Are you worried that your insurance rates will increase if you file a claim? This is one of the most commonly asked questions in the insurance agency. Unfortunately, this questions doesn’t have a simple yes or no answer; it depends on the situation and on your personal claim. No two claims are the same.
In general, there usually is an increase after a chargeable loss. In terms of auto insurance this means you are the party at fault, and in terms of home insurance this usually refers to the majority of losses.
But if you are constantly paying out money to your insurance, why does your costs increase when you actually have to use the service you are paying for? Why do you pay insurance, just to have the rates increase when you need to use it?
It’s because insurance is really a transfer of risk. Insurance costs are usually determined on how much of a risk you pose to the company based on a variety of factors that differ based on insurance type. As these factors change, your insurance rates change.
For example, if someone who has a clean driving history is less risky than someone who has been in multiple accidents and has multiple traffic violations. The person with the bad history is considered to be more risky to an insurance company because there is more of a chance that this person will get into another accident and the company will have to pay to cover the individual. Because of this, this person would have a higher insurance rate that would increase each time they partake in risky behavior.
In summary, insurance rates do typically increase when claims are filed. As an independent agency, we at Jessica Liu Insurance Services do not set the company’s rates or rules, but we do want you to be well-informed and comfortable with your insurance coverages. We encourage you to reach out to us by phone at 415-386-2283 or email at [email protected] to discuss your insurance questions and concerns with one of our agents.