Will Filing a Claim Raise My Auto Insurance Premium?
Many factors are considered for insurance carriers when determining the cost of auto insurance premiums – One of which is filing a claim after an accident. The answer is not black and white , there is a decent amount of gray when it comes to cost changes following a claim because it varies widely based on state requirements and details surrounding that particular incident.
Determining Who’s at Fault
Specific details of an accident are vital in assisting with the process of placing fault. Proof of fault can come from photographs, witness statements, security footage, police reports etc.. Lack of proof or evidence can lead to an inaccurate assessment of the incident, which could result in an “At Fault” charge on your driving record. When a driver feels that they are not at fault for an accident, it is very important to scan the surrounding environment for evidence. Without substantial evidence, the claim may come down to a “he said, she said” situation. Evidence helping your case can come in a variety of ways, like people that witnessed the accident (be sure and get their contact info.), video recordings (there are cameras recording everywhere these days), and it would be a good idea if possible to get a statement from the other party recorded on your smartphone of them admitting fault or at least a recount of the incident immediately after the accident before they have had a chance to think twice about it thereby changing the story to their advantage. It’s human nature to be honest at first before thinking through the implications.
Reporting a Claim
Most drivers will experience an accident (or two) in their lifetime – sometimes they are unavoidable, and sometimes human error comes into play and we just mess up. Most every accident, big or small, should be submitted as a claim to an individual’s insurance company. If you feel that reporting a claim can cause your premium to go up, consider that in the case where the other party wants to pursue the incident in court, you might be compromised financially meaning the carrier may have grounds to deny the claim outright if you don’t file the claim. This would result in money having to come out of your pocket to settle the loss which would be way worse than a small percentage increase in premium. Here is where your local independent insurance agent can help. He or she can give you guidance.
Premiums Changing
If you are found at-fault, you can expect your premium to increase somewhat. This is because your insurance company is now responsible for covering the expenses of the incident and they will want to share that burden with you similar to the way a contractor may ask for an additional compensation for needed work not contemplated at the initial bid on a job. On the other side of things, if you are found “Not At Fault” you will usually not incur a premium increase in most circumstances unless it happens often¹. In that case, insurance companies can raise your premium anywhere from two to ten percent, or more.³ Some states are not legally allowed to increase in the case of “Not At Fault” accidents. Some states are what are called “at-fault states”, which means that drivers who are completely or partially (50 percent or more) at fault for an accident have to take all or some (proportional) responsibility and if there is a payout, it can raise their rate.
Summary
While there is not one simple answer to the question of “Will filing a claim raise my insurance premium?,” the best way to avoid it is to eliminate the need in the first place. And how do you do that you might ask? The answer is to drive defensively, carefully, and whatever you do, don’t text and drive!
If you’d like more information about how claims can affect your auto insurance premiums, or need your insurance shopped around for better price and or coverage, please feel free to reach out to us. We’d love to hear from you!