Car Insurance with Multiple Claims

Car insurance with two or more claims

Filing multiple car insurance claims can lead to a tricky situation. The primary effect of multiple claims on auto insurance is higher rates. A second — and less likely — possibility is that of policy cancellation or non-renewal.

If you've filed two or more claims within a three-year period, that counts as multiple claims — no matter if they were filed two weeks or two years apart. Having multiple claims within this time period risks landing you in the danger zone of a possible cancellation or non-renewal.

Let's take a look at how to handle multiple auto insurance claims and how to find better insurance quotes if you're looking to save after experiencing a rate hike following a claim.

Multiple at-fault and not-at-fault accidents

At-fault and not-at-fault scenarios refer to collision and comprehensive claims. A collision claim will be considerably more expensive than a comprehensive claim. A collision claim covers an incident that occurs as a result of the insured driver's actions: for example, colliding with a fixed object or another vehicle.

 
How collision claims affect car insurance rates

On average, an at-fault collision claim raises insurance rates by $64 per month, ($384 per six-month policy period). USAA is the cheapest car insurance company after an at-fault accident.

These rates are averages. Drivers can use these premiums as a starting point in the search for car insurance.

How comprehensive insurance claims affect car insurance rates

Comprehensive coverage is designed to cover damage that occurs outside of the insured driver's control.

Below are the perils covered by comprehensive coverage:

• Theft and vandalism
• Damage caused by animals (rodents or insects)
• Flood damage
• Collision with an animal

Comprehensive claims typically don't result in major rate hikes. On average, a comprehensive claim increases auto insurance premiums by $6 per month. Two comprehensive claims raise car insurance premiums by $13 per month. Drivers with two comprehensive claims on their records should consider USAA, State Farm or Nationwide when comparing rates in search of an insurance policy.

How to handle policy cancellation or non-renewal

Having multiple claims in your driving history is considered to be a red flag in the eyes of an insurance company. Your current insurer may decide that you carry too much risk and could choose to drop you as a client in the form of cancellation or non-renewal of your auto insurance policy. This is more likely to happen if you have a record of DUI, at-fault car accidents with high bodily injury and property damage costs and other traffic violations.

Cancellation

Every insurance company sets its own benchmark for triggering a cancellation, but it is more likely that you'll face cancellation or non-renewal if you've made three or more claims within a three-year period. Most cancellations occur within the first 60 days of a policy, usually due to non-compliance.

The best course of action after cancellation is to shop around with other companies. Some insurers are more risk-averse, but that doesn't mean others won't provide coverage for you. Consider consulting with a local agent and comparing quotes online, especially with non-standard companies if you're a high-risk driver.

Non-renewal

Your insurance company may choose to simply not renew your policy at the end of the policy period instead of canceling it. They may do this for a variety of reasons, but having one too many claims on your record is one of them.

The good news is that there are plenty of other companies to choose from even with a bad driving record — but you will likely need to look outside of the most well-known auto insurance companies, like State Farm, Allstate, Progressive, Nationwide, GEICO and Liberty Mutual, and look for high-risk car insurance through non-standard insurance companies. These insurers specialize in insuring clients who may have trouble finding coverage.

How to find car insurance after multiple claims

There's no magic trick to lower premiums after multiple claims. Depending on how egregious your claim history is, you may even have trouble finding car insurance coverage. But there are some steps worth considering to alleviate the impact of the claims on your insurance costs and find the best car insurance companies.

Be smart with future claims

If you’re in a situation where you think you need to file a claim, follow our guide.

• Use our State of Insurance analysis to see how much your particular claim type would raise your rate in your state. Consider this increase over three years as that is how long you will be charged by your insurance company.
• Get an estimate for the repairs from a mechanic.
• Compare the rate increase plus your deductible to the out-of-pocket repair costs. If it is cheaper to file a claim, do that. But be extra cautious if you’ve already filed two claims in the past three years.

Customize your coverage

The general rule of thumb in the insurance world is if your vehicle is worth less than $4,000, you do not need comprehensive or collision coverage as coverage options. This is because the claims payout you would receive is worth less than the value of the premium you are paying. Determine the value of your vehicle(s) by using Kelley Blue Book and NADA online. All of your vehicles do not need to be at the same coverage level.

If you need physical comprehensive and collision coverage but are still looking to lower your insurance premiums, consider raising your deductible. Because your premium and deductible are inversely related, you lower your bill by raising your deductible. Standard deductibles range from $250 to $1000.

Use insurance discounts

Most discounts are quite small but can add up. See if you qualify for the following auto insurance discounts:

• Multiple drivers
• Multi-vehicle
• Home and auto bundle
• Renters and auto bundle
• Condo and auto bundle
• Good student
• Telematics
• Affinity membership discount
• Green vehicle discount
• Payment by bank account or advance payment
• Homeowner discount
• eSign

Frequently asked questions: auto insurance with multiple claims