Do car insurance rates rise after you file a claim?

You can expect your car insurance rates to rise after you file a claim. Car insurance companies are for-profit businesses. When you file an insurance claim, you are costing your provider money, which increases your level of risk to that company. Auto insurance rates rise after you file a claim to compensate for your increased level of risk to the auto insurance company. Shop around for cheaper rates after you file a claim with our free comparison tool below.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 29, 2020

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When you need to file a car insurance claim its common to be concerned about car insurance rates rising however the answer is not as simple as a yes or no.

If you are switching car insurance companies or simply looking for a new car insurance policy your history of filing claims can have a very negative effect depending on the type of claims filed before. A broken windshield will almost have no affect whereas filing for vehicle loss due to auto theft certainly may.

Any new application for car insurance usually comes with the car insurance company asking a series of questions and one of them is about any claims filed in the previous three or five years. Your answer to this question helps a potential car insurer to assess the risk of insuring you and if the answer is yes you may be ineligible for certain discounts or possibly even be denied coverage.

For example, the good driver discount is the largest discount offered by most car insurance companies and requires applicants to have no previous accidents or tickets in the last 3 or 5 years. Even if an accident was not your fault the mere filing a claim against an insurance policy within this time frame can classify you as ineligible for the good driver discount.

Should you file a claim?

A lot of drivers try to find balance for smaller claims. If the amount of damage is less than your deductible it can sound like a good idea not to file anything unless you feel there is possibly litigation pending. It’s a difficult decision for many as here you are paying your premiums and then afraid to make a $500 claim due to possible rate increases. No one can advise whether or not to file for a minor accident but any type of serious accident you really should use the car insurance coverage you purchased. Not only does it make financial sense but depending on the circumstances and the particular car insurance company your rates may not increase as much as you think. Always inquire about single accident forgiveness or contact your car insurance company direct and inquire about what types of claims will affect your premiums when your policy is up for renewal.

Never Lie

If you ever lie on any type of insurance application and the insurance company finds out (which they almost always do) any request for coverage can be denied and the policy cancelled. You will also have a very tough time getting any kind of affordable car insurance in the near future since you had a policy cancelled which is one of the factors which automatically puts you in the high risk category by almost all car insurance companies.

How to file a car insurance claim?

Filing a claim is pretty easy but there are many things you should know about gathering the right information and most of the details will depend on your memory of the accident. Read our article on how to file a car insurance claim here – you will be surprised how many times people fail to gather the right information at a car accident scene.

Most car insurance companies offer a toll free number or online form to submit your claim but no matter how you submit the information its always best to speak with a live representative of the company before submitting any kind of formal paperwork. Many claims handling departments are very helpful in asking you questions to help extract the most out of your policy coverage.

Remember that car insurance is financial protection in the case of an accident and you should never be afraid to file a claim however it is important to weigh the benefit of filing vs. the potential rise to your auto insurance rates.

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