| Will
My Insurance Company Drop Me If I Make A Claim?
The
short answer is it depends. Of course, your insurance company
may choose not to renew your policy for many reasons. Among
those reasons are tickets, accidents or other information which
demonstrates that you are a high risk individual who is likely
to make a claim. (Remember insurance companies only make money
by taking your premiums without ever having to pay a claim on
your behalf).
Generally, if you are not at fault in an automobile accident,
and your insurance company pays you monies under its policy,
they will not usually drop or increase your coverage.
If however, you are at fault in an accident, then your insurance
company may attempt to raise your rates when your coverages
are renewed. In rare instances, and after several claims or
tickets, your own insurance company may drop your coverage
or increase your premiums to the point that you will have
to seek new coverage.
Certain types of coverages, like uninsured motorists coverage
and medical payments coverage provide payment to you even
if the other driver is at fault, but does not have sufficient
coverage to pay all of your damages. Making a claim against
your own insurer for these types of damages under these types
of coverages do not provide a basis for your insurer to drop
you.
Your insurance policy also requires that if you are involved
in an accident you must cooperate with your own insurance
company and assist them to a reasonable extent. Failure to
provide this cooperation can result in a denial of insurance
coverage thereby leaving you personally exposed for damages.
Thus, even if you are at fault in an automobile accident,
it is prudent to report the accident as soon as practicable
to your own insurer.
When a person makes several claims within a certain period
of time (usually three years), the insurance company may not
choose to drop you, but instead put you into a "pool"
of other high risk drivers for whom the premiums are substantially
increased. Some insurers will double, triple or even quadruple
the the premiums for such high risk persons. Alternatively,
the insurer may only offer insurance in minimal coverages
to avoid the potential of paying a large loss on behalf of
someone they feel is a bad risk.
The best way to avoid these consequences is to be a defensive
driver. Always be aware of the other guy. Most insurers reward
drivers who do not make claims with premium discounts.
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