Making an auto insurance claim can be a daunting experience, especially when considering the potential impact on premium rates. A recent study has revealed that just one $2,000 claim could result in a significant 41 percent increase in premiums, costing an average of $370 annually. This spike in rates could linger for several years, making it a costly consequence for policyholders.
Interestingly, the study found that the state you reside in can greatly influence how much your premiums will rise after a claim. California tops the list with an 86-percent increase, followed closely by Massachusetts at 83 percent. New Jersey, North Carolina, and Minnesota round out the top five states with the highest premium hikes. On the contrary, Maryland, Michigan, Montana, Oklahoma, and Mississippi were among the states where premiums increased by the smallest percentage after a claim.
One of the key factors contributing to the disparity in premium hikes among states is how they handle bodily injury claims. While the average property damage claim costs $3,231, the average bodily injury claim amounts to $15,443. This significant difference in claim amounts plays a crucial role in determining the extent to which premiums will be raised.
Despite some insurers claiming that rates won’t increase after a first claim, the study’s results suggest otherwise. While certain claims, such as vehicle theft, may have minimal impact on premiums, the overall trend indicates a rise in rates following a claim. Many major insurers now offer accident forgiveness policies, which may help mitigate the increase in premiums. However, obtaining such coverage typically comes with a ten percent or higher premium cost.
The study used data from six major carriers across all 50 states, analyzing the profile of a 45-year-old married female driver with a 2012 sedan, B.A. college education, and no lapse in coverage or previous claims. This standardized profile allowed for a comprehensive comparison of premium hikes across different states.
In conclusion, the study highlights the significant impact that making an auto insurance claim can have on premium rates. Policyholders should carefully consider the potential consequences before filing a claim and explore options such as accident forgiveness coverage to mitigate the increase in premiums. By staying informed and proactive, drivers can make informed decisions to protect their finances and ensure they are adequately covered in case of an accident.
