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Will Your Premium Go Up If You File A Claim?

Written by Todd Clay. Posted in Research Last Updated: 12/19/2009

Important Things To Consider Before Filing A Claim

Will you have to fork over more of these if you file a claim?

Will you have to fork over more of these if you file a claim?

So you’ve had an accident and you may need to file a claim? But you’re worried about the effects on your next renewal. Will your insurance go up or will it stay the same?

It’s a no-brainer if your premium stays the same – file the claim. But if your rates go up, isn’t that where the insurance company gets their money back? I know what you’re thinking because I ask myself the same questions.

Here are some things to think about before you make that fateful call.

Your Insurance May Go Up

As usual, each claim situation is different. The first question to ask is ‘who’s at fault?’ If you’re not at-fault, you should not be surcharged for the incident. However, companies often use claims history in their renewal calculation. Even though there’s no surcharge, there could be a hidden increase. Rating is a complicated matter and many factors play a part.

However, if you are at-fault in the accident, there’s a good chance there will be a surcharge on your next renewal – probably extending for several renewals thereafter. It’s not so much a case of the insurance company getting their money back, but more of a “friendly” reminder from your insurer that you should drive safer.

Severity Determines The Consequences

The severity of the at-fault incident determines the severity of the consequences. If you are partially at-fault for an incident, there may not be a surcharge for the event. Each insurance company is different, so that’s not a guarantee. However, if the incident is serious enough (Example: Driving drunk, causing an accident, and inflicting injuries on another person) it’s possible your policy will be non-renewed. That translates to exorbitant rates when you get a new policy.

Another thing to consider is losing accident-free discounts. If you’re currently enjoying a discount because you have not had an accident, then a claim may remove that discount. You should be able to see that discount on your policy. Claims can affect that discount and how much you pay on your next renewal.

Call Your Insurance Company

Regardless of the severity of the incident or who’s at fault, you should report all incidents to your insurance company. Accidents can get complicated very quickly. If you fail to report an incident and the other party decides to sue months later, you could have more problems. Your insurance company may question why it took so long for you to report the incident. They may even non-renew your policy.

Play it safe. If you have an accident, call your insurer or agent. If they recommend it, file a claim. After all, that’s why you bought car insurance.

Auto Insurance Quotes

Written by Todd Clay. Posted in Research Last Updated: 04/10/2012

Five things you need to know about getting a car insurance quote online.

Five Things To Know When Getting Auto Insurance Quotes Online

5 Things To Know for Online Insurance Quotes

Getting quotes for auto insurance is not difficult. However, shopping for car insurance is not usually a top priority for most of us. But when looking to trim down your monthly expenses, it’s worth the time to get some insurance quotes. Consider it an investment. In the right situation, you could save a $150 or more every month on your car insurance.

Here are five things to know when getting quotes on your auto insurance.

#1 – Insurance Companies Want To Help

Insurance companies want more business. One of the major ways insurers make money is by adding policies from new households. That’s why most major companies make it easy to get quotes from new prospects on the internet. When I shopped my policy, Progressive was the easiest website to use to get an online quote. It makes sense – if insurance companies want your business, they shouldn’t put up roadblocks (read: a bad website) to make that happen. That’s why most companies make it easy for potential customers to get online quotes.

#2 – All Insurers Are NOT Created Equal

Just like all restaurants don’t please all customers, it’s the same way with insurance companies. An insurer is only as good as the promise they keep. If you discover several customers from a particular company have had negative experiences, it may be good to look at other insurance companies. To look at customer reviews, check out these insurance companies’ Customer Reviews

#3 – Price (Premium) Varies with Different Carriers

Get quotes from multiple insurers and you’ll quickly discover not all companies’ policies are priced the same. There’s a reason. Actuaries at different companies determine the potential risk for each new customer and thus the price. Because actuaries disagree and companies determine what risk they want to underwrite at a particular time, each company charges a different price (premium) for their policy. It’s important to compare the same coverage, but even then, you will notice price discrepancies between insurers.

#4 – Get Multiple Quotes

If you’re interested in saving money, get several quotes from insurers. Prices vary and you’ll never know how much you could be saving without a few prices. Typically, we recommend getting 3-5 quotes for a new policy or policies. You can even call your current insurer to see what they could do to lower your premiums.

