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How Claims Affect Your Auto Insurance Premiums
Many people wonder how filing a claim will affect their auto insurance rates, and in some cases many choose not to file a claim for fear of a rate increase. Depending upon the circumstances surrounding the damage to your vehicle, your insurance rates may or may not go up as the result of a claim being filed. So, this article will address some of the different situations in which your insurance car insurance policy premium rates may or may not increase due to your filing a claim.
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If the accident was not your fault and the damage to the vehicle is claimed other car owner’s insurance, then your premium is unlikely to increase. If it was your fault or the fault of an uninsured driver, then your insurance company will have to pay out. As a result they will increase your premium, since you will now be considered as “high risk”. Also, if you have made several claims, then your premium will increase further than a first time claimer.
Comprehensive Insurance Claims
Comprehensive insurance usually covers damage to your vehicle that results from no fault of your own and is not caused by a collision or car accident. Comprehensive coverage covers your vehicle in the event it is damaged by hail, windstorms, fire or any other act of God. When you file a claim for damage to your vehicle under this type of coverage, your policy rates should not increase at all.
You will have to pay your deductible, but the insurance company is generally prohibited from raising your rates for comprehensive policy claims. Likewise, comprehensive insurance coverage would cover your vehicle in the event that it was stolen and was not able to be quickly recovered by you or law enforcement officials.
Collision Insurance Claims
Collision insurance covers you and your vehicle for damage and injury that results from an automobile accident of any kind. Unlike filing a claim for comprehensive coverage, filing a collision insurance policy claim may result in increases in your policy premium. Claims can be paid up to the actual repair or replacement amount minus a predetermined deductible. Depending upon the severity of the accident and if you were at fault or not, your policy premiums may increase considerably and the insurance company may even decline to renew your policy when it comes time for renewal.
In determining whether to raise your policy premiums, your car insurance company will usually consider if you were at fault and any other extenuating circumstances. If you committed a traffic violation or broke a driving law that resulted in the vehicle accident, you can expect your car insurance premiums to rise substantially – if the car insurance company continues to offer you coverage at all.
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Liability Claims
Claims paid for under liability coverage will pay for car repair costs and medical expenses for other parties involved in an accident—besides the insured drivers. With liability claims, the insured driver’s vehicle and expenses are not covered and will not be paid.
Other Considerations
While being involved in an at-fault accident will generally raise your insurance premium rates, some car insurance companies offer alternative policy types that may help you avoid this. These days, many major car insurance companies are now offering accident forgiveness programs that will allow you to avoid premium maker increases with your first accident which is deemed to be your fault.
Insurance companies offer varying degrees of this program. Some policies offer total forgiveness and others offer partial forgiveness in the form of modest rate increases only.
While these types of active forgiveness programs are proving to be very popular, some people complained that the increased cost of these types of policies is in itself a means of charging the policyholder. They would select premium even before the driver is ever involved in an accident. In short, if you’re involved in that and at fault accident, your car insurance rates will go up one way or another.
