Month: April 2014

We all worry about whether or not our insurance premium will go up if we get into an accident and have to file a claim. When you file a claim with your insurance company and they issue you a check to fix your car, the amount of the check may or may not influence your insurance premium.

Each auto insurance company has their own set of rules for when a claim may result in an increase in a customer’s premium. The amount that the insurance company has to pay on a claim factors into the rate that you will have to pay when you renew your policy. Some insurance companies have a first accident forgiveness policy, where your rates won’t go up if you have a minor accident.

Fault sometimes enters into the equation. If you are found to be the cause of an accident, it is more likely that your premium will go up than if the other driver was at fault. There is no direct link to how much your insurance premium will go up based upon the amount of the payment you receive from the insurance company to fix your car.

Whether you are at-fault, or just the unfortunate victim of another driver’s negligence, only matters if the accident winds up costing the insurance company more money to settle a claim. Both the size and the number of claims you file have an impact on how much you will have to pay for auto insurance. One small fender bender, when you have been insured with the same company for five years, will probably not affect your premium. Two major accidents in two years will be more likely to result in a higher premium.

It’s not uncommon for some drivers to own multiple cars that are covered by separate car insurance policies with different carriers. For instance, you may have a daily driver covered under one provider and an antique or classic vehicle insured under another insurance provider. In other cases, you may have purchased a second vehicle for yourself or a loved one and, for whatever reason, decided to create a separate policy with another provider for that particular vehicle.

If the above applies, the only insurance provider you have to report an accident to is the one under which your vehicle is specifically covered. Given that the other vehicle you own isn’t involved, filing a claim with the other insurance provider isn’t necessary.

Another common scenario involves switching from one provider to another. Although it’s best practice to have your new car insurance policy’s effective date coincide with the end date of your old policy to avoid gaps in coverage, the two policies may overlap. If you have an auto accident during this overlap period, you should consult with your independent agent to determine the best course of action to take.

Remember, different insurers can cover different vehicles in your household fleet, but having two active policies on the same vehicle can bring about complications in the event of a claim and even result in a denial of coverage by one or both companies, plus it may not be allowed in your state, by your insurer or both. Don’t forget that our agents are always available to help answer the tough questions and work out your car insurance issues with you.