What is a surcharge on a car insurance policy?

For insurees who end up in unfavorable situations, such as speeding violations or car accidents, the odds of a car insurance surcharge are quite common. Generally speaking, the insurance companies' rely on these surcharge payments to cover the extra costs of handling your claim. However, most insurance providers will review your complete driving record in addition to previous claims before deciding whether an additional charge is necessary. The most common reasons for a surcharge payments include:

How long does a surcharge stay on your insurance?

The amount as well as the length of your surcharge is contingent on a few different factors. If your insurer has an automated system, the charge may be applied to your monthly premium without notice. In some cases, your insurer may have the option to choose, which means they hold the authority on whether or not you receive a temporary increase in your premium. On average, you can expect a car insurance surcharge to last at least three years. This is the typical amount of time it takes to recover the added costs it takes to back your car accident claim. In more extreme circumstances, insurees may have to pay the extra cost for fives years. While the surcharge does impact your financial obligations to the insurance company each month, it is important to note it's only temporary. Once the established payment period is over, insurees can expect their car insurance premium to return back to normal.

Why am I paying a surcharge?

Unfortunately, regardless of the circumstance, there is no getting around paying your car insurance surcharge. If you believe the added expense is wrongfully imposed, you can talk with your insurance provider and try to dispute the charge. Keep in mind, some states mandate the surcharge fee once the insurance company has deemed you a "high risk" driver.

Ways to avoid a car insurance surcharge

With car insurance rates expected to increase by 8.4% in 2023, it's best to avoid a car insurance surcharge at all costs. Although some circumstances are completely accidentally and quite frankly unpreventable, there are simple ways to reduce the likelihood of a surcharge in your future:

Though you may try your best to avoid spikes to your car insurance premium each year, certain driving behaviors can land you in a liable spot. If you find a surcharge on your next payment, remember it must be paid in full and for the designated time that your car insurance company decides. Want to learn more about your auto insurance options? Read our previous Headlights post on Money-Saving Car Insurance Hacks to Lower Your Premium.

Michaella Malone

Michaella Malone is a content specialist and full-time freelancer with 5+ years of experience working with small businesses on online platforms. She is a graduate of Florida State University (Go Noles!) and avid traveller, having visited over 25 countries and counting. In addition to blogging, ghostwriting, and social media content, she has contributed to the development of English as a Second Language (ESL) curriculums for international programs.