Auto Insurance - How Does a Claim Affect You?
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Well, this starts with the deductible. If you are at fault in a car accident, you will have to pay the amount of excess that was agreed when you took out the policy. You will usually have to pay this to the car repairer but not always. If you were not aft fault your insurer will try to get that back from the other party and credit you. However, that might mean you have to pay the deductible and then wait for reimbursement. OK that’s the obvious bit. But then there is the whole business about determining who is at fault .
Who determines who is at fault?
If there has been a violation of the law, it is the police who will determine who is at fault. If for instance a car runs a red light and crashes into your car which happens to be stationery, waiting for the light to change; the driver who ran the light will have broken the law and will be held to be at fault under the law. His insurance will, be liable for meeting all your costs. That’s a very clear-cut case, and as everyone knows all cases are not distinct like that!
Comparative Negligence
Comparative negligence is the law that determines the percentage of blame a driver carries in case of an accident. Insurance adjusters calculate the numbers by taking many different criteria into consideration. For instance did you sound your horn on the sharp curve so other road users would know you were coming and so on? This percentage can vary from 50% upwards. This is the amount of damage your insurance company will cover and it will seek to recover the remainder form the other driver. You can challenge the decision of the Company but that will probably mean going to court.
Increase in premium
After an accident you will generally expect to pay an increase in premium. There will be exceptions like being hit by a driver with no insurance or hit and run cases, where you will lose your deductible but your overall premium will not increase. You are involved in a collision with another car, your premium has been costing you $1000 and suddenly it rises to $3000. It will remain at that figure for three years and then start reducing. Thus you might find a $10,000 accident ends up costing you $15000 over then next 6 years. OK the insurance company paid the claim but you end up re-paying the claim plus an additional 50% over the next few years. If this is the case you will be advised to look around and seek quotes from other companies in order to reduce your auto insurance costs. Sadly this can occur whether you are at fault or not simply that you made a claim, wipes out your no claims discount and you have to begin climbing the insurance ladder from scratch.
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05 June 2008, 3:09 pm
[...] ) How will a Claim Affect your Auto Insurance - Depending on the scenario, your insurance can increase. Related Posts Auto Insurance - Filing a [...]