One of the most common concerns after filing an insurance claim is whether your premiums will increase. The answer isn't simple. Whether a claim raises your rates depends on several factors: who was at fault, the type and size of the claim, your claims history, and your insurance company's specific policies. Understanding how claims affect premiums helps you make informed decisions about when to file a claim and what to expect afterward.

At-Fault vs. Not-At-Fault Claims

The biggest factor in whether a claim affects your premium is who was responsible for the accident. Insurance companies view at-fault claims very differently than not-at-fault claims.

At-Fault Claims

An at-fault claim is one where you were responsible for causing the accident. If you rear-ended another vehicle, ran a red light, or were otherwise responsible for the collision, the resulting claim is at-fault. These claims almost always result in premium increases because they demonstrate increased risk to the insurance company.

When you cause an accident, you've proven you're statistically more likely to cause another one. Insurance companies base premiums on risk, and your risk profile just changed. The increase can be significant, often 20-40% or more, depending on the severity of the accident and your insurance company's rating system.

Not-At-Fault Claims

Not-at-fault claims occur when another driver caused the accident and you file a claim with your own insurance company. For example, if someone hits your parked car or runs a stop sign and crashes into you, that's a not-at-fault claim if you weren't responsible.

Theoretically, not-at-fault claims shouldn't affect your premiums because you didn't do anything wrong. However, the reality is more complex. Some insurance companies do raise rates after not-at-fault claims, though usually less than for at-fault claims. Their reasoning is that people who file claims, even not-at-fault ones, are statistically more likely to file future claims.

Many states have laws limiting or prohibiting rate increases for not-at-fault claims, so check your state's regulations. Even when allowed, many insurers have policies against raising rates for not-at-fault accidents, especially if you have a long history of claim-free driving.

Comprehensive Claims: A Special Category

Comprehensive claims cover non-collision damage: theft, vandalism, hail, hitting a deer, or falling objects. These claims are generally treated more favorably than collision claims because they don't reflect your driving behavior.

Many insurance companies won't raise your rates for a single comprehensive claim, especially if it's relatively small. However, multiple comprehensive claims or very large ones may still affect your premiums. If you live in an area prone to hail storms or deer collisions, your overall location risk might be factored in, but individual comprehensive claims are less likely to cause rate increases than at-fault collision claims.

How Much Will Rates Increase?

The premium increase from a claim varies widely based on multiple factors. A typical at-fault claim might increase your premium by 20-40%, but this varies by:

  • Claim severity: A fender bender with $2,000 in damage affects rates less than a major accident with $30,000 in damage
  • Your driving history: Your first accident in 15 years of clean driving will have less impact than if you've had multiple recent claims
  • Your insurance company: Different insurers have different surcharge schedules and forgiveness policies
  • Your state: Some states regulate how much insurers can increase rates after accidents
  • Your coverage level: Higher coverage limits can sometimes mean smaller percentage increases

The increase isn't necessarily permanent. As years pass without additional claims, the impact of a past accident diminishes in the rating formula.

How Long Do Claims Affect Your Rates?

Claims don't stay on your record forever. Most insurance companies consider claims history for three to five years, though this varies by state and insurer. After this period, the claim no longer affects your premium calculations.

The impact typically diminishes over time. A claim from last month affects your rates more than one from three years ago. As the claim ages, its weight in the rating formula decreases until it eventually drops off entirely.

It's important to distinguish between how long a claim affects your rates and how long it stays in insurance databases. Claims can remain in industry databases like CLUE (Comprehensive Loss Underwriting Exchange) for seven years or more, even if they no longer affect your current insurer's pricing. When you shop for new insurance, companies can see these older claims, though they may not penalize you for them if they're beyond their rating period.

Accident Forgiveness: What It Means

Accident forgiveness is a feature offered by many insurance companies that prevents your first at-fault accident from raising your premium. This can save you hundreds of dollars over the years following an accident.

There are two types of accident forgiveness:

Earned Accident Forgiveness

Some insurers automatically provide accident forgiveness after you've been with them for a certain period without claims, typically five years or more of accident-free driving. This is a loyalty benefit for long-term customers with clean driving records.

Purchased Accident Forgiveness

Other companies offer accident forgiveness as an add-on you can purchase, sometimes for just a few dollars per month. This can be available even to newer customers or those without extensive claim-free histories.

Accident forgiveness typically covers one accident per policy period. After you use it, you may need to requalify by maintaining a clean driving record for a specified period. Read the fine print: some policies exclude certain types of serious violations like DUIs, and some forgiveness programs only apply to the primary policyholder, not all drivers on the policy.

If you have accident forgiveness, file that claim without worrying about rate increases. That's exactly what the coverage is for. But remember it's typically a one-time benefit, so your second at-fault accident will likely result in a significant premium increase.

When to Consider Not Filing a Claim

Sometimes paying out of pocket makes more financial sense than filing a claim, especially for minor damage. Consider the long-term cost of potential premium increases versus the cost of repairs.

If your damage is just slightly above your deductible, filing might not be worth it. For example, if you have a $500 deductible and $800 in damage, you'll only receive $300 from insurance. But if that claim raises your premium by $200 per year for three years, you've actually lost $300 in the long run.

Before deciding, get a repair estimate and compare it to your deductible. Then call your insurance agent and ask hypothetically whether a claim of that amount would affect your premium. Many agents can give you guidance without actually filing the claim.

Never skip filing a claim when:

  • There are injuries involved, even minor ones
  • Another party is making a claim against you
  • The damage is significantly more than your deductible
  • There's any dispute about what happened or who was at fault
  • Your vehicle is undrivable or unsafe

Shopping Around After a Claim

If your rates increase substantially after a claim, it might be time to shop around. Different insurance companies rate claims differently. While your current insurer might raise your premium 30%, another company might increase it only 15% or offer better base rates that offset the surcharge.

However, understand that the claim will follow you. New insurers will see it when they check your claims history. The advantage is finding a company that treats your specific situation more favorably, not hiding the claim.

Shopping is especially valuable if you've had multiple claims or if your current insurer seems to be charging excessive increases. Get quotes from several companies, being honest about your claims history. The differences in how companies rate claims can be substantial.

Building Back Your Record

After a claim, the best thing you can do for your future premiums is drive safely. Each year without a new claim improves your risk profile. The old claim's impact diminishes, and eventually it drops off entirely.

Consider these strategies to manage premiums after a claim:

  • Take a defensive driving course; some insurers offer discounts for completion
  • Maintain continuous coverage without lapses
  • Ask about available discounts you might not be using
  • Consider raising your deductible to lower premiums, if financially feasible
  • Review your coverage annually to ensure you're not over-insured on older vehicles

Understanding the Bigger Picture

Claims and premiums exist in a careful balance. Insurance isn't designed for small, routine expenses. It's protection against catastrophic financial loss. Using it wisely means filing claims when you need significant financial help recovering from an accident, but handling minor issues yourself when the long-term cost of filing exceeds the immediate benefit.

The decision to file a claim should consider both the immediate financial relief and the potential long-term premium impact. Armed with knowledge about how your insurance company handles claims, your accident forgiveness status, and your financial situation, you can make the choice that best serves your interests.

Remember that premiums aren't punishment. They're risk-based pricing. A claim demonstrates increased risk, and the premium adjusts accordingly. But this isn't permanent. Drive safely, maintain your coverage, and your rates will improve over time as the claim ages and eventually disappears from your rating factors.