–3 years |
| Speeding fine (demerit points) | 3–5 years |
| DUI / drink-driving | 5–10 years (varies by state) |
What to Do After an Accident to Minimise Impact
| Step | Why It Helps |
|---|---|
| 1 | Exchange details |
| 2 | Take photos |
| 3 | Don't admit fault at the scene |
| 4 | Report to police if required |
| 5 | Contact your insurer ASAP |
| 6 | Consider paying for minor damage yourself |
Minor Damage: Should You Claim or Pay Yourself?
| Repair Cost | At-Fault Claim for $15,000 Car | Better Option |
|---|---|---|
| Under $500 | Likely less than premium increase | ✅ Pay yourself |
| $500–$1,500 | Depends on your excess | ⚠️ Run the numbers |
| Over $1,500 | Claim will offset premium increase | ✅ Claim through insurance |
Example calculation:
- Your excess: $800
- Repair cost: $1,200
- Your premium increase if you claim: +$400/year for 3 years = $1,200 total
- Total cost if you claim: $800 (excess) + $1,200 (increased premiums) = $2,000
- Cost if you pay yourself: $1,200
- Result: Pay yourself — save $800
Key Takeaway
- At-fault accident: premium up 20–50%, no-claim bonus reset to zero.
- Not-at-fault accident: premium up 0–10% (varies by insurer).
- Losing a 60% no-claim bonus means paying more than double for the next year.
- NCB Protection can be worth it for long-term claim-free drivers.
- Minor damage — consider paying yourself if it's less than the premium increase.
- An accident stays on your record for 3–5 years.
- Shop around after an accident — your current insurer will likely be more expensive than a new one.
Last updated: July 2026
Disclaimer: This article provides general information about how accidents affect car insurance premiums in Australia. Individual outcomes vary by insurer, policy terms, and specific circumstances. Always check your PDS.