Your insurance policy is there to protect you and help you build your better future. However, this does not mean that you want to be filing claims left and right all day long, 10 times a year. We want to be selective in the claims we file and we’re going to talk about that.
We’re going to talk about how claims, accidents and tickets affect your insurance premium. It’s important to know that almost every single claim that is filed on your policy is going to negatively affect your insurance premium.
In other words, pretty much every claim you file is gonna make your rates go up. That’s not something we want. And unfortunately there are even car insurance companies that will raise your rates for not at fault accidents. That means it wasn’t your fault, but there’s lots of not at fault accidents on your record.
There are some insurance companies that will even use that to negatively impact your insurance premium.
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First, let’s talk about claims and how claims are going to affect your insurance premium. Most claims will stay on your insurance record for 3-5 years. It just depends on the insurance company. Some insurance companies will only charge you for it for three years.
Others for five, although more and more are moving to five I would guess within the next few years, all insurance companies are going to hold claims against you for five years. A lot of people think they can gain the system and be smart and move insurance companies and those claims won’t follow them. That is not the case.
All insurance companies download their data into a central database and anytime you go and get a new quote or a new policy, the new insurance company is going to pull from those records and if you have prior claims you can’t hide them. They’re gonna be in that database and the new insurance company is going to use that to raise your insurance premium.
Something else to be aware of is if you have too many claims within a certain time period, usually it’s two years. There are companies that will not even take you. They’ll say no sorry. We don’t want to insure you and then you have to go and find the company that will take you and they’re probably gonna charge you an arm and a leg because they know there are other companies out there that won’t take you.
Your options are very limited. We have other videos that talk about claims and how they affect you and how you should decide if you should file a claim or if you shouldn’t. Check out those videos for more information. Now let’s talk about tickets, traffic violations and how those negatively affect your insurance premium.
Tickets & Violations on Your Insurance
Now, tickets and violations will also stay on your record for 3-5 years depending on the insurance company. And those also follow you around to each insurance company as well. Insurance companies every time you go to them will run a motor vehicle report so that the motor vehicle shows that you have a speeding ticket or a red light violation.
The insurance company is going to pull that and they’re going to use that to raise your insurance premium every year when your policy renews, the insurance company is going to run that motor vehicle report. So let’s say you’re halfway through your one year policy term, let’s say we’re six months in and you get a speeding ticket.
That speeding ticket will not affect your rates immediately. Rather they will wait until your policy renews and then at that point they’ll realize you have a speeding ticket and they will raise your rates because of it, but it will not happen until your policy renews. So if you’re gonna get a speeding ticket do it right after your policy renews and then you have a whole year of lower rates before they jack those rates out because of the speeding ticket.
The type of violation will determine how much your insurance premium goes up. Each insurance company measures things differently. But most will look at speeding tickets and they’ll say, okay, you were 1-10 over the speed limit. You were 10-20 over the speed limit, we’re gonna raise your rates more because of that. Okay, now it was a criminal speeding ticket, you were going 35 miles over the speed limit, they’re gonna really high cure rates up.
If you get that type of a speeding ticket. Same thing with red lights. They usually will hike your rates up pretty big because of that. So each violation is going to determine the severity of it is going to determine how much your rates increase. Now when it comes to violations, I should say, when it comes to speeding ticket violations, specifically in most states, there are things you can do to make that one not show up on your motor vehicle record and then to, it won’t show up on your insurance policy and raise your rates most of the time when you get a speeding ticket.
As long as you haven’t gotten a lot of speeding tickets within a one year period, you’re given the option to either one, pay the ticket or to go to traffic school. If you go to traffic school most of the time they will erase that speeding ticket from your motor vehicle record, which in turn will erase it from your insurance policy.
One thing to be aware of that sometimes trips people up and they don’t realize it. If you get that ticket and you simply pay it, that is you admitting fault saying yes, I was speeding, here’s my money, I’m not gonna go to traffic school. In that case you just threw your money away, that speeding ticket is going to go on your motor vehicle record.
That ticket is going to raise your insurance rates. So if you’re wanting it not to show up on your record, make sure you pay and go to traffic school. Good thing is, most states give you the option to go to an online traffic school. So it’s not as bad. You don’t have to go and sit in some boring classroom for eight hours on a Saturday.
You can do it from home while you watch Netflix on the site.
Insurance Companies Use Data To Determine Your Premium
It’s important to note that insurance company, they don’t just randomly increase your rates because of at fault accidents even not at fault, accidents, speeding tickets. They use data to determine all of these things. So they’ll look at data and say, okay, this person, they like to speed.
We have the data that shows people that speed on a regular basis are more likely to get in an accident and are more likely to cost us the insurance company more money. Therefore we are going to raise their rates. So I’m not here to discuss whether it’s fair or not that they raise your rates because you filed a claim or because you speed or even because you gotta not at fault accident simply I want to let you know that the insurance company uses all these things and they use them in the ways we discuss to raise your insurance premium.
So if you’re like me and you don’t like paying extra money when you don’t have to watch our other videos about when to file a claim and when not to file a claim and stop speeding and getting traffic violations. All of those things together will keep your rates low.