by Guest » Thu Jan 10, 2008 05:47 pm
When you make a claim on your auto insurance policy, the insurance company begins to consider you as potentially risky. Hence, a claim does, in normal circumstances, increase your auto policy premiums.
Why does a claim increase your policy premiums?
When you make a claim after an accident, your insurer may have to pay for:
- Medical treatment for you and your passengers (if any)
- Repair damage to your car or any other property
- Your lost wages and any other damages
Are there other factors that affect auto policy premiums?
Claims alone don't trigger increase in insurance rates, there are also few other factors that may influence your insurance premium. Some of the factors may be directly related to you and some may not be.
Here are few other common reasons why your premiums might go up:
Here are few other common reasons why your premiums might go up:
- Receiving a traffic ticket: Your receiving a ticket, may not pose any threat to the insurer, but that definitely makes you a risk. Tickets for traffic violations reflect carelessness in your driving and hence insurance companies see you as higher risk which means higher rates for you.
- Too many claims paid by the insurance company: You may not have been the claimant, but the insurance company might have paid a lot of money over claims made by other policy holders. In such a case too, your premiums might go up. You may not have anything to do with this, but since there had been too many claims made by other policyholders, the insurance company may decide to increase the rates of every policy holder in their company.
- Adding a new driver to your policy: Each time you add a new driver to your existing policy, your rates will go up. Irrespective of what age the driver is, or the driving record, your auto rates will go up. If the new driver is a teenager or someone with a not so good driving record, companies make greater increase in rates.
Does a claim for PIP coverage in no-fault state affect premiums?
Claiming Personal Injury Protection (PIP) or First Party Benefits in a no-fault state does not increase your auto insurance rates. If you make a claim, your PIP coverage will compensate up to the coverage limit after which the additional medical bills can be transferred to your health insurance.
One thing to remember here is to not make your health insurance a primary means. If you do make it primary, then in case of any medical bills, your health insurance will kick in before PIP, even in an auto accident.
One thing to remember here is to not make your health insurance a primary means. If you do make it primary, then in case of any medical bills, your health insurance will kick in before PIP, even in an auto accident.
How can you avoid an increase in premium rates?
The best way to prevent an increase in premiums would be to avoid accidents and traffic tickets. But some companies offer policyholders an accident forgiveness program. These programs are designed such that you (policyholder) can be forgiven for minor accidents up to a certain number of times and your insurance rates will not increase. However, there are limitations to the number of times or the frequency of accidents beyond which your rates will go up.
Insurers have excluded major accidents from the program and if you have a claim for a major accident, you may be disqualified for the program for as long as it reflects on your policy. Again, tickets for Driving under Influence (DUI) may also prevent you from qualifying for such a program. So, if you want to qualify for this program you need to have a good driving history with no claims for a major accident.
Insurers have excluded major accidents from the program and if you have a claim for a major accident, you may be disqualified for the program for as long as it reflects on your policy. Again, tickets for Driving under Influence (DUI) may also prevent you from qualifying for such a program. So, if you want to qualify for this program you need to have a good driving history with no claims for a major accident.
I live in Pennsylvania, which is under a 'No Fault' system. What happened was me, along with 3 friends were involved in a car accident;my friend was the driver. A car hit us from the side, hitting the front of our car, and we had the green light. The driver of the other car was technically at fault, and now the real problem I'm facing is this: We all went to the ER to get checked on, the bill comes to us, my friend tells me he's claimed us all into his insurance for medical coverage, BUT his insurance tells him that because it's a no-fault law, we are each suppose to claim the accident ourselves to our own insurance/parents insurance...which doesn't make sense to me at all. His company is Allstate, and I've talked to the representative and did my research. According to the representative, if I claim with my dad's auto insurance, the bill will be taken care of and his premium will not rise, but where's the logic? Why would my dad have to claim me if it had nothing to do with me when the responsibility is on my friend? Plus, he(dad) called his company and they told him his premium would rise. So now i am stuck, and unsure of what to do. The bill itself is $800.00 and there is no reason why I should pay out of my own pocket or increase my dads premium because of this. Can anyone provide any help as to what I should do..? Why isn't the driver allowed to claim all of us in his medical coverage? Why do we each need to claim this separately to our own coverage when the driver is to be responsible? thanks for any comments
Posted: Thu Aug 04, 2011 01:39 pm Post Subject: Premium increase
I live in NJ & have a good record of driving, never got into a car accident for the last 25 years. Unfortunately, a guy hit the front of my car when he tried to cross the red light & his brake didn't work, so he hit my car right in the front. I had all the police report stated it's not my fault. But my AAA increase my premimum to $700.00. How do I write a letter to demand a decrease in this case? thanks
Posted: Thu Aug 04, 2011 10:58 pm Post Subject:
Increase from what to $700. What year, make, and model of vehicle? Considering you're in New Jersey, one of the top five states with the worst drivers in America, it doesn't seem all that terrible on the surface.
