What happens after you file a car insurance claim |
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4. If you're
at fault, prepare for a rate increase.
Though your insurance company might not drop you after an at-fault
accident, it will likely increase your premium at the next renewal
term.
"Some companies say, 'If you go three years without
a claim, we give you a discount. If you get a claim, we get rid
of your discount. If you start getting more claims, we start raising
the rates even higher," and it's within the insurers legal
right to do so, says Stephen Sugarman, a professor of law at the
University of California at Berkeley.
"We have different policy options for different
customers," says Siemienas. Some people, depending on how long they have
been with us, may get a 'freebie' (meaning no loss of coverage and possibly no
premium increase) based on their tenure with the company, or how long they've
been claim-free." Some insurance companies offer "accident
forgiveness" policies that enable a policyholder to file a claim for an at-fault
accident without the fear of a future rate increase. The drawback is that these
policies might require a higher premium, even if the driver has a clean history.
And though an accident could be "forgiven," it won't be forgotten --
it will still remain on the driver's record.
When assessing rates, insurance companies might look
at your tier to help determine how much you'll have to pay.
They may also look at your "insurance
score," which is usually calculated by a third party and
is derived from information in your credit report.
"The insurance score is one of many factors we
use in determining an individual's auto rate, along with the type
of car a person drives, their past driving record, their age, and
things such as that," says Siemienas. "We try to be able
to charge the appropriate rate for the appropriate risk."
A small percentage of people who have
an excessive number of tickets, at-fault accidents or a DUI conviction may not
be able to find regular car insurance on their own. In that situation, they'd
need to contact their state insurance department to join their state's high-risk
pool, or a find a nonstandard insurer. Both choices mean higher premiums. 5.
A minor accident could be a major problem.
A person involved in a
minor accident like a fender bender might not think that it's a big deal. They
may even decide not to tell their insurance company about the accident, preferring
to pay for any damages out of pocket. "But what some people think is minor
could turn out to be a lot bigger at the end of the day," says Siemienas.
For example, that fender bender could cause a personal injury that's not evident
until a week after the crash. | 
