How Will Your Car Insurance Be Affected After a Claim?
Generally, after making a claim your car insurance premiums is expected to rise. The main reason for this is that now you have become a liability for the insurance company. They have to spend a great deal of money each time you have an accident and the insurer wants to ensure that your premiums are enough to compensate for the expenses and at the same time get profit from them.
To what extent your car premiums will go up is really difficult to comprehend. One of major factors is the number of claims you have had already. If your driving record shows instances of past accidents then premiums will increase further. If the frequency of accidents is more then you are considered a driver with high risk, and you may have to pay highly for it.
Your insurance premiums are also influenced by how frequently you get involved in accidents. In case you get involved into car accidents twice in a year then your car premiums are expected to rise considerably. Regardless of which company you apply for, you premiums will be influenced in a similar manner by your driving history, though you may shop around and get a better premium deal.
The highest premiums are saved for young male drivers. Although it is a bit of a stereotype, insurance companies have done research to find the drivers that are most likely to get into an accident. Since their driving record is fairly new, young drivers are instantly more of a liability. If they get into a car accident the premiums will skyrocket until several years afterward with having a clean record.
At times, your premiums may not be very much affected. This happens only when the fault was not on your side or when you have had a really good driving record of many years. However there are some insurance companies which may still escalate your rate despite of this.
To understand how the rates are set you need to know a little about ISO symbols. ISO stands for Insurance Services Offices, Inc. and they assign every car a certain symbol or number that relates to how much the care is worth. This is what makes the insurance companies ratings fair and equal for everyone. If your ISO rating is high it means that you have an expensive vehicle and it will cost more to repair. Vehicles that cost more to repair are required to have higher premiums. If you get into an accident your premiums will go up relative to what your ISO rating is as well.
Your car insurance will not be taken away after an accident, but it may go up so high that you will have to cancel it. Don?t worry, even if you cancel your insurance after an accident the insurance will still have to cover your claim. The exact time of the accident is very important. If your accident occurred even a minute after your insurance expired, you will have to pay the damages yourself.
Now you know how much your claims influence your premium rates. You may thus find it needless to file claims for light accidents, to avoid paying higher premiums in future. It is recommended that you avoid filing a claim if the expenses are below $750 dollars. You may even avoid claiming for insurance second time if you face another accident on your driving record in one year.
Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.