CAN YOU FILE TOO MANY AUTO INSURANCE CLAIMS

CAN YOU FILE TOO MANY AUTO INSURANCE CLAIMS

Frequent involvement in an automobile accident can yield an unfavorable outcome on individuals. Most individuals are concerned especially when involved in a second or third accident almost in a sequential order. They fear that filing multiple claims will have a negative bearing on their auto insurance. This therefore necessitates looking at the issue of too many claims.

What are too many claims?

There is no definite answer to this question. It is dictated by the insurance company, the nature of the accident and the state of residence. From an insurance company point of view, too many claims are two at-fault claims which are filed in a 3 year duration. As such, it is wise to reduce the number of claims made. This stems from the fact that insurance companies aim at making profitable gains. If they incur more on you compared to the premiums you pay, they will certainly not renew your policy if you make too many claims.

Which action can insurance companies take?

The consequences that arise are majorly dictated by your specific insurance company. First, the respective insurance company has to assess several factors before taking action. The legitimacy or illegitimacy of the claims is one such factor. The credit score of an individual is another factor considered. Where your credit score is low, your premium payments will be increased by a certain amount. After the insurance company assesses these factors, the following consequences can result:

1. Policy cancellation

Insurance companies strive to attract more clients thus this consequence is very rare but it is likely in some situations. The insurance company can terminate the policy prior to its maturity date if the claims filed are fraudulent. However, chances of a person’s policy being cancelled due to multiple claims are very low.

2. An increase in your premiums

Most insurance companies are uncomfortable offering compensation for multiple claims on the same policy. Regardless of whether an automobile accident was your fault or not, the insurance company can respond by significantly increasing your premiums.

3. They may fail to renew your coverage

Upon maturity of your present auto insurance policy, an insurance company can decide not to renew your coverage. This action is only taken if the insurance company establishes that you are extremely a “high risk“ driver. In this case, a “high risk“ driver is one who:

• Has too many and frequent traffic violations thus a bad driving record.
• Has a DUI (Driving under the Influence) conviction.
• Makes illegal claims.
• Is involved in too many accidents for which he or she is liable.
• Neglects to pay premium payments on time.

Will the consequences of filing too many claims always happen?

The unfavorable situations that arise out of too many claims can be avoided. Simple measures can prevent having to file too many claims. They include:

• Adhering to traffic laws while driving. You will reduce your involvement in automobile accidents hence insurance claims.
• Timely and consistent payment of premiums consistently will ensure your claims are addressed.
• Refraining from making unnecessary claims. If you happen to be involved in a small accident in which you sustain minor injuries or car damage, it is better to cater for these expenses as opposed to making a claim.

To wrap up, it is advisable not to file too many auto insurance claims. By doing so, you will save yourself a lot of trouble- having to pay almost double premiums, risking non-renewal or cancellation of your policy.