Car insurance is designed to protect you financially if you cause a wreck or sustain some other kind of damage to your car. While this is the purpose of car insurance, you may not want to file a claim on every type of damage because of the potential increase to your rates.
After you are in an accident, your car insurance rates could increase. This is because of statistical evidence that points to multiple claims being filed by a person who causes an accident. Even though you might think that it was a freak accident, the insurance company will now lump you into a category of drivers that have caused accidents. The insurance company has to increase the premiums to cover the risk that comes with insuring this group of drivers.
Amount of Increase
The amount that your insurance will go up after one accident can vary significantly from one insurance company to the next. Some companies put more weight in this factor than others do. The Insurance Services Office recommends increasing a premium somewhere between 20 percent and 40 percent after a wreck. If you have State Farm insurance, you might expect your insurance to go up by about 10 percent after you have a wreck. Some other companies might charge you close to 30 percent more for your premiums.
Your auto insurance may have some other coverages besides comprehensive. Comprehensive coverage protects your vehicle against damage that is not sustained from a wreck. For example, if hail damages your car, the comprehensive portion of your policy will pay benefits. When you file this type of claim, it may or may not raise your insurance premiums. Whether it raises your rates depends on state law and the insurance company. In some cases, the insurance company bases rate increases on whether the damage was an "act of God" or if it could have been prevented.
When your car is damaged in some way, you should consider whether it is worth it to even turn in a claim. For example, if you are in a small fender bender and the damage is insignificant, you may not want to turn in a claim. By the time you pay your deductible and pay for the extra rate increases in your premiums from that point forward, the financial benefit that you get from the claim may be insufficient.