#5 – Invest the Time Now So You Don’t’ Pay Later

When my wife and I were reviewing expenses in 2008, we decided to review our car insurance policies. After shopping around, we ended up saving around $50 a month for two late model vehicles. It’s been a year since we got the new policy. Since then, we’ve saved $600 with our new policies. That’s why I recommend taking an hour or so now to get some auto quotes. It’s definitely worth the money you save.

To get quotes from several companies, go here: Multiple Online Auto Insurance Quotes

What Happens if You Cancel Your Auto Insurance?

Written by Todd Clay. Posted in Research Last Updated: 09/18/2010

Consequences for canceling your car insurance – and not renewing.

If you’re still driving, canceling your car insurance can be a serious matter. Should you decide to drop coverage and NOT find a new policy, there are consequences to consider.

Not only do you have to worry about state laws and cancellation fees with your insurance company, but you should also think about how it will affect your next auto policy.

Canceling Car Insurance Against The Law?

Technically, the act of canceling your auto insurance is not against the law. However, most states require you to be listed as a driver on a policy if you are licensed and driving a car. At this time (Sept 2009), only Wisconsin and New Hampshire do not require drivers to carry liability insurance. Every other state does.

Let’s say you cancel your policy and decide not to get a new policy. You’re not listed on anyone’s policy so you’re driving uninsured. If you’re caught, penalties vary from state-to-state. Fines range from $100-1000+. In some cases, your driver’s license can be suspended and your car could be impounded. In other words, you risk legal fees, fines, penalties, and a potential suspended license for not carrying auto insurance.

In addition, if you have an accident without insurance things can get ugly. Depending on the severity of the incident and who’s at fault, you could be sued for damages. Potential losses could be in the hundreds of thousands of dollars or more. Bottom line, it’s not worth it – you should always maintain coverage if you drive.

Getting Insurance After Not Being Covered

So let’s say you’ve been driving uninsured and you decide to get another policy. At that point, you’ve been driving for over 30 days without insurance. Each insurance company decides what to do. Most likely, you would not qualify for preferred rates. Insurance companies will often give you non-standard or high-risk rates. Some companies won’t even write a policy without continuous coverage.

If you can get coverage after being uninsured, you’re likely to pay twice as much (or more) to get a non-standard policy. That’s yet another reason to keep your auto insurance if you’re driving a car.

One more thing: even if you don’t own a car, you should be listed as a driver on a policy in your household. If you have accident in the insured vehicle, the company could deny the claim if you live in the household. However, if you don’t own a car but are still driving, you can get a “named non-owner” liability policy. Non-owner policies are more affordable than regular liability policies. Getting a non-owner policy is an affordable way to maintain continuous coverage.

Switching Insurance Agents

Written by Todd Clay. Posted in Research Last Updated: 09/07/2009

Three Steps To Switching Agents & Reasons Why You Should

How to switch insurance agents.

How to switch insurance agents.

What happens when you’re ready to switch insurance agents? If something happens at your local insurance office and you’re no longer comfortable dealing with the same people, it may be time to look somewhere else.

Many companies still use the agency-model for selling and servicing policies. State Farm, Allstate, Nationwide, & Farmers are major auto insurers that still use local agents. That means if you want to get insurance from these companies, you are usually dealing with a local agent. There are now exceptions to that rule, but that’s still the norm.

Reasons to Switch Agents

There are a couple of good reasons you might want to look for another agent. For one, you have a bad experience with the agency. For instance, the agency staff may speak to you in condescending tones any time you have a problem. Or it may take awhile for you to get new insurance cards if you lose them.

Bad service on a consistent basis is a good reason to leave your current insurance agent. Agents are paid a commission on every policy they sell and service. If your agent doesn’t respect the person who pays their bills (you), it’s probably time to take your business elsewhere.

Another reason to switch agents is after a move. If you’ve moved out-of-state, state insurance laws usually require you to update your policy within 30-days after relocating. Contact a local agent in your new town, preferably one close to your home or place of business. You may also want to get quotes from other companies – auto insurance prices vary state-to-state and your current insurer may be higher in your new state.

In-State moves are different. If you move somewhere else in the same state, you can usually keep your same insurance agent. However, many people like the convenience factor of a local agency. If you like having someone close-by, then contact a local agency and initiate the process.

