Can an Insurance raise your rates if you file a claim?

What is the name of your state? FL

I heard in FL it is legal for an insurance company to "recoup their lose" by raising your rates if you file a claim with your insurance company for damages. Is this true?

Thanks!!

gilfjoa said:

What is the name of your state? FL

I heard in FL it is legal for an insurance company to "recoup their lose" by raising your rates if you file a claim with your insurance company for damages. Is this true?

Thanks!!

Click to expand...

We need more details - what happened that is causing you to ask this?

If you were not at fault, then you will not be charged with an at-fault accident or surcharged for using your collision coverage. Your insurance will just get their money back from the at fault driver's insurance.

(All of what I'm going to describe assumes you were at fault. If you were not found to be at-fault, then as ecmst12 said, don't worry about it. You would then just be considered to have been unlucky enough to get hit by the idiot who was at-fault.)

If you are at fault:

You are not quite understanding the situation here. The insurance company is not trying to "recoup their loss", your chances of getting into a wreck was already priced into the premium when they wrote the policy. Insurance works because of the law of large numbers. They made a bet on you not wrecking and "lost" that bet. They lost a lot of money on your policy, BUT they will "win" on a lot of other drivers who do not file a claim. Multiply that by tens of thousands of policies, and they can figure out how much they need to charge to be reasonably assured of making money from your premium and investment income after all claims are paid.

What's happening here is you are no longer the same risk you were a year ago. A year ago you were just someone with a clean record and supposedly had the same chance of having an at-fault accident as every other person with a clean record of your gender/age/marital status/traffic tickets/type and model of car/etc.

You are not that person anymore, if this was your fault then you are now a person who had an at-fault accident in the last few years, and you have the same chance (much higher than people with clean records) of getting into another at-fault accident as everyone else who recently had an at-fault accident with your gender/age/marital status/etc.

The insurance company has discovered that you may not have been as good of a risk as they once thought, and they will now want more money to cover themselves in future policies until you prove to them that you are a safer driver again by not having another at-fault accident for a few years. Similarly, when you turn that magic age of 30, many insurance companies will give you a big rate cut on the next policy, because you are not 29 anymore. For whatever reason, 30 year olds are safer than 29 year old drivers, and if they dont give the discount, the competition will.

When an insurance company begins to lose money overall on all risks, they just raise rates on everyone, inflation hits insurance too. In addition to that, they are constantly trying to figure out who is a safer or more dangerous risk, and give out rewards or surcharges accordingly.

In many states you get a surcharge for having an at fault accident, it's not just that your risk increased. In PA, an at-fault accident which caused your insurance to pay out I think $1100 or more, you get a 40% surcharge tacked on to your rate for 3 years. I just had mine drop off from my last accident, what a relief that was!

We don't have any details as Zigner indicated. If you weren't at fault, your rates will not go up for using your insurance.

If you were at fault, the rates most likely will go up when your policy comes up for renewal. The increase in rates can vary from state to state & from co. to co. Also, the increase depends on the nature & severity of the accident. (ie minor acc. vs acc. involving a DUI) Sometimes they even cancel coverage. A few cos. forgive a first accident but qualifications vary from co. to co.

ecmst12 said:

In many states you get a surcharge for having an at fault accident, it's not just that your risk increased. In PA, an at-fault accident which caused your insurance to pay out I think $1100 or more, you get a 40% surcharge tacked on to your rate for 3 years. I just had mine drop off from my last accident, what a relief that was!

Click to expand...

It has to be fundamentally based on the risk, or the state department of insurance generally would not have permitted the surcharge. You were surcharged because your insurance company was able to show to your state regulator's satisfaction that a driver with an at-fault accident resulting in significant damage (so no parking lot fender-bender) in the last 3 years has an expected future loss high enough to need the surcharge. There are some states with little to no regulation where this may not necessarily apply, (definitely not PA!) but generally the insurance company needs to prove they need the extra money.