Will Filing a Claim Increase Your Insurance Rates?

10/22/2020 (Permalink)

Filing an insurance claim can raise your rates. You thus should limit the number of claims you file each year. However, you should not hesitate to file a claim if your car or home suffers severe damage.

What Are Insurance Claims?

Insurance is designed to protect you financially if you suffer a loss or emergency. You pay your insurance provider at regular intervals. In exchange, the insurer promises to pay disaster-related expenses. There are several different types of insurance, including:

• Car insurance
  
• Home insurance
  
• Life insurance
  
  

Whenever you suffer a loss, you can file a claim with your insurance company. The insurer will then accept or reject your claim. If the insurance claim is accepted, you will receive a check from your provider. You can use this money to pay for things such as car repairs or water damage restoration services.

When Do Insurance Rates Increase?
However, once you get your money from the insurer, the process is not over. The insurance provider will look more closely at the cause of the damage to your car or home. If the insurer concludes that the damage was your fault, you may have to pay higher premiums in the future.
There are other factors at play, as well. If you have filed a lot of previous claims, your rates could soon increase. Insurers also look at mitigating circumstances such as your credit score and the number of natural disasters in Smith Village, OK.
The best thing to do is to read your policy and figure out if your rates will increase when you file a claim. Ideally, you should do this before your next accident or home flood. In general, experts suggest paying for minor repairs yourself and using your insurance for catastrophic incidents.
An insurance claim can save you a lot of money if you get into a car accident, or if a natural disaster causes damage to your home. However, filing too many claims can cause your rates to increase. You should thus limit your claims to the most severe losses.