Three Steps To Switching Insurance Agents

It’s easy to switch insurance agents while staying with the same insurance company. If you’re ready to switch agents or transfer your policies, there are three steps to follow…

1) Contact Your Current Insurance Agency

I know this may be an uncomfortable step, especially if it’s a bad service issue. But your current agent should know why you want to leave. Other agencies sometimes encourage customers to leave their current agencies – and you want to reassure them that is not the case.

You can contact your current agent by phone or email. After you let them know, ask them what you need to do to transfer your policies to another agent. They may want to discuss it – that’s why it may be easier to just send an email.

2) Contact Your New Insurance Agency

As you might imagine, your current agent is usually not in a hurry to release your policies – especially if it’s for a bad service issue. That’s why you should contact your new insurance agency on the same day. That way you have two parties involved in the process. If your current agent doesn’t handle it, your new agent will usually make it happen.

3) Check On the Progress

The last thing you want to do is check on the transfer. Companies vary on how long it takes to transfer policies – from a few days to a few weeks. But it should not take longer than a month. Contact your new agent after a few weeks just to make sure it’s complete. If it’s finished, it may be a good time for a quick review to make sure everything is in order.

Will A ‘Hit and Run’ Raise Your Rates?

Written by Todd Clay. Posted in Research Last Updated: 08/18/2012

How a Hit and Run Incident Affects Your Auto Insurance – You Might Be Surprised

What Happens To Rates After a 'Hit and Run'?

A ‘Hit and Run’ Can Affect Rates.

Unfortunately, ‘Hit and Run’ accidents are a fact of life on the road. Hit and Run incidents are car accidents where one or more parties fails to stop, provide information, and render aid when necessary. In other words, if you have an accident with another vehicle and drive off – even if the other car was parked – you were involved in a Hit and Run accident.

There are many Hit and Run incidents every year on US highways. According the National Highway Traffic Safety Administration (NHTSA) in 2003-2006, one in eight accidents were Hit and Run. It’s estimated there are over 700,000 Hit and Run incidents every year in the United States. If you haven’t been involved in one yet, chances are you will be in one in your lifetime.

There are two parties in a Hit and Run accident: the person “hitting and running” and the other driver and/or car. Hit and Run accident affects both party’s auto insurance rates differently.

Rates For the Person “Hitting & Running”

If you caused an accident and drove away, you are responsible for a hit and run – even if the other vehicle was unoccupied. If the accident is ever traced back to you, then your insurance could charge you with an at-fault incident. This will probably be a surcharged incident which would result in higher premiums.

Hit and Run incidents are more serious than regular at-fault accidents. It could stay on your driving record for 5-7 years, depending on your state. If your insurance company discovers it’s a Hit and Run, they may also cancel your coverage. This would mean even higher premiums at your next carrier.

Every driver should know a driver’s responsibility in any accident – stop your car at a nearby, safe place, check on the other driver, and give them your information. If you drive off, you could be in more trouble than just rising insurance rates. If the victim is injured or dies as a result of the accident, police will investigate. If you’re guilty of a Hit and Run traffic death, the courts could find you guilty of felony manslaughter. You should contact an attorney in that situation.

Bottom line: if you’re involved in an accident, do the right thing. Stop, provide your information to the other driver, and render aid when necessary – regardless of who’s at fault.

Rates for the Victim of a Hit and Run

If you are the victim of a Hit and Run incident, your rates should be unaffected. Hit and Run accidents are common and insurance companies usually do not fault the other driver for the incident.

However, whether the incident will be covered is a different question. There are two coverages that would cover a Hit and Run: Uninsured/Underinsured Motorist (UM) and Collision. Insurance companies offer Uninsured Motorist coverage for times like these. Hit and Run incidents are covered minus your deductible in most cases. If you do not carry UM, then your Collision coverage should pick up the tab – minus your deductible. That’s one of the reasons you should carry UM or Collision at all times.

The particular coverage that would be used to cover your damages from a hit and run accident all depends on the state that you live in and also your insurance company you have coverage with.  For example, in the state of Washington a hit and run accident is covered under the UM coverage and you are required to file a police report. If the driver that hit you is identified the damage is still covered under the UM coverage, but you are subject to a lower deductible than you would be if the other driver was never identified. In the state of Idaho some carriers do not even sell UM coverage and all hit and run accidents are covered under the collision coverage.

Regardless, if you’re involved in a Hit and Run, contact your insurance company. They will provide the best advice for handling your claim. Depending on the severity of the situation, they could also provide legal counsel.

If you have experience with a Hit and Run accident, feel free to leave a comment.

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