How Will Your Car Insurance Be Affected After a Claim?

April 7, 2017 · Posted in General Articles on Car Insurance 

After you file a claim, your car insurance premium is normally expected to get higher. This is so because the car insurance company now considers you as a liability. They have to compensate for the loss whenever you get involved in an accident, therefore they raise the premium rate to ensure that it covers all the expenses and gets profit for them.

To what extent your car premiums will go up is really difficult to comprehend. One of major factors is the number of claims you have had already. If your driving record shows instances of past accidents then premiums will increase further. If the frequency of accidents is more then you are considered a driver with high risk, and you may have to pay highly for it.

Your insurance is also affected by how often the car accidents occurred. If you get into two car accidents within a year of each other you can expect your rates to go up much higher. No matter where you look, your insurance premiums will be affected by your driving record this way, although you may be able to find a better deal by searching around.

The insurance companies save the highest premiums for young drivers. According to a research done by the insurance companies, it has been proved that the young male drivers are more prone to accidents. These drivers have new driving records and hence are considered a burden by the insurance companies. If such drivers face accidents then their premiums will shoot up and remains so till they create a good driving record of many years.

At times, your premiums may not be very much affected. This happens only when the fault was not on your side or when you have had a really good driving record of many years. However there are some insurance companies which may still escalate your rate despite of this.

To understand how the rates are set you need to know a little about ISO symbols. ISO stands for Insurance Services Offices, Inc. and they assign every car a certain symbol or number that relates to how much the care is worth. This is what makes the insurance companies ratings fair and equal for everyone. If your ISO rating is high it means that you have an expensive vehicle and it will cost more to repair. Vehicles that cost more to repair are required to have higher premiums. If you get into an accident your premiums will go up relative to what your ISO rating is as well.

Your insurance will of course not be withdrawn after a car accident, but it possibly will become so huge that you may have to cancel it. Even if you cancel the insurance after an accident, the insurance company will still anyways cover your claim. You must provide the correct time when the accident occurred. This is important because if your accident took place even a minute after the expiry of your plan, you will have to bear all the expenses yourself.

Knowing this you now realize how much a claim affects your premiums. You may therefore see it as unnecessary to file a claim for small accidents, seeing as you may end up paying double or more in higher premiums. In most cases it is better not to file a claim if the damage is under $750 dollars. You may also want to avoid putting in a claim if you have another accident on your record that same year.

Graham McKenzie is the content syndication coordinator for South Arica?s leading car insurance portal.

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