UPDATED: APRIL 27, 2023 | 1 MIN READ
Prior claims will undoubtedly affect the cost of your auto insurance premium, but it doesn’t have to be the end of the world.
To think that you will altogether avoid a monthly premium cost hike after filing a claim is unrealistic. Still, a correct way to approach the situation can benefit you and ease the pain in your bank account.
When recovering from an auto claim, you should first consider how you can minimize an inevitable increase and prove to your insurance company that you’re a trustworthy driver.
Whether that means sitting down and meeting with your insurance agent, proving you’re innocent of an accident, or reducing your level of coverage, the worst thing you can do after a claim is sit around while your rates skyrocket!
Below you’ll find tips and tricks of the trade that you can employ in your situation.
What should I consider when searching for auto insurance with a previous claim?
- Let’s talk about claim history
- Does your car have existing damage?
- Details of the claim, including who is at fault
- Liability vs. Full Coverage Insurance
- Should you switch insurance companies?
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. Don’t fear; there is relief in sight!
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 will not 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 on the table. We’ll discuss the difference between full coverage and liability insurance later in this article, so stay tuned!
Is Your Claim An “At Fault” Violation?
Most car accidents that end in 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 vandal facing criminal charges.
If you are 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 are not, 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 resulting 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 are 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 are 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.
If you have become attached to your current insurance company or agent, it may not feel great to shop behind their back! Cruising the market doesn’t always have to be to change companies.
If you have a great relationship with your current agent, it may be worth scheduling a phone call to discuss some new offers you have received to ensure your competitive price!
In many cases, insurance agents only hear from a small percentage of their clients, be one of the few who is heard from once or twice a year.
Once your agent starts to put a face or voice to your name, you will quickly become one of their more valued clients.
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 are offered; there may be better options out there!
Find an agent willing to hear your story and review your previous driving record without the negative connotation a recent claim can carry.
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.
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.
