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How Do Insurance Claims Affect Car Insurance Rates?

  • admin
  • October 15, 2015 2:55 PM
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How-Claims-Affect-Car-Insurance-Rates

What Does Filing an Insurance Claim Do to Your Car Insurance Rate?

You’ve done the right thing and purchased auto insurance to cover your vehicle. Then the unexpected happens and you get in an accident. The auto insurance you carry can help pay for the damage and losses you experience due to the accident, but in order to receive this help you must file an insurance claim. While filing a claim after experiencing an accident may prompt your insurance company to raise your auto insurance rates, this isn’t always going to be the case.

Understanding Insurance Premiums

The premiums you pay on your auto insurance policy are centered upon the amount your insurance company anticipates they will have to pay out when a claim is filed. Safer drivers are less likely to make insurance claims and often pay lower premiums than drivers who have filed claims in the past. Auto insurance rates usually increase for drivers who have had accidents or previously filed claims.

What to Expect When Filing a Claim

Many people think that they’ll automatically experience an increase in their insurance rates if they file a claim. The truth is however, that it really depends on how severe the accident really was. An accident that causes significant damage or bodily injury is most likely going to see an increase in rates, while a minor fender bender or traffic violation might not lead to any changes in your premium at all.

Another important aspect of determining a rate increase after filing a claim is whether or not you were at fault in the accident. Are you a safe driver with no previous accident history who was hit by someone else? If so, don’t expect to see any significant changes in your insurance rates. If though, you caused the accident and are at fault for damage incurred you’re more than likely going to see your rates increase.

How Much Rates Might Increase When Filing a Claim

If you file a claim that leads to a rate increase in your insurance premium, you could see a hike of up to 20-40%. How long the rate increase lasts will contrast from company to company as well as how serious the claim is that you filed. Some insurance companies may only increase rates for a couple of years while others may extend rate hikes for up to five.

What is Accident Forgiveness?

While not all auto insurance companies offer accident forgiveness, there are some that do. A forgiveness program will keep your rates from going up after your first accident if you were at fault. If you know that you’re insurance company has accident forgiveness, it can lend to your knowledge on the influence filing a claim will have on your current insurance premium.

Keeping Your Insurance Rate Down

If you want to keep your insurance rates low it all comes down to minimizing the number of insurance claims you file. The more insurance companies see that you’re an at-risk driver the more likely they’ll be to significantly increase your rates.

The smartest thing you can do to prevent rises in your premium is only file a claim in the event of a major accident that does substantial damage. If your car is totaled you should definitely file a claim, but small dents and minor damage should be taken care of out of your own pocket when possible.

 

Your auto insurance rates are only going to increase if there’s considerable damage done or a substantial amount of claims are filed. A rate increase all depends on what happened and who was at fault. If you drive safely and only file a claim for substantial damages, you can be assured that your rates will continue to stay the same.

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