Here’s one more incentive to practice safe driving techniques with a religious fervor. Filing a single claim of $2,000 or more will cause an average motorist’s car insurance premiums to skyrocket by 41 percent, according to a recent study conducted for the website InsuranceQuotes.com.
And that’s just the national average. The study found that residents of California are subject to the stiffest penalties for, well, taking advantage of coverage for which one already pays dearly, with a single claim triggering a budget-busting 86 percent average rate boost. Those living in Maryland tend to suffer the mildest financial hardship after filing a car insurance claim, with a typical jolt of 22 percent.
According to the National Association of Insurance Commissioners (NAIC), the average car insurance premium in the U.S. is $815; do the math and you’ll find that means making a claim would cost the typical policyholder an additional $335 more per year in premiums.
This is all based on the actuarial premise that someone filing an insurance claim is more likely to get into another accident than a policyholder who’s never opened the umbrella of coverage, so to speak.
So what about an unlucky motorist who, in fact, follows up with a second car-insurance claim? He or she hits the proverbial ball out of the old park with a doubleheader of a premium upsurge at a national average 93 percent. “Many consumers underestimate the consequences of making claims because they can affect your rate for years,” says Laura Adams, a senior analyst at insuranceQuotes.com. “If you get a premium hike for making a small claim, that could hurt your finances over the long run.”
Bodily injury and property damage tend to be the costliest claims in terms of premium enhancement, according to InsuranceQuotes.com data, at an average 45 percent and 41 percent boost, respectively, while simple claims for comprehensive (non-collision) damage triggering comparatively minor bumps at just two percent.
Here are the states where those filing a single car insurance claim can expect to see the highest rate increases (based on a $2,000 claim against one’s bodily injury coverage):
California — 86 percent
Massachusetts — 83 percent
New Jersey — 69 percent
North Carolina — 58 percent
Minnesota — 52 percent
And here are the five states where drivers can subject to the lowest pocketbook penalties under the same circumstances:
Maryland — 22 percent
Michigan — 25 percent
Montana — 27 percent
Oklahoma — 27 percent
Mississippi — 28 percent
As mentioned above, these rate increases are hardly a one-time deal. Experts say consumers can expect such premium hikes to stay in effect for between three to five years – depending on the severity of the underlying incident – after which they should drop to their previous levels, assuming of course one has not filed another claim in the meantime.
To see the original article, go to Forbes.com
