How Your Claims History Impacts Your Auto Insurance Costs

You have auto insurance to minimize the financial losses you suffer due to an accident. Yet, filing too many claims could mean higher insurance rates.

Why does that happen? The first thing to know is this. If you were in an accident or suffered another type of covered loss, file a claim. That is why you have the policy, and it should likely meet your financial need. However, it is important to consider the implications of filing multiple claims. This is because benefits remain limited.

Why Does Filing a Claim Increase Your Rates?

Car insurance companies set rates based on the amount of risk a driver presents to them. If you are in numerous accidents, this may indicate you are a high-risk driver. Filing multiple claims is an indication of this.

As a result, the insurer may elect to charge you more for your policy when it is time for you to renew it. Of course, every situation is very different. In each situation, you need to consider what factors led up to the claims.

Should You File That Claim?

In some cases, it does not make financial sense to file an auto insurance claim. For example, if the claim will not pay because the deductible is higher, filing a claim does not create a benefit.

In other cases, you should file a claim. For example, if you are in an auto accident, let your insurer know. You may face a lawsuit later that requires legal defense. That is something your insurance policy may cover for you.

Don’t avoid filing a claim to limit premium increases. Often, you will not see one. Rather, you will usually get the support you need from your insurer to handle the situation. This type of care can be very important in worrisome situations like this.

In most situations, filing a car insurance claim will not create a big jump in your premium. If you file any type of fraudulent claim, however, your insurer is likely to cancel your policy. Most drivers will not need to face this risk.

If you are in an accident, call your insurance provider right after contacting the police. They can help you through the process of filing a claim and managing the damages. If you are unhappy with your coverage, be sure to seek out a new provider.

We can help you get a fast, free El Paso auto insurance quote. We can get you the lowest prices and the best coverage. Call us at 915-562-0009 for more information.