How Much Will a Car Insurance Claim Increase Your Rate?

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One question I’m asked by clients when filing a car insurance claim is how much will this cost them when their policy renews? There are numerous factors that cause this to vary including the amount of the claim, who was at fault, was someone injured, did it turn into a personal injury claim, the policy holder’s claim history (other car insurance claims and their frequency), what state you live in, etc. In addition, this varies among the insurance companies, but there are some interesting statistics that give us some benchmarks.

Jim Gorzelany wrote an article that appeared in the January 27, 2015 issue of Forbes that provides some interesting statistics. Filing a single car insurance claim of $2,000 or more will result in an increase of your car insurance rate of 41% on average nationally. The five states with the harshest rate increases are:

  • California – 86%
  • Massachusetts – 83%
  • New Jersey – 69%
  • North Carolina – 58%
  • Minnesota – 52%

The five states with the least impact at renewal time are:

  • Maryland – 22%
  • Michigan – 25%
  • Montana – 27%
  • Oklahoma – 27%
  • Mississippi – 28%

Texas came in at 31st from the top spot with, or 21st from the bottom spot with an annual rate increase of 32.27%.

File a second claim and your rate increase will be 93% (national average). The two most expensive claim categories are bodily injury claims and property damage claims with an annual average rate increase of 45% and 41%. Comprehensive claims generally result in a much lower rate increase averaging nationally around 2%. That’s been quite different in north Texas after the bout of hail claims we’ve experienced over the past 3 years.

How long will these claims appear on your record varies by car insurance company. Most companies, however, are looking at a five year history when factoring claims into your rate, so it makes great sense to drive defensively! What do you think? Share your comments, questions and experiences with me on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!

Thanks!

Evie Wise
Evie Wise
#getwiseinsurance

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