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How long does a car insurance claim stay on your record?

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Here's what you need to know...
  • Your insurer will only penalize you for an accident where you are found to be at-fault
  • Accidents will stay on your record for three years in many states, but seven years in some states
  • If you are at-fault in an accident, your premiums will rise regardless of the amount of damage you cause

Consumers buy auto insurance to satisfy state laws and also to protect themselves from the financial loss.

Unlike most of the products or services that you buy from retail stores or other providers, car insurance is one of the few products that you want to use because it means that you have suffered a loss.

While car insurance is a financial tool that is used to protect you against financial loss during difficult times, when you face a situation where filing a claim is your only option you will be happy you have it.

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As soon as you file that claim, your insurance provider will help you in several ways:

  • They will act as your advocate and speak with the other party or their representative.
  • They will tow your vehicle to a safe place.
  • They will arrange appointments with repair facilities.
  • They may possibly even set up a car rental for you so that you can get to and from work.

Having the right coverage will pay off and make life easier when it comes time to pay repair bills or rental invoices, but all of this may come at a cost.

Even though you have paid your insurance premiums regularly for coverage, having an accident on your record and filing a claim can affect your rates in the future.

You should know how a claim can affect your record and how much your rates can climb just so that you are prepared in the event that you have to use the product you pay for each and every month. Read this guide to car insurance rates after a claim, and learn what you need to know.

How will a car insurance claim affect your car insurance rates?

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Not all claims will affect your insurance policy, but those that do can increase your rates significantly. Many people are reluctant to file claims on their policies because they simply do not know which claims are going to end up costing them money for the years to come.

If you have minor damage, it might be in your interest not to file a claim at all. After all, if a rate increase following an accident is more than the cost of the damage, you will regret filing.

Insurance companies can only legally raise your premiums when you are found to be at fault for the loss.

This is why non-fault comprehensive claims for damages sustained while a vehicle is parked do not affect the policyholder’s rates at all. It is collision claims, where the vehicle was moving and collided with another vehicle, that can become more difficult to assess fault.

How does fault affect whether a claim is chargeable?

Since fault is ultimately what determines which party will pay higher insurance rates, it is very important that you collect all of the information the claims adjuster needs.

If you are obviously not at fault for the accident, your premiums will not even be affected. If you are, however, egregiously at fault then your premiums will likely go up dramatically.

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Does the percentage of fault matter?

It might be easy to understand the difference between at-fault and not-at-fault, but many times companies will settle a claim as shared fault. It is possible for you to contribute to a loss that you were found to be not at fault for.

Any claim where you are a driver are considered to be 51% or more at fault is deemed to be a chargeable claim.

When there is contributory fault, you may have played a part in the cause but were not primarily responsible. Even if it is found that you are 50% responsible, as long as the percentage is below 51% you will not be charged for the claim.

This can be reassuring to people who are sure that they did not play a part in the cause or played just a minor part when they want to file a claim.

How much will the rates go up?

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If you are found to be the negligent party in a loss, how much your rates go up will depend on several different factors. An accident is only chargeable when the damages meet a state threshold or when there are injuries.

In most states the threshold is low. For example: Claims with damage of $750 total in California can affect rates.

Claims for bodily injury will have a greater affect than claims for just property damage. How much your rates will go up is based on your age, the state you live in, your years of experience, whether or not anyone was injured, and if you have other accidents or tickets.

There is no way to find out exactly how much a claim will increase your rates until it is filed, but there are studies that show averages.

For people who file just one claim, the average increase is 41 percent. Filing two claims throughout the year leads to an increase of 93 percent on average. Losing an accident-free discount can great an even larger blow because these discounts are as much as 20 percent off of the entire policy.

How long can the claim affect your driving record?

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Whenever you apply for insurance or even a job, the company will run your accident history and your motor vehicle report to find out if you have any at-fault accidents.

Having accidents can affect your quotes, your eligibility for insurance, and if you will land the job. It is nice to know that filing a claim is not going to haunt you for life. Eventually, it will drop off of your record.

In most states, car accidents and reported claims will fall off of your record after three years. In some states the drop off period is after five years.

It is important that you know that some companies will ask for you to list accidents that are as far as seven years back. You must still be honest while doing this so that your quote is accurate.

You will not be charged for the loss, but may not get certain discounts based on the state eligibility rules.

Surprisingly to most, if you have an accident that results in $30,000 of property damage, you will pay the same premium surcharge as you would if the damage was only $2000.

If you had an accident and you feel like your rates are too high, now might be the time to begin shopping. Start comparing car insurance rates now by using our FREE tool below and you can instantly find out how much you will pay through other insurers.

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