Writing a letter to "demand" a decrease is largely a waste of your time. It's not your call. Talk to your agent about requesting "reconsideration" of your increase instead, since it was not an at-fault accident.
Posted: Wed Aug 31, 2011 09:18 pm Post Subject: Auto Insurance info on not atfault
My daughter was in a three car accident and she was driving her aunts vehicle when it happen. She was not at fault. she called her aunts auto insurance and filed a claim and submitted all documents they requested. But now her aunt told me that her insurance co. added my daughter to her policy with out permission. I've called them and told them my daughter lives with me in Georgia and Not in New Jersey. they said in NJ They can add her. Can they just add my child with out permission even when she never lived with her aunt?
Posted: Thu Sep 01, 2011 03:48 am Post Subject:
There is no reason to add your daughter to her aunt's auto policy. However, if there is no increase in the premium, then it really doesn't matter, does it?
Regardless, your daughter's aunt is the policy owner, and she is the only one who can deal with the insurance company concerning policy changes.
Posted: Fri Sep 23, 2011 02:23 pm Post Subject: cancelled insurance
I was insured for 15 years with one auto company and decided to switch my auto and home insurance. One week after I changed companies, I had an accident that totaled my car. Could my original insurance still be in effect; the new company is not cooperating in payoff.
Posted: Fri Sep 23, 2011 05:28 pm Post Subject:
If you started and paid the premium for "Policy B", they are responsible for your loss. It's too bad for them that the claim happened so soon.
The word in contract law that describes this situation is ALEATORY -- unequal giving and receiving. You gave them the premium they asked for, they gave you a contract that obligates them to pay -- even if they have to pay more than you paid them. That's the nature of the insurance "game".
Keep talking to the Company B claims department until they come around. Ask to speak to a higher level supervisor.
Posted: Sun Oct 02, 2011 06:20 pm Post Subject: Auto Insurance
If there is a single vehicle accident and Personal injury claim was made,does the auto insurance premium will increase?
Posted: Sat Oct 22, 2011 12:54 am Post Subject:
I am having a dispute with my boyfriend about car insurance. We live in Florida, which is a no fault state. He says that if a car hits my car and it is they're fault, both that driver and my rates will go up. I say that in that situation sinse I was not at fault, the person's at fault would rise and mine would stay the same. So ultimately my question is, if i am in an accident that was not my fault, would my rates go up? Does it depend on the Company?
Posted: Tue Oct 25, 2011 06:48 am Post Subject:
No, your rates shouldn't go up if you get involved in an accident that was not your fault.
That's why it's important that you get a police report stating that you were not at fault and immediately notify your insurance company to be on the safe side.
However, your rates may increase due to several other reasons such as, other driving rules violation, your insurer's financial condition etc. But the insurer can't raise rates because of a 'not at fault accident'.
Posted: Fri Nov 18, 2011 06:12 am Post Subject: will my insurance go up
i was driving and a cat ran out infront of me.
i turned to miss it and the wood i had in the back of the truck flew out and smashed the quarter panel no other damage will this increase my insurance if i claim.
damage was estimated at 1475.00
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