Affects Of A Claim On Your Car Insurance Premiums

Written By: Tom Martens on March 28, 2010 No Comment

After a claim you can normally expect your car insurance premiums to go up. This is because you have become more of a liability to the insurance company. They lose a lot of money every time you get into an accident, and they want to make sure that your payments are enough to cover those bills and profit from.

It is difficult to anticipate to what extent your car insurance premiums will be influenced. This also depends on how many total claims you have had already. If the insurer finds that you already have had an accident earlier then your premiums will increase more. If they find that you had numerous accidents and are a risky driver and you may expect to have to pay much higher premiums.

Your insurance premiums are also influenced by how frequently you get involved in accidents. In case you get involved into car accidents twice in a year then your car premiums are expected to rise considerably. Regardless of which company you apply for, you premiums will be influenced in a similar manner by your driving history, though you may shop around and get a better premium deal.

The highest premiums are saved for young male drivers. Although it is a bit of a stereotype, insurance companies have done research to find the drivers that are most likely to get into an accident. Since their driving record is fairly new, young drivers are instantly more of a liability. If they get into a car accident the premiums will skyrocket until several years afterward with having a clean record.

However, there are some instances when your premiums may not be so affected, mainly if the accident was not due to your fault or if you have had a solid past driving record. Obviously, there are some insurance companies which will anyways increase your premiums, even if the accident wasn?t caused by your mistake.

To understand how the rates are set you need to know a little about ISO symbols. ISO stands for Insurance Services Offices, Inc. and they assign every car a certain symbol or number that relates to how much the care is worth. This is what makes the insurance companies ratings fair and equal for everyone. If your ISO rating is high it means that you have an expensive vehicle and it will cost more to repair. Vehicles that cost more to repair are required to have higher premiums. If you get into an accident your premiums will go up relative to what your ISO rating is as well.

Your car insurance will of course not be cancelled after accident, but it may increase so much that you may have to terminate it. Even though you call off your insurance after an accident, you will receive the full coverage of your claim. Remember that the accurate time of accident is extremely essential. If the accident took place even after a minute of the expiry of your plan, your claim will become void and you?ll have to bear the costs yourself.

Now you know how much your claims influence your premium rates. You may thus find it needless to file claims for light accidents, to avoid paying higher premiums in future. It is recommended that you avoid filing a claim if the expenses are below $750 dollars. You may even avoid claiming for insurance second time if you face another accident on your driving record in one year.

Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car insurance portal.