The relationship of Claims and Premiums
The relationship between the two can be quite confusing. It depends on the state that you are living in and it also depends on the kind of policy or claims that you have made. Some claims do not affect your premiums but there are those that really affect them. The real question here is which one.
Basically there are three ways in which your claims can affect your premiums. These three are the ISO number, the driving record as well as the actual claims that you will have filed. These three are the major factors that you will need to consider since they can increase or decrease your premiums.
The ISO number refers to “insurance Services Offices”. What they do is they actually rate cars on the price that they might amount to when they get damaged. What this means is that they will have already researched different cars and they will also have rough estimates on how much repairing your car will be.
ISO numbers are numerical numbers that determine the extent of risk cars have for insurance companies. They are arranged from lowest to highest. The higher the number the more of a risk a vehicle is, the lower the number the less the vehicle’s risk.
Another factor is your driving record. Every little violation that you have incurred on the road will be recorded and put into a file for future reference. These files affect your premiums since companies see individuals who have many traffic violations and accidents as greater risks to companies since is simply shows how reckless and unreliable they are on the streets. The system that we work with greatly rewards those who follow traffic rules and regulations and severely punishes those who do not.
The third one is the number and kind of your actual claims. There are individuals who go to their companies for help even for minor things. The quantity shows that you are not really careful and thus pose as a greater risk. The quality of the claim also affects the premiums since they will also be looking at what kinds of situations you were involved in. They will see the causes of the claim. They will determine whether it was neglect, carelessness, accident or simply other people’s will.
Always keep in mind that everything related to your car will probably be recorded and tucked away in a file. Your premiums are greatly affected by them