Why Does Car Insurance Increase So Much
After Claim

It's a question that often arises when you're at the car insurance counter: Why does my rates go up after I file a claim? The answer to this question can be complicated, but there are some things that could help lower your costs even if you have filed a claim.   

Making an at-fault claim or having a claim made against you is very likely to raise your car insurance premium, according to one major insurance company. After making an at-fault claim, drivers' rates rose by an average of 28%, according to one major insurance provider.   

The precise amount by which your rates will rise is hard to predict, and it varies based on the severity of the accident, but making a claim for a non-at-fault situation can still have an impact. Here's what you need to know about how claims influence auto insurance premiums, and what to do if your rates go up.

Is it true that my insurance rates will go up after an accident?

When your existing policy term is up for renewal, and you've had an at-fault accident and filed a claim during that time, you'll probably be notified that your premiums are going up. The amount by which your automobile insurance rates rise is determined by a number of factors. 

The severity of the accident is the first thing to consider. A collision that causes $20,000 in damage may result in a larger rate hike than a fender bender that costs $1,500 to repair. There's also your driving record before this occurred.: If you've had numerous at-fault accidents in the last few years, or any moving violations, your rates may rise far more than if it's your first decade-long at-fault accident.    

Premiums are based on how much of a risk you appear to be, and the particular circumstances of an at-fault incident will influence your new premiums.    

Even if you have good auto insurance, there are still several expenses to consider. The costs may be significant — one large telecom discovered that claims costs increased by an average of 28% after a rear-end accident. As a result, you may be looking at a rate increase that would cost hundreds more each year.    

What is the best way to cover a vehicle accident? What should I do if my auto insurance policy ends before my term expires, or what happens if it's not renewed? When should you file an injury claim following a car accident? 

If you look down for a second while driving to work and don't realize the vehicle in front of you has come to a halt, you may be held liable if you slam on the brakes too late and hit them from behind. If you rear-end them and cause damage, your car insurance will typically assume responsibility for paying for it.    

If you cause an accident, your property damage liability coverage will cover any repairs required by the other driver as a result of the collision, up to your limits. Your bodily injury liability coverage will pay for the other driver's medical expenses, up to your limit. Although you'll need to pay a deductible before your insurance company begins paying any claims on your behalf, many states' laws allow for this coverage to be suspended if it's determined that the driver was operating under the influence of alcohol or drugs. In most situations, this protection will cease when you've paid off all of your outstanding debts (not including any).     

Following all of the required procedures to ensure that everyone is safe and that each party has all of the relevant information to resolve their claims promptly after an accident is critical. And don't get worried — this is exactly what car insurance is for. As a refresher, here are the fundamental components of a "full coverage" automobile insurance policy:

How long do accidents remain on your insurance policy?

The good news is that if you have an accident, it won't stay on your record for long. If you make a claim, your rates may go up when it's time to renew your policy. Car insurance companies, however, only consider the past five to seven years of your driving history while determining your rates.    

This means that if you have an accident, your insurance premiums will not be affected by it for a period of time after which it "falls off" your record, as long as you have a clean driving history in the time since.

What is accident forgiveness and how does it work?

Investing in accident forgiveness is one way to ensure that your rates don't rise as a result of an accident. Most major automobile insurance companies provide accident forgiveness, which is an optional coverage add-on. It's frequently offered as a loyalty benefit but can be added to your policy for an additional, usually minor surcharge with many firms. 

 Accident forgiveness, in a nutshell, is a promise that your rates will not rise after your first at-fault accident. For drivers who are prepared to pay a little extra for assurance, it may be a decent bargain. However, not everyone is eligible for accident forgiveness; it's generally only accessible to drivers with an excellent driving record. 

How do I know if my premium is increasing? What are the factors that may influence it after a claim

The amount of your claim will not determine whether or not your insurance rates go up, but it does have an impact. Your insurance carrier, the state you live in, and the degree of damage all factor into whether or If you have a home policy, it can also influence how much It is best to compare auto insurance quotes from multiple companies to get.

The cost of your claim - Not all claims are treated equally; a minor fender bender may not raise your premium, but a major accident in which a vehicle is destroyed most certainly will.   

Your driving history - If you've gone several years without having an accident or a citation, your rates may not be increased for a minor fender-bender. However, “high risk drivers” (those with many accidents and infractions on their record) may be charged a higher rate.   

The at-fault driver - When you submit an insurance claim, you're assigned to an adjuster who investigates the damage and determines who was responsible for the collision. If you were the at-fault driver, your rates may be more likely to rise.  

Will my rates go up after a no-fault accident?

Your vehicle insurance may also come to the rescue if you're not at fault. If another motorist causes an accident, or if your parked car is struck, you may still need to submit a claim with your insurance provider, which might collaborate with the at-fault driver's insurer to cover your losses. 

And yes, as unfair as it seems, having a not-at-fault accident can also raise your rates, but probably not by as much as an at-fault accident.   

It's all about how auto insurance companies evaluate risk — having any accidents on your record, even if you weren't at fault, makes you a greater risk for them and results in higher rates.   

What about comprehensive coverage? You can submit a comprehensive claim if your automobile is damaged by extreme weather, fire, water, crime or thievery.   

What will happen to your rates if you file a claim? Will they continue to rise, or will they stay the same? The answer is that it depends. Some auto insurance firms may not increase your premiums for comp claims beyond a certain amount; others may do so quite significantly.     

Nobody wants to make a car insurance claim, but things happen. The reason you buy vehicle insurance is to pay for damage and injuries resulting from a vehicle accident. Your insurance will reimburse the expenses of the other driver's repairs or medical costs if you are at-fault in an accident, as well as your own automobile damage. Will your auto insurance.   

The fact is that making an at-fault claim or having a claim filed against you is likely to raise your automobile insurance premium by about 28%, according to one major insurance provider.   

Whether you're involved in an accident or not, your rates will likely go up. The precise amount by which they will rise is hard to predict, and it will be determined by the severity of the accident, but even making a claim for a non-faulty incident can affect your rates. Here's what you need to know about how claims   

Key Lessons Learnt

Filing a claim after an at-fault accident will likely increase your car insurance rates.     

It's difficult to predict how much your rates will rise after a claim, but one firm discovered that at-fault claims resulted in an average of 28% price hikes.    

Even a non-fault claim might cause your rates to go up.       

Will my insurance go up after an accident? 

When your existing policy term is up for renewal, and you've had an at-fault accident and filed a claim throughout that time, you'll almost certainly be notified that your rates are increasing. The amount by which your auto insurance premiums will rise depends on a few factors.    

Insurance companies calculate premiums based on how much of a risk they think you’ll be to insure, and the specifics of an at-fault accident will matter when they’re figuring out your new rates.    

Still, the costs could be significant — one major carrier found that costs increased by an average of 28% after an at-fault claim. So you could potentially be looking at a rate increase that would cost you hundreds more per year. 

*Certain conditions, restrictions and exclusions apply. This website provides general information only. Your insurance policy contract takes precedence at all times.