It’s comforting to know that your insurance coverage is there to protect you when there’s a loss or damage to your property or vehicle. But the reality is, you need to be smart about submitting your claims – otherwise, it could have a negative effect on your coverage.
- • Your home insurance rate could increase at renewal time. If you’ve had a claim in the past or if you don’t have first-claim forgiveness, you could see an increase in your premium when your home insurance is renewed.
- • You could lose your claims-free discount. If you had no claims at the time you initially purchased your property insurance and received a no-claims discount, you could lose that discount at renewal time.
- • Other insurers may not want you as a customer – or charge a much higher rate. Let’s say you decide you want to switch to a new insurance company. If they see a number of claims in your claims history, they may refuse to insure you. Or, you might find someone to insure you but it’s going to cost you an arm and a leg to get that coverage.
There are a number of factors that could affect how much your auto insurance rate could change after a claim. For example, were you at fault and by how much? Do you have a clean driving record? Have you had any previous claims? Does your insurer offer
- • Increased auto insurance rate at renewal time. You knew this was coming…the good news is, if you’re 100% not-at-fault, your rate won’t increase (this includes
perils and comprehensive damage). If you’re 75% at fault, you may see an increase in your premium but you wouldn’t be impacted as much as you would be if you were 100% at fault.
- • Insurers could consider you to be high risk and could deny you coverage. Like we mentioned earlier with home insurance, insurers might see you as being uninsurable or charge you a lot more than if you didn’t have any claims in your history. Insurers can even deny coverage to an entire household if you have a high-risk driver in the household… even if they’re insured elsewhere and wouldn’t normally be rated on. Therefore, having a load of claims can also impact your household, not just you.
- • If someone driving your car gets a claim, it affects you as well. Remember, when you lend out your vehicle, you’re also lending out your insurance. If someone else is driving your car, gets in an accident and you have to file a claim, it’s going to affect your record and your rate – even if you had nothing to do with the incident.
Don’t worry – a single claim won’t usually brand you as a risk in the eyes of your insurer. After all, the whole reason you buy insurance is to ensure you’re protected in the event of a loss that’s beyond your ability to cover it financially. It’s the multiple claims that raise the red flag for insurers – even the small ones that you could probably cover yourself out-of-pocket.
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