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Are you worried that your car insurance is going to be cancelled because you recently filed a claim? If you are like most people, you have probably heard plenty of horror stories from people who had their policies canceled after filing a claim with their insurance companies. While it is certainly a possibility that your insurance will be canceled after you file a claim, it is not a given. In fact, you more than likely have nothing to worry about.
What About the Cost of My Premiums?
Although you most likely will not lose your home when you file an insurance claim, you probably will notice an increase in your insurance premium if you caused an accident to occur. This is because researchers have shown that people who are involved in car accidents are more likely to be involved in car accidents again in the future. Therefore, since you are more likely to get into an accident again in the future, you are a higher-risk driver.
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How are My New Rates Determined?
Each insurance company has its own methods for calculating new insurance premium rates. Some have an algorithm that they use to calculate the rates, while others simply have a points system that they use to determine what your new rates to be. Yet other companies will automatically raise your rates by a certain percentage. Since each company has its own method for determining rates, it is difficult to say how much your rates will go up after filing a claim.
Is There a Risk of Getting Canceled?
If you file a claim with your car insurance company, you usually don’t have to worry about cancellation after just one claim. If your claim results in an unusually large loss and you did something that was grossly negligent to cause the loss, one claim may be enough to get you canceled by your insurance company. Otherwise, it generally takes multiple claims within a short period of time to get your policy canceled.
Of course, the easiest way to avoid a cancelled policy is to drive safely. If you are not found to be at fault for the accidents, you will not need to worry about having your policy canceled or even about having your premium rates increased. If you do experience a rate increase, however, be certain to do some comparison shopping. Even with your recent troubles, you may be able to find a company that will give you a better rate than your current company.