Getting car insurance is a legal requirement, and it will give you financial protection in the event of an insured risk. You are eligible to file a claim on your policy when such events occur. That said, you want to carefully consider a few things before making multiple insurance claims.
While there is no limit or restriction to the number of car insurance claims you can make in a policy year, making multiple claims may have some ramifications as follows.
Higher Premiums
To a car insurance provider, more filed claims suggest a greater risk, which translates to higher premiums. Make multiple claims, and it should come as no surprise when the insurer adjusts your premium upwards the next time you are looking to renew your policy.
Remember that you qualify for a no-claim bonus (NCB) if you don't make any claims on your policy. The more the number of claims you make, the more your bonus reduces, raising your premiums.
Policy Non-Renewal
Your car insurance provider may choose not to renew your policy for any one or more of several reasons. Filing too many times is one of these reasons, and even more so if these claims are tied to reckless driving behavior.
Again, the insurer may drop you regardless of who is at fault when you are involved in too many accidents. Why? It makes no business sense for the car insurance company when what they are paying out to you to cover damages is more than the amount the company is getting from your premiums.
Avoiding the Penalties
As highlighted, the ramifications of making multiple claims on your car insurance policy are quite significant. The good news is that you can avoid these penalties in two main ways.
Drive Carefully
Exercise caution every time you are out on the road driving. Avoid using your phone or anything else that can distract you while driving. Ensure you park in the garage or any other secure spot when not driving.
Know When to Pay Out of Pocket
Looking at the penalties, it may make sense to sometimes pay for damages out of pocket. If the repair amount is less than the deductible amount on your car insurance policy, then it is better for your claims history to simply pay for the repairs yourself. Also, it makes more sense to pay out of pocket where the no-claim bonus is lower than the repair amount.
Final Thoughts
Avoiding multiple claims on your car insurance policy will go a long way in helping you maintain a low-risk status. Be a cautious driver and know when to file claims and when to pay out of pocket to avoid paying higher claims and non-renewal.
To find out more, contact a company like LH Griffith and Company.
Share8 September 2022
I still remember the first time I had to chose an insurance policy; I was 17 years old and had just saved up enough money to afford my very first car. I was so excited to begin driving, but overwhelmed with all of the different auto insurance options. My father helped me chose a full-coverage policy that would cover the cost of my car if it were to become damaged in an accident. When I inevitably caused a small fender-bender as a new driver, my insurance company paid for my car repairs, so it sure was the best policy for me! Now that I am older and have learned a lot about home insurance and other types of insurance, I thought I would make a blog to help others who need insurance advice, like what my dad gave me. I hope I can help you make wise insurance decisions!