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Have you ever been hesitant to tell your car insurer about minor damage to your car because you were afraid of skyrocketing rates?
The Insurance Information Institute reports that
the average expenditure for car insurance has steadily increased each year since
1999. If no other party is involved, you may be tempted to keep quiet about a
minor claim.
But why have insurance if you can't use it when you
need it?
"People are often too petrified to file a claim
because they think they won't be able to afford a premium increase,"
says Eric Tyson, author of "Personal Finance for Dummies."
We all want to be accident-free, but "it's important to remember
that filing an insurance claim isn't necessarily bad," he says.
"Insurance is there to protect you, and it makes good financial
sense to use it when necessary."
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| Before you file a car insurance
claim ... |
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The first part of the claims process is pretty straightforward.
"In an accident, an adjuster will be assigned and,
based on the specific factors of the claim, they may talk to you
and they may work with the other driver involved. They also might
look at police reports, take a look at your car and look at the
car of the other individual involved in the accident," says Mike
Siemienas, a spokesman for Allstate insurance company in Northbrook,
Ill. Then, the adjuster will work with you to ensure any necessary
repairs are paid for and completed.
What happens
after the claims process varies. If it is determined that you are at fault, your
rates could go up or you could lose coverage altogether. Here are six things you
need to know about car insurance both before and after you file a claim. 1.
Know the difference between cancellation and nonrenewal.
There's
an important distinction between an insurance company choosing not to renew a
policy versus canceling one. According to the Insurance Information Institute,
a company can't cancel a policy that's been in force for more than 60 days unless
one of the follwing happens.
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Reasons a policy can be canceled: |
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The premium has
not been paid. |
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The insured person
fraudulently filled out the insurance application. |
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The policyholder's
driver's license has been revoked or suspended. |
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However, insurance companies can decide not to renew
a policy once the existing term is over.
"Companies generally write policies that are
renewed every six months or one year," says Mike McCartin,
an insurance agent with Joseph W. McCartin Insurance in College
Park, Md. "If you have an accident where you are at fault,
and you've had previous claims in the last three years, your insurer
might decide not to renew your policy." That's a general guideline,
but McCartin says there are no hard and fast rules about when a
company can choose not to renew. | 
