How does filing an insurance claim impact your insurance rates?


While buying insurance you buy it with the intention of protecting your home or your car from damage.  However when you are involved in an accident, would be in your best interest to file for a claim?  There is a little bit of ambiguity in answering this question.  The reason being, making a claim can seriously impact your insurance rates even if the accident was just a minor one and even when you were not at fault.

Irrespective of seriousness of the accident or who was at fault, the number of claims that are made will seriously impact your auto insurance rates.  The more the number of claims the greater the hike in rates, and filing too many claims may cause some serious trouble.  Insurance companies might not want to renew your policy and if the claim is filed because of your fault or negligence, then be very sure that the rates will certainly rise.

But on the other hand if the fault is not yours then the rates might or might not change.  For instance, if your car is hit from behind while it was parked or if the siding blew off from your house during the storm, then it is clearly not your fault and there might not be any increase in insurance rates.  But this might not be the case always.  Other details such as the number of claims made previously, the speeding tickets that you have got, the occurrence of natural disasters in the area you live, and even a low credit score can all have an impact on your insurance rates even in case the last claim was made for a damage that was not caused by you.

All claims are not treated equal and rate hikes depend on various factors.  For instance, slip and fall, personal injuries, dog bites, mold, and water damage are all red alerts for insurers.  All of these will have a negative impact on the insurance rates and the insurer will not be too keen to continue giving coverage.  Whereas, the most dreaded speeding ticket (first time) might not cause a hike in rate at all.

The rate hike could be in the range of 20% to 40%.  These increased rates will vary from one insurer to another and might last for two years or more.  If the insurer decides not to provide coverage, then you will need high-risk coverage where the premiums will be sky high.