Insurance Premium Increase

by Dan

My 17 year old son had a minor accident in a snow storm. Low speed, his fault, damages between the two cars > $3000. We are trying to decide if we should pay out of pocket, or go through our insurance company. Do you have idea what kind of % increase we will get on our premium, and how long it will last?


Answer:

Hello there, Sorry to hear about your son's accident. Good things it was low speed and we hope that no one was hurt.

There is no correct answer to your inquiry. You can ask your insurance agent who has better understanding of your situation (i.e. policy, driving history, claim record, how long you have been a customer, and information about the actual insurance company). The agent has a good understanding, but in many cases the people making the decision are the people in the under writing Department.

Ok with that disclaimer, there are couple of things you should consider.

Liability exposure of your son. We know that the accident was low speed and that everyone was find. This does not mean that someone cannot make an injury claim against your son. Most statutes of limitations are as short as 2 years for injuries, some states are even longer than that.

If you do not file a claim, a lawsuit can surprise you later on and your insurance company will not provide a defense. You have a duty to report all claims in your policy, not reporting the claim can leave you personally open to more than a simple fender bender.

You can file the claim and decide to pay out of pocket to avoid having the insurance company make a payment in your behalf. However, remember that successful insurance companies are the one that are very good at assessing risk. If they find out that you son caused an accident, the simple fact that they have knowledge of the "risk" can cause them to jack up the price.

We believe that every claim raises the premium (some agents and underwriters disagree), the question is how much will it increase? It depends on the factors mentioned above: policy, driving history, etc.


Will your accident increase your rates? We have actually written couple of pages on the topic that might help some more.

Click here for more information

I hope this helps.