How Do Collision Claims Affect Your Car Insurance?

Chances are that your car is one of the most valuable assets you own. Car insurance offers protection of your investment in case of accident, vandalism or theft. In addition, it is a requirement of lending institutions and car leasing companies. You must have full-coverage on the vehicle in order to obtain financing.

As the driver of a vehicle, you become responsible for the safety of the passengers in your vehicle; other driver’s whom you share the road with; pedestrians; and other people’s property. If you are involved in an accident, collision car insurance helps cover the costs associated with injury or damage.

If you are involved in an accident, you should contact your insurance agent immediately to begin the claim process. Your insurance agent will contact a Claims Adjuster who will assess the damage caused to your vehicle and work with you to resolve any issues, including who is at fault.

It’s important to note there are two kinds of deductibles: comprehensive and collision. Comprehensive covers damage caused to your vehicle by vandalism, hit-and-run, hitting an animal, or acts of Nature such as hail damage.

Collision covers damage caused to your vehicle due to a collision with another car while on the road. Comprehensive claims do not affect your insurance premiums, but collision claims do.

There are many factors involved when it comes to determining how your car insurance premiums will be affected due to a collision. If the accident is not your fault and your insurance company is able to reclaim its losses from the at-fault driver’s insurance company, there may be no change in your premium.


If the accident is your fault, your insurance premiums are likely to increase by as much as 20 percent. This will depend on the extent of the damage and if there were injuries involved. If you are the cause of an eight car pile-up with multiple injuries, chances are good your car insurance will be cancelled when it comes time for renewal. However, if you are involved in a small fender bender with less than $2,000 in damage, you may only experience a slight increase of 3 percent or less.

Most insurance companies will forgive one collision claim. However, if you file multiple claims your premiums will increase, or your policy may end up being cancelled. Even if you are not at fault, insurance companies frown upon policyholders who are frequently involved in auto accidents.

If your insurance carrier cancels your policy due to a collision claim, you have the right to file an appeal through the Insurance Department. Be prepared to spend up to a year fighting for your rights. This is not to say you cannot win, but you must possess patience and perseverance when going up against the insurance industry giants.

If your car is valued at less than $2000, you might want to consider not filing a collision claim. This is particularly true if you have a deductible of $1500. Just because you are involved in an accident does not mean that you are required to file a claim with your insurance company.

If the damage to your vehicle is minimal, weigh the pros and cons to determine if it is worth filing the claim. Consult with your insurance company and inquire how the collision claim will affect your car insurance premium. If it will result in a premium increase over an extended period of time, do the math and see how it works out. You may discover that it is better to repair the car out-of-pocket as opposed to filing a claim