The Effect of an Insurance Claim on Your Rates
When you buy an insurance policy you must pay a fee called a premium to keep the policy active. The cost of an insurance premium depends on a variety of factors such as your insurance limits, deductibles and the risk factors you present. Making an insurance claim (an official request for compensation under the terms of an insurance policy) can increase your insurance rates.
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Auto Insurance Claims
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If you make a claim on your auto insurance policy, there is a good chance that your insurance rates will increase. Auto insurance companies tend to charge risky drivers more for insurance, and auto insurance claims indicate risky driving behavior. According to CarsDirect, auto insurance claims for moderate accidents can increase annual insurance rates by $50 or more. Some auto insurance companies offer accident forgiveness programs where your insurance rates will not go up for certain types of claims.
Homeowners Insurance Claims
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Homeowners insurance provides financial compensation for damage done to homes by events like fires and storms. Similar to auto insurance plans, the cost of homeowners insurance is determined, in part, by how risky the insurance company believes it is to insure the homeowner. If you make a claim on a homeowner's insurance policy, it can cause the insurance company to increase your rates. CNN reports that even small claims for damage like broken windows can result in premiums that are 10 to 15 percent higher.
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Health Insurance Claims
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Health insurance pays for various costs related to health care such as doctor's visits, emergency room visits, surgery and prescription drugs. Health insurance companies expect customers to use their benefits from time to time; claims for routine medical care like physicals and preventative care may not have any impact on premiums. In fact, routine medical care may reduce a patient's risk of more severe and costly medical situations. Health care premiums tend to increase each year whether you make claims or not, since insurance companies pass on the cost of all claims received to their customers.
Considerations
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Each insurance company is different and uses different criteria and formulas to calculate insurance rates. A single claim may or may not increase your insurance rates depending on the policies of your insurance company. If you are unsure how a claim will impact your insurance rates, consider contacting a customer service representative from your insurance company and ask about the company's policy on claims and rate increases.
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