The Cost of Car Insurance After a Claim

Car insurance Q&A: “I was at fault for a multi-car accident while driving just 30 mph. My insurance was $500 and now they want $1,200. That’s an almost 150% increase. Is this legal? Will everyone charge me this astronomical rate?”

Unfortunately, it’s not illegal. Every “admitted” insurer in every state has to file their “rates” with the corresponding state department of insurance and obtain approval for them.

Once approved by the state, anything you are charged is technically legal.

Was It Just Your Claim?

Every insurance claim is different. While you’re focusing on the “type” of accident and its effect on your insurance premium, there are other factors you might need to consider (if they apply to you).

Do you have any other claims or moving violations on your record? If so, this would certainly add fuel to your premium increase fire, which is undoubtedly on the high-end of increases.

Has your credit changed since your policy began? In some cases, if an insurance score declines, the insurer will increase the premium accordingly at renewal.

Finally, it could just be the type of insurer you are with.

If you have great credit and no previous “infractions” you were likely insured by a “preferred” auto insurance company (State Farm, Allstate, Hartford).

These types of auto insurers offer fantastic premiums to those of us who fit that profile.

The downside is you are “kicked out of the club” if you no longer fit the “preferred risk type,” i.e. have an accident or get a ticket of two.

What To Do?

It’s recommended that you obtain insurance quotes online from multiple carriers.

There are other “types” of insurers who are perfectly comfortable insuring an individual with a ticket and or accident.

As you can see by the lack of empathy demonstrated by your current insurer, loyalty to any one particular insurer may not be the best route to take.

(10 ways to lower your car insurance premium.)

You should actively shop your insurance about every 2-3 years, regardless of your driving history, as they all adjust their rates constantly.

You may also want to visit a local independent insurance agent (one who represents several companies) to have them personally consult you.

Read more: How much does insurance go up after an accident?