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May 15
Factors That Determine Your Auto Insurance Rate and Insurance Claims

Factors That Determine Your Auto Insurance Rate and Insurance Claims

If you own a vehicle you are familiar with the costs associated with maintaining your vehicle. Expenses include gas and routine maintenance such as oil changes and tire rotations. One expense that is often overlooked is auto insurance. There are several insurance companies out there and it is important to shop around for the best rates and coverage. Additionally, there are factors you can control that will help decrease your premium costs. Some of these factors include your driving record, age, geographic location and the vehicle you drive. There is also a common belief that filing a claim will increase your auto insurance rates; however, this statement is not always true. Here is a look at some circumstances that will help lessen the effects of filing a claim.

More Claims Will Result in an Increased Rate

First, it is important to note that if you file multiple claims you will receive an increased insurance rate. Therefore, it is important to develop safe driving habits and try to avoid claims in the first place.

Your Driving Record

Even if you have developed safe driving habits and obey all traffic laws, unfortunately you will more than likely still be involved in some type of accident or circumstance that requires you to report a claim to your insurance company. Fortunately, you don’t have to immediately assume that your insurance rate is going to skyrocket. If you have a perfect driving record, many insurance companies are willing to forgive one claim. This is where your excellent driving history can be a huge benefit to you.

Type of Claim

Another factor to consider when insurance companies decide whether to raise rates or not is the type of claim reported. There are certain types of claims that will result in increased rates such as drunk driving, racing and other risky behavior. If the claim is for any of these examples, you may see your rates increase dramatically or even cancelled altogether because the insurance company will determine you are too risky to insure. However, if the claim is for a parking ticket or other non-moving traffic violation, you most likely won’t see your rates increase at all.

No Fault Accidents

If you were involved in an automobile accident that was not your fault, you may not see your rates increase. This is because the insurance company will not have to directly pay for the damage to your car. Hopefully they will be able to recover the money from the at-fault individual’s insurance company.

Size of Claim

Many insurance companies don’t tend to increase rates unless the claim is more than five hundred dollars. For example, if you file a claim for a broken windshield and the insurance company has to pay approximately one hundred dollars, you probably won’t see an increase in your rates. It is important to report all accidents and damage to your vehicle and then you can decide whether or not you want to file the claim and have the insurance company help pay for the repairs.

Your Credit Score

One factor that many people are unaware of that affects their insurance rates is their credit score. Many insurance companies associate lower credit scores with a higher risk potential. While this association is considered somewhat controversial, most insurance companies still rely on this factor. Therefore, if you have a great credit score and need to report a minor claim, your rates are less likely to increase.


One of the best ways to avoid paying more for your auto insurance is to develop good, safe driving habits. This will help you maintain a clean driving record, decrease your premiums and keep you and other people safe on the road.