UPDATED: SEPTEMBER 22, 2023 | 3 MIN READ
Wondering how hard it is to get auto insurance with a previous claim? The good news is. It’s not too difficult.
The bad news is. Your insurance will probably cost more than it did before you filed a claim.
Let’s look at what happens when you file a claim, how to get new insurance after you’ve had a claim, and how much it could end up costing.
What should I consider when searching for auto insurance with a previous claim?
Here are some things to consider when searching for auto insurance with a previous claim:
- The type of claim you filed. Some insurance companies are more lenient with certain types of claims, such as comprehensive claims (which cover damage from things like hail or theft), than they are with collision claims (which cover damage from accidents).
- The severity of the claim. A minor fender bender is likely to impact your insurance rates less than a major accident with injuries.
- Your driving record. If you have a clean driving record aside from the previous claim, you’re more likely to get a better rate than if you have a history of accidents or traffic violations.
- The insurance company’s policy on previous claims. Some insurance companies have a specific number of claims they’ll allow before they increase your rates or decline to renew your policy.
- Your budget. Be prepared to pay more for car insurance if you have a previous claim. However, there are still some affordable options available.
Should you reveal your claims history?
The short answer is yes. Being upfront about previous claims is important because any experienced insurance officer will discover the truth.
When your vehicle is involved in an accident or is dealt with damage that’s being partially paid for by an insurance company, there will be a temporary mark on your automobile’s permanent record. Some insurance companies pride themselves on catering to “no claim” members who are extremely low-risk.
If your current insurance plan is provided by one of these elite “no claim” carriers, your premium will go up, and it would be wise to switch or begin to shop around.
Was this your first claim in the last five years? If so, you may be in the clear after all. While you may not receive an accident-free bonus yearly, your monthly premium shouldn’t double. Most insurance companies are scanning the last three to five years of your auto history because older claims will often drop off your record.
Does your car have existing damage?
Suppose you were in an accident and are planning to keep the insurance claim payout money without performing any necessary or recommended repairs. In that case, you shouldn’t expect a new car insurance company to take on that liability.
Finding a new insurance policy that will back-cover damage caused by a recent burglary or collision is nearly impossible if your car has existing damage. Many well-known insurance companies won’t even offer physical insurance on a car that carries extensive existing damage.
While you may not be able to purchase what is considered full coverage insurance, liability insurance which is a requirement to drive, is always available.
Is your claim an “at fault” violation?
Most car accidents that end with an insurance claim being filed have a defined party at fault. A party at fault could end up being the driver who rear-ended another car, a negligent owner, or even a vandal facing criminal charges.
If you’re determined to be the party at fault at the end of the insurance company’s investigation, you should expect your premium to increase more than if your vehicle was just an innocent bystander.
If, by some chance, you were determined to be the party at fault but believe that you aren’t, writing a letter or making a call to your agent should be at the top of your priority list.
Claims caused by a reckless driver or even a third party who ended up with a DUI are likely expunged from your auto record but may require a handwritten letter or email documenting the incident.
Like claim’s caused by third parties, if the previous damage to your vehicle resulted from a medical event such as a seizure or lapse in consciousness, you might be able to have the strike erased, assuming you sought the appropriate medical treatment.
What kind of insurance coverage is best if you have prior auto claims?
The decision to purchase strictly liability or full coverage auto insurance can often be financially influenced. As mentioned above, liability insurance is the minimum auto insurance required to own and operate a vehicle in the United States.
Owning liability insurance means that any damage caused by you while you’re driving your insured vehicle will be covered up to a claimed maximum after your deductible is surpassed.
For example, let’s consider a driver who crashes into a fence and causes $10,000 worth of damage to the owner of the fence’s property. If that driver’s deductible is $1,000, the insurance company will cover the remaining $9,000 in damage.
If the driver in question possessed fully covered auto insurance, the damage to their vehicle and the damage to the third-party property would be covered in full minus the deductible.
So why are we comparing liability insurance and full coverage insurance? If you have an existing claim or two on your driving record, liability insurance will be remarkably cheaper, possibly even half the price.
Depending on the vintage and value of the vehicle you’re currently driving, it may be worth considering downgrading to liability insurance if the monthly recurring premium costs are too expensive to justify.
Is switching insurance companies the best option?
If you notice that your insurance premium has been increased due to a recent claim, it may be wise to shop around for alternative options.
If this is your first claim, the increase may not be very noticeable. Still, studies have shown changing insurance companies every few years only benefits the insured by creating healthy competition among insurance providers.
How to save on an auto insurance policy with previous claims
In conclusion, finding auto insurance with an existing claim can make the process more difficult and expensive. But don’t immediately agree to the first exorbitant monthly premium price that you’re offered; there may be better options out there.
You can also try these techniques to save:
- Get Liability Coverage Only: Skip comprehensive coverage and stick to a liability policy to reduce your risk to insurance companies.
- Compare Quotes After A Claim: Some companies don’t want drivers with any claims, while others are willing to give you a break. Your best bet is to compare quotes to see who can offer you the best rate.
- Get a Shorter Policy: As time passes, old claims will fall off your record. If you’re stuck with a high insurance premium, try a 6-month policy instead of a 1-year one. You can compare quotes again to try for a lower rate.
Is it possible to backdate car insurance?
No, it isn’t possible to backdate car insurance, and attempting to do so can be considered fraudulent.
Can an insurance company cancel your policy with an open claim?
Yes, an insurance company can cancel your policy even if there’s an open claim, but the reasons for cancellation are typically unrelated to the claim itself.
If your policy is cancelled while there’s an open claim, the insurance company is still generally obligated to handle and process the claim under the terms that were in effect when the incident occurred.
How many claims can you have before car insurance cancels?
The number of claims you can file before your car insurance cancels you varies by insurer and the circumstances surrounding the claims. There isn’t a universal number that applies across all insurance companies. However, filing multiple claims in a short period or claims that indicate high-risk behavior can increase the likelihood of either a premium increase or policy cancellation.
Find car insurance coverage today
Ultimately, you want to feel safe and properly insured when driving around; a previous claim shouldn’t get in your way. Compare premiums in your area for auto insurance with a previous claim.