How it works
Insurers price policies partly on your driving record and claims history, so an incident on your record can raise your price. The Texas Department of Insurance explains:
- Auto insurers can raise your premium if you have had accidents or traffic tickets, and for filing most types of claims.
- You could also lose a discount you were getting for being claim free, which raises the price even without a formal surcharge.
- Insurers learn about past claims through reports such as CLUE, even if the claim was with another company.
There are limits. In Texas, home and auto companies cannot charge you more for claims they did not pay, including denied claims, or for calling to ask questions about your policy or the claims process. Other states set their own rules on surcharges, so check with your state insurance department.
Before filing a small claim, compare the repair cost with your deductible. If the repair costs about the same as the deductible or less, a claim may not be worth it.
If your renewal premium jumps, ask the insurer which incident caused the change and how long it will affect your rate.
Related terms
Sources
- California Department of Insurance, Automobile Insurance Terms definition of surcharge
- Texas Department of Insurance, Will my premium go up if I file a claim? when premiums can rise, lost claim-free discounts, CLUE and what cannot raise your premium
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