Inile Insurance

Some drivers hesitate to file a claim with their car insurance company unless absolutely necessary because they fear that their rates will automatically increase.

This is not always the case. Whether your car insurance rates go up and by how much depends on your car insurance company, the circumstances of the incident, and whether you have accident forgiveness on your policy. Although you cannot know for sure how filing a claim will affect your auto insurance rates, the following information may help you predict the effects somewhat.

These are some of the factors that your insurance company will likely consider when determining how an accident will affect your car insurance rates, if at all.

• The severity of the accident. Damage from an accident can range from a scratch in the paint to a totaled car.
• Greater amounts of damage are likely to lead to a greater rate hike, or surcharge, because the insurance company has to make a larger payout.
• The at-fault driver. In many cases, your car insurance rates will increase if the accident is your fault, but stay the same if the other driver is at fault. However, certain exceptions apply, including the following:
• Some companies will still increase your premium because you're statistically more likely to get into another accident, posing more risk to your company.
• If you live in a no-fault state, both insurance companies pay for some of the costs, and your rates will likely rise no matter who caused the collision.
• Your value to the company. Safe drivers are cheaper for car insurance companies to cover.
• If you have a long history of safe driving and you have been with the company for a long time, you are may see less dramatic hikes in your premium than someone with a poor driving record.
• Some companies also offer accident forgiveness for good drivers. This means your first accident would not result in rate hikes.

If your car (or equipment/goods inside your car) is stolen, you'll likely make a claim to recover the costs. Because your car insurance company will have to pay out on this claim,* you'll likely experience a rate increase.

Note that even living in an area with high crime rates can increase your premiums. The more likely you are to become a victim of auto-related crime, the more risk you present to your auto insurance provider. Higher risk means higher rates.

* You'll need comprehensive coverage to file a claim for theft.

Each company has its own policies that determine the effects on your car insurance rates in the event of an accident, theft, or other type of claim.

For example, some companies will increase your premium for ANY claim, even if:

• As little as $1 in damage occurs.
• The accident was not your fault.

Other companies might not raise your rates if:

• There were only small amounts of damage.
• You were not at fault.
• It was your first accident (see below).
• You have a good driving record.

To learn more about how insurance companies determine whether to impose a surcharge.

Accident Forgiveness Policies

Some companies offer accident forgiveness to customers with good driving records.

An accident forgiveness program typically allows good drivers to have one accident without suffering a rate increase following the claim, regardless of fault.

Check with your car insurance provider to see if they offer such a program.

When you get into an accident, your car is stolen, or another incident occurs, do not automatically avoid filing a claim because you think your auto insurance rates will skyrocket.

An increase in your auto insurance rate is not necessarily permanent. Some companies increase your rate temporarily, but allow it to drop each year that you do not have another accident. Within a few years, your insurance costs can return to their pre-accident levels.

Consider your company's policies and the accident details to determine whether you want to file a claim. Remember that filing a claim allows you to:

• Present your side of the story.
• Have your insurance company investigate the accident.
• Use your coverage to pay or either your or the other party's damages or injuries.