How Multiple Insurance Claims Affect Rates

Filing multiple car insurance claims can complicate your insurance status, potentially leading to higher premiums or even non-renewal of your policy. Understand your options and the impact of claims on your insurance rates; enter your zip code below to receive a free auto insurance quote.

Multiple Claims Car Insurance

When you put multiple car insurance claims through your auto insurance policy, you may incur much higher car insurance rates or possibly a non-renewal of your car insurance policy altogether. Car insurance companies are businesses, and businesses don't take on unnecessary risk if it will result in financial consequences for them. This is why car insurance companies have certain standards that they hold their customers to ensure that they are not taking on more risk than they are comfortable with. If you file multiple insurance claims, you are more high-risk than a driver without multiple claims.

What is a Claim History?

When a car insurance company or car insurance agent is rating a new policy for you, they take your claim history and any moving violations that you may have on your driving record into account to help them determine an appropriate rate for your coverage. These insurance representatives use the information provided to them in a CLUE (Comprehensive Loss Underwriting Exchange) report that they obtain. A CLUE report will show any claim you may have put through your car insurance policy, whether the claim is at fault or not or a comprehensive loss. Car insurance costs are based on many factors, but your claim history and motor vehicle record make the biggest impact on your car insurance rates.

The Dilemma of Filing a Car Insurance Claim

When you have an accident, whether the incident is your fault or not, you may have to put an insurance claim into your car insurance policy. Having a car insurance agent is a real bonus when you are in this situation because your agent can talk you through whether or not it is a good idea to put the claim through your policy. But if you don't have an agent, here are a few things you should consider before filing a claim:

• If your accident injured another person or people, you must file a claim through your car insurance company, regardless of how serious the accident was.

• If the accident you were in caused damage to another person's property but not injuries to another person or people, you may want to consider trying to deal with the other involved party to pay the damage to their property without going through insurance to avoid a claim on your policy. If you caused a lot of damage, you may not have a choice but to put a claim through, but smaller incidents can sometimes be settled outside of insurance if both parties agree to it.

• If the damage to your vehicle was the only damage (no damage to another person or people's property) and you do not have comprehensive or collision coverage, your insurance company will not pay the claim anyway, so there is no need to file it.

• If the damage to your vehicle was the only damage (no damage to another person or people's property) and you do have comprehensive or collision coverage, you may want to get a repair estimate from a reputable body shop before submitting the claim to ensure that the cost of the repair is more than your deductible.

It is best to avoid putting a lot of smaller claims into your car insurance policy if you can afford to pay for the damages on your own. Most insurance companies will carry a claim on your driving record for 3-5 years, so the increased premiums you will pay as a result can sometimes equal more than what you would have paid if you had not put the claim through your policy.

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What Happens if You File Multiple Car Insurance Claims?

If you file multiple insurance claims, you will inevitably see an increase in your auto insurance premiums when your policy renews, or your car insurance company may not choose to offer you a renewal of your policy. This is called a non-renewal. When your policy is non-renewed, it is hard to find replacement insurance at an affordable price. In addition, the claims you have filed through your car insurance will impact the rate on the new policy you must purchase. There is no limit to the number of claims that you can put through your policy in one policy term (6 months or 12 months), but your insurance company will keep track of those claims and any past incidents, and they will impact your renewal premium as a result, or notify you that the policy will not be renewed. Too many claims can be detrimental to you financially, but you have to weigh the cost of covering the damage out-of-pocket versus the increased premiums you may pay due to putting in too many claims.

At-fault Versus Not-At-Fault Claims

Claims filed with insurance companies are determined as at or not at fault, depending on the loss you incur.

An at-fault accident is an accident that you have with another vehicle, pedestrian, or stationary object that is your fault. For example, if you rear-end another vehicle or side-swipe a pole in a parking garage, it is clearly due to your negligence that the accident occurred. Likewise, if you hit a pedestrian who is crossing the street, you are clearly at fault. These incidents will be filed as at-fault with your insurance company and weigh more heavily on your car insurance premiums than an incident you did not cause.

A not-at-fault accident is an accident that you are involved in that you did not cause. For example, if you are traveling on a roadway and another vehicle pulls out from a side street and collides with your vehicle, the other party is clearly at fault. In this case, the other driver's insurance would be the primary payer of the claim rather than your insurance policy. Likewise, a comprehensive claim results from something that happens to your vehicle due to fire, theft, vandalism, weather, or an encounter with an animal. These types of incidents are considered not at fault. Typically, not-at-fault and comprehensive claims are not held against you by your insurance company unless you have multiple claims like this or have a not-at-fault or comprehensive claim in addition to other incidents on your driving record.

In some cases, the fault of the accident is not clear. When this happens, you should file a claim with your insurance company so that the claim adjuster from your insurance carrier can decide the fault of the claim with the claim adjuster from the other party's insurance company.

Multiple Claims FAQs

Q: What happens if I put too many car insurance claims through my policy?

A: If you file multiple insurance claims through your car insurance policy, you will most likely see your car insurance premiums increase, or your auto insurance company may decide to non-renew your policy because you are no longer an acceptable risk to them.

Q: Will a not-at-fault accident impact my auto insurance rate?

A: Typically, not-at-fault accidents or comprehensive claims will not increase your car insurance premiums, but if you submit too many claims, whether at-fault or not-at-fault, your insurance carrier may decide to raise your rates or possibly non-renew your policy.

Q: Do I have to notify my auto insurance company for all car insurance claims?

A: If you are in an accident in which you cause injuries to another person, you must report the claim to your insurance company. If the accident does not result in injuries or causes damage to only your vehicle, you may be able to settle the claim outside of insurance or with the other driver if they are agreeable to it.