All auto insurance claims do not receive the same treatment. Some can turn auto insurance plans into high-risk auto insurance, others barely impact your premiums. Here we take a look at how different types of insurance claims impact your finances. 

Collision Related Claims

Collision insurance claims can significantly impact your insurance rates and insurance premium especially if you are at fault for the accident. The insurance company determines who is at fault, not the police. Your insurance company must follow a set of guidelines imposed by the government to determine whether a driver is fully or partially at fault. Here is the list of the government-prescribed fault determination rules

One driver must be at fault in almost all scenarios. Your insurer has the right to determine who is partially or fully at fault, whether or not the police decide to hold any driver accountable. Based on fault determination rules, insurers can determine whether or not you are partially or fully at fault. 

Not At Fault On Your First Collision

Your insurance premium rates will not go up if you are involved in a collision where you are not at fault. For example, if someone rear-ends you it is highly unlikely that it is your fault. 

At Fault On Your First Collision

The collision will be documented on your insurance record and affect how much pay annually. Initially, you might not see your car insurance premium increase the very next month but be careful at the time of renewal. 

Having A Clean Driving Record

A clean driving record is about six years of driving without a claim or conviction. Insurers might not increase your premium at all if you are at fault in a collision, or slightly increase your premium. Some insurance companies might propose an endorsement (aka insurance policy add-on) as first claim forgiveness. The main goal for insurers is to maintain terms with good clients so the endorsement serves as a slight change in insurance coverage to accommodate their client’s provisions. This achieves the effect of better overall business. 

Lending Someone Your Vehicle

You will be held responsible if someone else drives your car with your permission. If they have an accident, you will be held responsible and it will go on your insurance record because your insurance is attached to your vehicle. It will be difficult to deal with a situation if the person who uses your vehicle does not have their own insurance and the claim is more than your coverage because you will have to pay out of pocket for that incident. Expect your insurance premiums to go up if anyone else is driving your car and the driver is at fault for a collision.

Carrying No-Fault Insurance

The name no-fault insurance is slightly misleading because you can still be at fault with this type of coverage. The term no-fault insurance implies that an insurer will only deal with their own insurance company in all cases for all claims. For clarification purposes, if you are the driver at fault in a collision, your insurer will only pay for repairs for your car and not the other car. You might have to pay out of pocket for the damages to the other vehicle if the other party claims for it.