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What to Know Before Filing a Car Insurance Claim

When you are involved in an auto accident and have to file a claim, you may see your auto insurance rates increase. Some drivers don’t anticipate these kinds of changes to their policies and others may be entirely confused about whether changes will occur. While auto insurance companies draw up their own rules on policy premium fluctuations, there are some industry standards that can help drivers get a better understanding of what to expect.

It Wasn’t My Fault

Most auto insurance companies agree that rates shouldn’t go up for drivers who were not at fault in an accident. However, depending on the accident specifics, the state and the insurance companies practices, you could find yourself paying for something you didn’t cause. One thing to note is whether your state of residence has a traditional auto insurance system or a more sophisticated system involving comparative fault. While some states insurance systems simply indentify a primary at fault driver, others try to assign a portion of the blame to multiple drivers in an accident. In fact, experts point out that an insurance company’s claims adjuster is often one of the parties involved in assessing fault. In turn, this means that the “portion of fault” may go directly into your insurer’s computer which can lead to your premium being recalculated.

Accident Forgiveness

Unless a driver has “accident forgiveness” written into their auto insurance contract, rate hikes are inevitable. Actual accident forgiveness, a relatively new offering by insurers and is hard to get. For the most part this preferential treatment is restricted to members who have zero accidents on their driving record and are considered “preferred customers” either because they have been with the insurer for a number of years or because they have paid extra for a plan upgrade. Unfortunately, this perk can be stripped away after more than one at-fault accident and the insured will receive the same rate increases as regular customers.

Level of Damage

One unclear aspect of accidents for drivers is whether an accident is “substantial” enough to generate insurance rate hikes. Usually, small fender benders resulting in minor damage with no bodily injuries will not increase rates. However, no matter how small the accident most insurance companies require that the accident be reported. Many times with fender benders, insurance companies will excuse the accident and refrain from raising rates. In the event that each driver in the accident opts to walk away from it without reporting it to the authorities, any and all damage done to ones car is each individual owners responsibility. A good rule of thumb to go by is, unless the damage caused by the minor accident is obviously less than your deductible, it is best to report the accident to the police and your insurance company immediately.

Delayed Rate Hikes

In some cases, if an accident occurs right before the re-up time, the customer will see a new bill that doesn’t include a rate increase and think that he or she is safe from future hikes. These drivers may be unpleasantly surprised when they see a big increase in their next bill. This happens when drivers choose long-term lump sum payments, either annual or semi-annual billing schedules, for their policies. Drivers can be more informed on how an accident will impact their rates by asking their insurance company rep the following questions:

  • Was my accident “bad enough” to increase my rates and by how much?
  • Do I qualify for accident forgiveness or other similar perks on my policy?
  • What evidence do I need to provide to prove that an accident was not my fault?
  • If there was a rate increase, when will it show up on my bill?