Will My Auto Insurance Go Up After a Claim?

As insurance consumers, we try to avoid premium increases like the plague. For most of us, insurance is a necessary but costly part of our budget. Many factors determine how much we pay for auto insurance – age, where we live, what we drive (Tesla car insurance costs more) and our driving history play a role in our premium. And so too does claims history.

How do you know if your auto insurance premium will go up if you file a claim?

Here are a few things to consider about your claims impact on your auto policy.

Type of Claim

The kind of claim you file determines if your premium increases. Some claims, such as comprehensive claims may not affect your premium. Claims that arise from “acts of God” such as hail damage or flooding typically don’t influence your premium. However, excessive comprehensive claims may.

For example, say a tree falls on your car. You put in a claim, and your insurance premium doesn’t go up. But suppose a tree falls on your vehicle for the sixth time in a year. In that case, your insurance company may increase your auto premium.

Who’s at Fault?

If you have a claim due to an accident, it depends on who is at fault. If you are responsible for causing an accident, such as a rear-end collision, it’s likely you see an increase in your auto premium. But if you’re not at fault – say someone rear ended you, your premium may stay the same.

Overall Claims History

When your insurance company issues your renewal policy – typically every six months or one year – they review your policy for potential rate increases. They examine your driving record, claims history and other changes. Any one of these factors can cause your auto insurance premium to go up.

Company Underwriting

Whether your premium goes up after a claim can also depend on your insurance company. Some auto insurance companies offer “accident forgiveness.” This means that your first accident doesn’t have any effect on your premium. The details about accident forgiveness vary from company to company so talk to your insurance agent about your policy.

The threshold for a Premium Increase After Filing a Claim

Another factor that comes into play when it comes to claims and their effect on your premium is how much the company has paid out on your behalf. Every company has different procedures when it comes to a threshold, but the premise is similar. Say you rear-end someone at a light. It was barely a tap, and your insurance company settled the claim for less than $800. You will likely see a premium increase.

Now let’s say you rear-end someone and push that car into the car in front of them. Your insurance company pays out $15,000 to the other parties. In such a case, you will likely see a premium increase.

 

How to Avoid a Premium Increase

The best way to keep your auto insurance premiums in check is to avoid having a claim in the first place. Practice safe driving, follow speed limits and obey the rules of the road, are the best ways to save money on your auto insurance.

Learn more about auto insurance in car insurance in Las Vegas, NV, Reno, and Corpus Christi. Talk to our agency today about getting the best auto insurance rates available.