Will Insurance Costs Increase After Filing a Car Accident Claim?

After a vehicle accident occurs and you file an insurance claim, you are probably like the rest of us, holding your breath and hoping the insurance carrier does not raise your premiums. Unfortunately, it is not uncommon for insurance carriers to raise the overall cost of your policy, even if you did not cause the collision. If you’ve been in a collision, a car accident lawyer in Houston may be able to help.

Why Would Rates Increase After a Collision

There are various reasons why insurance costs would increase after reporting a vehicle accident. The reality is that any person who has been in an accident is considered riskier than individuals who have not been in an accident.

Insurance carriers can even raise premiums on individuals who were not at fault for an incident, though many carriers decline to do so. In fact, insurance carriers make it a point to mention that they will not raise premiums if an accident was not your fault, and some even have accident forgiveness programs that do not result in raised rates for situations where a person gets into their first accident, even if they are at-fault.

Is there any rule prohibiting insurance carriers from raising rates?

In Texas, insurance companies can increase your rates at any time. Often, these rates do increase after a collision, regardless of who caused the incident.

Insurance carriers are much more likely to increase your premiums if you have a history of making claims. This does not necessarily have to be claims where you were at fault for the incident. This could include claims related to even minor property damage, such as repairing a windshield. Insurance carriers will know about your past accident history through what is known as the Comprehensive Loss Underwriting Exchange (CLUE) report. This report has your entire claims history, and most insurance carriers use this system. Even if you have filed previous claims with other insurance carriers, your current insurance carrier will likely know about your history.

Can You Avoid Filing a Claim?

It may be examining whether or not you need to file an insurance claim at all but keep in mind that it is generally going to be less costly to file a claim and receive compensation from the insurance carrier than it would be to deal with any increase in your insurance premiums.

Before you file a claim, figure out how much you are responsible for upfront through your deductible. The insurance carrier subtracts the amount of your deductible from the claim payment. We also encourage you to get multiple repair estimates. If the cost of repairs is around the same as your deductible, it may not be worth filing a claim.

What to Do if Your Rates Increase

If your rates increase after making a claim, you have a few options. First, we encourage you to contact your insurance carrier to see if you are using all of the available discounts they have. Often, there are discounts for taking driver training courses, driver’s education discounts, and even discounts for good grades (for high school and college students).

In the event you make no headway with your current insurance carrier concerning rising costs, you should start shopping around for better rates. Each insurance carrier is likely to offer slightly different rates, so take a few hours to obtain quotes from the major insurance players. Insurance carriers may be able to raise your rates at any time, but you are free to change insurance carriers at any time as well.