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Filing a Claim on Your Car Insurance: Will It Drive up the Premium?

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author photo by Russ Heaps December 2015

Filing even a smaller claim against your car insurance can drive up the premium by as much as 75 percent on average, say the experts at insuranceQuotes. When -- and how much -- your premium increases depends primarily on the state in which you live and the type of claim. But even in states where such claim-related dings to your insurance costs are a relative bargain, such as Maryland, the average premium increase still exceeds 21 percent.

There is a reason why raising the deductible on your car insurance often significantly lowers the premium: The higher the deductible, the less likely you are to file a claim. However, even when the cost of an accident exceeds the deductible, you might want to do some math before filing a claim with your insurance carrier. You may spend more long-term on increased premiums than the amount of the claim.

Going state by state, insuranceQuotes looked at the effect of a $2,000 claim on the premium of a 45-year-old married female driver with a spotless driving record. It looked at claims for bodily injury, property damage and comprehensive. What it discovered is that certain types of claims are more likely to trigger a premium increase, and the amount of that increase has a lot to do with where you live.

Types of Claims

In the world of insurance claims, bodily injury claims are on average five times more costly than property damage claims resulting from a collision. You won't have any real control over a third party filing a claim; the national average is more than $15,000 per person. This is the type of claim most likely to really drive up your annual premium.

You do have some control, however, when it comes to those accidents where no one is injured or basic fender benders. Across the country, property damage claims from collisions average just over $3,200. That's a lot of money to most of us, but maybe paying it out of pocket will be cheaper in the long run than passing it on to your insurance company. Often, when an insurance company raises a premium because of a claim, that increase remains for 3 to 5 years.

Because they are out of a driver's control, a comprehensive claim is the least likely to prompt an increase. These are property damage claims not caused by a collision, such as a tree branch falling on your parked car. Typically, these claims have only a minimal impact on your premium.

There are no hard-and-fast rules for claim-related premium increases. Your driving history and any previous claims filed will enter into the insurance company's decision-making. In some states, however, any increases tend to be higher than in others. According to insuranceQuotes, these differences are often related to the amount of regulation imposed on the insurance industry by the state.

Where You Live Makes a Difference

In states where regulations prevent insurance companies from using all their preferred tools, such as credit scores, for establishing premiums, insurance carriers tend to jack up premiums more after a claim. This is the case in Massachusetts and California.

The five states with the highest claim-related premium increases:

  1. Massachusetts -- 76.2 percent.
  2. California -- 75.3 percent.
  3. New Jersey -- 62.35 percent.
  4. North Carolina -- 51.65 percent.
  5. Minnesota -- 47.89 percent.

The five states with the lowest claim-related premium increases:

  1. Maryland -- 21.59 percent.
  2. Michigan -- 23.41 percent.
  3. Montana -- 24.56 percent.
  4. Oklahoma -- 24.61 percent.
  5. Mississippi -- 25.89 percent.

What it means to you: Look before you leap. Just because a claim is more than your deductible doesn't mean it's a smart idea to file it with your insurance carrier. Sometimes it makes more sense to bite the bullet and pay it out of pocket.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Filing a Claim on Your Car Insurance: Will It Drive up the Premium? - Autotrader