Are you planning to file a claim with your auto insurance company? Whether you’re filing for a car or an accident, filing a claim can result in a significant increase in premium rates. Here are some key points to keep in mind when filing a claim.
According to InsuranceQuotes, the average increase in the U.S. is between 34% and 41% for individuals with full coverage, including collision and state-mandated liability costs. For example, if you have a clean driving record and your annual premium is $ 1,555 and you are making an accident claim, your premium could go up to $ 2,090 or more depending on where you live.
In addition, a joint study by InsuranceQuotes and Quadrant Information Services shows that a single automated claim can result in significant premium increases. In addition, the premium increases have risen gradually over the past few years.
Insurance tariff effects after an accident
The increase in your insurance premiums that you can expect to see in your insurance premiums after a faulty accident depends on the location, driving record, vehicle and insurance company. When reviewing the following data, we found that drivers should expect premiums to increase by 23% to 73% in the first year after an accident with a fault.
Here are some typical post-accident insurance rates for the first year after an accident with an accident with well-known U.S. auto insurance companies:
|Companies||Average premium after an accident||% Change in the average premium after an accident|
Progressive is the insurance company with the rates hardest hit by an accident within the first year after the accident, with a whopping 73% premium increase. State Farm with a premium increase of 23% is the insurance company with the rates least affected by an accident.
Insurance tariff effects by federal state
While the numbers show that regardless of where you live, your rates could go up after an accident, some states report more costly increases than others. As found in the InsuranceQuotes study, the following five states reported the largest increases in premium after a single auto claim worth $ 2,000 or more:
- California: 63.1% more
- New Hampshire: 60.3% more
- Texas: 59.9% more
- Massachusetts: 57.3% more
- North Carolina: 57.3% more
The states with the lowest premium increases for a similar claim included:
- Maryland: 21.5% more
- Michigan: 26.1% more
- Oklahoma: 27.9% more
- Montana: 30.2% more
- Kentucky: 30.6% more
Experts who commented on the study blame the large fluctuations in premium increases for the fact that insurance regulations differ greatly from state to state. In California, for example, in 1988 voters passed a proposal that limited the factors that insurers could use to determine car rates. Since the California insurance premiums from this point on could only be based on mileage, average kilometers driven and years of experience, it is only natural that the premiums will burst in the event of claims for damages.
In Maryland, insurance companies can base premiums on factors such as gender, age, occupation, creditworthiness, and marital status. The state’s broader regulatory framework for insurance companies can punish unmarried young men with bad credit whether or not they are good drivers, but it is likely why Maryland reported the lowest post-accident premium increases in any state.
Car insurance rates after an accident, explained
How long will my rate be higher?
Your insurance premium may take up to three to five years to increase after a faulty accident if the damage to your vehicle is greater than $ 2,000. Rates vary, with some insurers charging a lot more than others.
How to lower your prices
Although you cannot change the accident after the accident, there are a few steps you can take to lower your premium:
- Ask about forgiveness of accidents: This is a proactive tip instead of a reactive one. However, when you buy car insurance, ask insurers if they have a forgiveness policy. Not all companies offer this, but those who do will give you a culpable accident with no premium increase if you meet certain criteria.
- Consider your deductible: Insurance premiums and deductibles have an inverse relationship. If you choose a lower deductible, the premium will be higher. If you choose a higher deductible, the premium will be lower. If your premiums increase due to fault following an accident, you should increase your deductible (if affordable) to lower your annual premium.
- Avoid making claims for small things: Insurance companies evaluate your premiums based on the financial risk you pose to the company. More claims can mean more payouts for the insurer. If you recently made a culpable accident claim, stop making further claims for minor items for a while.
Shopping spree. As you can see from the data collected above, the percentages of premium increase after an accident due to fault vary widely between companies. It never hurts to receive offers from other providers.
- Increase Your Credit Score. This is not an immediate benefit as it can take some time to improve your credit score. However, insurers seem to offer better premiums to those with credit scores greater than 600.
[ Read: When Should You Downgrade Your Car Insurance? ]
Which claims increase your prices the most?
Unsurprisingly, the InsuranceQuotes study concludes that personal injury claims can cause your premiums to rise the most.
“Personal injuries are always asserted when a driver injures people as a result of an accident,” says the press release. “And because they’re often so expensive, every state except New Hampshire requires drivers to have minimum coverage under these circumstances.”
As the numbers show, a single personal injury lawsuit results in an average premium increase of 48.6%. However, some states reported larger premium increases after personal injury claims, including California (73.2%), New Hampshire (65.9%), North Carolina (65.9%), Texas (64.8%), and Massachusetts (62.3% ).
Comprehensive car claims resulted in the least significant premium increases overall. Unlike personal injury claims, which can result in significant medical expenses, broad claims include incidents like bad gas in your car, hitting a deer, or falling a tree on your car.
In each of these cases, the cost is usually negligible. Still, the average premium increase after a comprehensive claim was 2% nationwide. Only Nebraska (10.6%), Louisiana (9.7%), Minnesota (7.1%), Wisconsin (6.9%) and Iowa (6.8%) reported significantly above-average increases.
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What if the accident wasn’t my fault?
If your insurance company does not offer forgiveness for accidents, it is specific to the insurer whether or not your rates increase after an accident for which you were not at fault. Some providers do not increase your premium if this was your first accident. However, if you have multiple accidents, it can lead to an increase in the premium even if it is not your fault.
Your provider will check how risky you are to get insurance. If you have a culpable accident, there is a higher risk. If you have an accident through no fault of your own, you may not be perceived as a higher risk. However, having multiple accidents through no fault of your own increases your perceived risk with the insurer as you are driving in a high risk accident risk whether you are to blame or not.
The bottom line is that it is better if you have an accident through no fault of your own, but each accident can increase your auto insurance rates.
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