Be Careful What You Claim For
The insurance industry in the United States is out of control. With stagnant wages, little savings, and premiums and deductibles both on the rise, it is important for Americans to have an understanding of their insurance policies so they know how to handle an unexpected situation.
While medical insurance is getting most of the attention these days, car insurance costs are skyrocketing. In fact, a new study conducted by insurancequotes.com has found that a single at-fault claim, even for a driver with a clean driving record, can crank up their premium costs by an average of 38%. A second claim within the same 12-month period could raise their insurance premiums by a whopping 86%, and stay at that rate for the following three to five years.
Obviously, the cost of filing an at-fault claim ranges from state to state. The study shows that in Maryland policyholders pay the least for their first at-fault claim, with an average rise in premiums of 20%. In Massachusetts, the same claim could cost an extra 67% per year.
Now, insurance providers categorize insurance claims into three categories: bodily injury or liability claims, damage, or comprehensive. Bodily injury claims, where the victim has suffered injury and needs some kind of medical care, are the most expensive, with a national average of $14,653 per claim. Damage claims are much less expensive, averaging around $3,000 per claim in the U.S. in 2012. The last category, comprehensive claims cover things like hail damage, theft, and fallen trees. These claims average a reasonable $1,585 per claim. While bodily injury and damage claims can cause dramatic increases to a policyholder’s insurance premiums, a comprehensive claim will only cause a modest 2% jump.
What all these statistics show is that a policyholder might want to double think before calling in a damage claim, if it can be avoided. A comprehensive claim, on the other hand, is a safe claim to make as the increases in premiums are minimal. Before making any insurance claims, it’s important to do the math and consider the long-term implications to your policy. It might be more financially prudent to simply pay for repairs out of pocket, instead of adding over 50% to your premiums for the foreseeable future.