5 Questions Answered about Insurance Claims Staying on Your Record

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Here's what you need to know...
  • Your insurer will only penalize you for an accident where you are found to be at-fault
  • Accidents will stay on your record for three years in many states, but seven years in some states
  • If you are at-fault in an accident, your premiums will rise regardless of the amount of damage you cause

Consumers buy auto insurance to satisfy state laws and also to protect themselves from the financial loss.

Unlike most of the products or services that you buy from retail stores or other providers, car insurance is one of the few products that you want to use because it means that you have suffered a loss.

Car insurance is used to protect you from financial loss when you face a situation where filing a claim is the only option. When you have to use it, you will be happy you have it.

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#1 – How will a car insurance claim affect your car insurance rates?

 

Not all claims will affect your insurance policy, but those that do can increase your rates significantly.

Many people are reluctant to file claims on their policies because they simply do not know which claims are going to end up costing them money for the years to come.

As soon as you file that claim, your insurance provider will help you in several ways:

  • They will act as your advocate and speak with the other party or their representative
  • They will tow your vehicle to a safe place
  • They will arrange appointments with repair facilities
  • They may possibly even set up a car rental for you so that you can get to and from work

Having the right coverage will pay off and make life easier when it comes time to pay repair bills or rental invoices, but all of this may come at a cost.

Even though you have paid your insurance premiums regularly for coverage, having an accident on your record and filing a claim can affect your rates in the future.

If you have minor damage, it might be in your interest not to file a claim at all. After all, if a rate increase following an accident is more than the cost of the damage, you will regret filing.

Insurance companies can only legally raise your premiums when you are found to be at fault for the loss.

This is why non-fault comprehensive claims for damages sustained while a vehicle is parked do not affect the policyholder’s rates at all. It is collision claims, where the vehicle was moving and collided with another vehicle, that can become more difficult to assess fault.

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#2 – How does fault affect whether a claim is chargeable?

Since fault is ultimately what determines which party will pay higher insurance rates, it is very important that you collect all of the information the claims adjuster needs.

If you are obviously not at fault for the accident, your premiums will not even be affected. If you are, however, egregiously at fault then your premiums will likely go up dramatically.

#3 – Does the percentage of fault matter?

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It might be easy to understand the difference between at-fault and not-at-fault, but many times companies will settle a claim as shared fault. It is possible for you to contribute to a loss that you were found to be not at fault for.

Any claim where you are a driver is considered to be 51 percent or more at fault is deemed to be a chargeable claim.

When there is contributory fault, you may have played a part in the cause but were not primarily responsible.

Even if it is found that you are 50 percent responsible, as long as the percentage is below 51 percent you will not be charged for the claim.

This can be reassuring to people who are sure that they did not play a part in the cause or played just a minor part when they want to file a claim.

#4 – How much will the rates go up?

If you are found to be the negligent party in a loss, how much your rates go up will depend on several different factors. An accident is only chargeable when the damages meet a state threshold or when there are injuries.

Claims for bodily injury will have a greater effect than claims for just property damage.

How much your rates will go up is based on the following factors:

Factors that Affect Premiums
Your ageYounger drivers with less experience tend to pay higher rates
Your state Averages vary greatly between states
Whether there were injuriesInjuries present will make your rates increase even more
History of accidents and ticketsA blemished driving history shows an increase risk for more problems, so your premiums will increase even more

There is no way to find out exactly how much a claim will increase your rates until it is filed, but there are studies that show averages.

For people who file just one claim, the average increase is 41 percent.

Filing two claims in one year can lead to an increase of 93 percent on average.

Losing an accident-free discount can create an even larger blow because these discounts offer as much as 20 percent off of the entire policy.

#5 – How long can the claim affect your driving record?

Whenever you apply for insurance, the company will run your accident history and your motor vehicle report to find out if you have any at-fault accidents.

Having accidents can affect your quotes and your eligibility for insurance. It is nice to know that filing a claim is not going to haunt you for life.

In most states, car accidents and reported claims will fall off of your record after three years. In some states the drop off period is after five years.

It is important that you know that some companies will ask for you to list accidents that are as far as seven years back. You must still be honest while doing this so that your quote is accurate.

You will not be charged for the loss, but may not get certain discounts based on the state eligibility rules.

Surprisingly to most, if you have an accident that results in $30,000 of property damage, you will pay the same premium surcharge as you would if the damage was only $2000.

If you had an accident and you feel like your rates are too high, now might be the time to begin shopping.

Start comparing car insurance rates now by using our FREE tool below and you can instantly find out how much you will pay through other insurers.

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