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5 Things That Could Affect Your Car Insurance Claim

When you are purchasing car insurance, you expect the best coverage and lowest premiums possible. However, certain factors can drive up your rates and affect the amount of coverage you receive. These factors can later affect your car insurance claims when you attempt to collect funds after an accident.

#1: Driving Record

When insurance companies assess your application for a policy plan, one of the first items they look at is your driving history. This record indicates how much of a risk you are to the insurance company and how much money you could cost them. An insurance company will assess your driving record during your initial application and whenever you renew your plan.

Driving records littered with tickets, accidents, and traffic violations raise several red flags for companies. Any subsequent violations after the insurance company approves your plan will raise your rates for the next three to five years. When you file a claim, the insurance company could factor in your driving record when evaluating your case and use it to justify a settlement amount.

#2: Number of Previous Claims

Your claims history can have an impact on your monthly rates and current claims. If you are at-fault for multiple accidents, your rates will increase significantly. If you file multiple comprehensive claims, you will not receive a rate surcharge. However, the number of claims that you make throughout your insurance history will matter to the insurance company.

If you make more than one claim per year, you will receive higher rates. Significantly large amounts of claims will indicate to the insurance company that you are a high-risk driver. As a result, the company will classify you as “high-risk,” and raise your rates. This factor may impact any future claims as well; insurance companies may offer you lower amounts or not provide the same standard of care.

#3: Your Insurance Type and Coverage Details

Different insurance companies offer a variety of different rates. The more insurance coverage you have, the higher your rates will be. In addition, when you file a claim with a comprehensive insurance plan, you will receive greater services and higher policy limits for compensation. However, you will have to pay a higher monthly premium.

You can compare plans online to find the best option for you. If you are looking for a lower rate with similar coverage, shopping for insurance online can help you lower your premium significantly. However, if you have a history of car accidents or have unique coverage needs, selecting a more expensive plan may be a necessity. If you do not have the coverage you need at the time of the accident, your out-of-pocket costs will be much higher.

In addition, your insurance company will assess your overall insurance history. You should have insurance for just as long as you own a motor vehicle. If you have gaps in your insurance history where you did not have coverage, your insurance company will flag the lapses. Driving without car insurance is illegal in most states, including Arizona.

#4: Your Place of Residence

In addition to your driving and insurance history, your insurance company will analyze where you live. Location is one of the most important factors when determining insurance rates and coverage recommendations.

Insurance companies study the following factors to make these decisions:

  • Crime rates
  • Weather patterns
  • Number of claims in your area
  • Severity of claims in your area
  • Neighborhood density

#5: Your Marital Status

According to insurance industry research, people who are married are involved in fewer accidents and receive fewer traffic violations than single drivers. As a result, many companies will reduce insurance rates if you are married.

If your insurance company uses any of these factors against you when you make an insurance claim, the courts could consider the incident an act of bad faith. If your insurance company fails to provide you a defense for your insurance claim without an explanation, contact a car insurance attorney.