Will Insurance Claims Affect My Rates

More than your house, priceless jewelry, expensive furniture, gadgets etc your car is the most important asset and also the most vulnerable. Car insurance covers risk in case of theft, accident, or vandalism. Lending institutions and leasing companies require your car to be insured before financing them.

The driver of the vehicle is responsible for the safety of the passengers in the car: other car owners whom you share the road with; pedestrians; private, and public property. Insurance cover helps in covering the damage and injury costs involved in case of an accident, or collision.

In the unfortunate instance of you being involved in a car accident, the first thing you should do is to contact your insurance agent. The insurance agent will then contact the Claims Adjuster who is responsible to assess the damage, and resolve any issue including identifying the guilty party.

Types of Deductibles
Comprehensive and collision are the two types of deductibles. Damaged caused by acts of nature such as hail storm, tornado, hit and run, or vandalism are covered by comprehensive deductibles.

Damage caused by collision of your car with another vehicle while on the road is covered by collision deductibles. Insurance premiums are affected by collision claims while comprehensive claims generally do not affect insurance premiums.

What Determines Insurance Premiums
The affect on the insurance premiums is determined by considering many factors. If your insurance company recovers losses caused from the insurance company of the driver at fault there may be no change in your insurance premium. Your insurance premiums are likely to increase by as much as 20% if you are the guilty party.

In case you are responsible for a multiple car pile-up resulting in grievous injuries, your car insurance may be cancelled when it comes up for renewal. However, if the damage caused in the accident you are involved in is less than $2000, insurance premium may rise by about 3% or less.

Insurance companies are in the business of making profit. They need to show good results to their shareholders; hence they do not like policyholders filing multiple claims even if the claimants are not responsible for the accidents. And such policyholders will find their premiums increased or their policy cancelled. Insurance companies dislike policyholders frequently involved in accidents as they negatively affect their bottom line. Insurance companies will generally forgive one collision claim.

Cancellation Of Your Policy
Policyholders whose policy is cancelled as a result of collision claims are entitled to file an appeal through the Insurance Department. Patience and perseverance is required to fight insurance companies who have all the resources at their disposal. The case could take up-to a year. In case your car is valued at $2000 and you have deductible of $1500, it is prudent not to file a claim. Having a policy does not mean that you have to file a claim with your insurance company in case of an accident, particularly if the difference between the valuation of your car and the deductible is insignificant.

It is advisable to have the car repaired at your own expense if the damage is minimal as filing a collision claim could result in increased future premiums over an extended period. You could end up paying more by way of premiums than the total cost of repair. Do your calculations before you decide to file a collision claim in case of small damages.

Finally, keeping a clean driving record pays as insurance companies believe that people who have got a lot of tickets, or involved in many accidents in the past are likely to file claims in the future. Having a good risk profile is likely to reduce your insurance premiums.