Gianetta Palmer is a writer for, copywriter, and essayist. Her work has appeared in, Healthline, and The Dyrt Magazine. She is the author of Scrunchie-Fried and writes a lot about car insurance in her spare time.

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific car insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. She also specializes in automa...

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Reviewed by Melanie Musson
Published Insurance Expert

UPDATED: Mar 13, 2020

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Unlike other monthly bills, your car insurance premiums are directly dependent on your driving history and other factors associated with your risk to the auto insurance company. When a company insures a vehicle, it is insuring against the odds of that car being damaged; the higher the likelihood of a vehicle being involved in an accident, the higher the insurance rates. To this end, individuals are investigated based on their driving history, demographic information and the type of vehicle being insured.

Once you have obtained a car insurance policy, the auto insurance company will continually revise your rates based on your habits and history with the company. People who drive safely for several years will see their rates decreased. On the other hand, drivers who are involved in auto accidents or engage in risky driving behavior will have their rates increased.

Will filing a claim always make my car insurance rates go up?

Whenever you are involved in an auto accident, you run the risk of having your rates increased regardless of whether or not you report the accident to your auto insurance company. There are two main factors which can lead to your insurance company increasing your premiums: the amount of money they have to spend repairing your vehicle, and if you are at a high risk of being in another accident due to the first.

Car insurance companies must recover the cost of accident claims by increasing premiums. Sometimes, they raise these premiums across all customers. For example, certain catastrophic weather events such as hurricanes will lead to insurance rates rising throughout a geographic area, even for individuals who did not file a claim for damage. Similarly, certain ages and demographics of people pay more for car insurance than others due to the driving statistics for those people; teenagers and men under 25 pay the most for insurance because they are in the most accidents.

For the most part, however, your own driving record will affect your rates. The more a car insurance company pays for an accident under your policy, the higher your rate increase will be. Generally, rates will begin to increase for any claim over $500; this changes from one company to the next, but most keep around that number as the threshold.

At Fault Accidents

If you are not at fault for a car accident, your insurance may not be responsible to pay for the damage. If your insurance company is able to recover the cost of repairs from the other party’s insurance, your rates may not be affected at all. Similarly, if you file the claim but do not use your insurance, your rates should not be affected. Generally, if your car insurance company does not pay for your damage, your insurance will not go up.

Unfortunately, sometimes your rates will be increased even though you are not at fault for an accident. For example, if your vehicle is hit while parked and the other driver leaves the scene, you could end up seeing your rates increase as the auto insurance company could not recover the money it paid on your claim.

Risky Driving

The other reason your insurance may increase due to an accident is if you were engaged in any high-risk driving behavior. Even if your car insurance company does not pay for the damage, your rates may be affected if your accident was caused by partaking in dangerous activities. Drinking and driving, speeding, disobeying traffic laws or racing can all lead your rates to increase. In some situations your car insurance may even be canceled by the insurer if they deem that you are too risky to insure.

Whenever you are involved in an accident you should always report the claim to your insurance company. Even if you don’t want your vehicle repaired, you are required to inform the company about any accident you are involved in. If you file a claim that is not paid, your rates should not be affected. On the other hand, failure to report an accident could cause rates to increase or even investigations to be made against your policy if the insurance company learns about the accident after the fact.

If your rates are increase due to your driving history, you can usually repair the damage through maintaining safe driving habits. You can also temporarily increase your deductible until your rates begin to drop once more, or see if there are any other discounts you can take advantage of through your insurance company. It can take up to seven years for points against you to drop off of your driving record, but with safe driving you may be able to repair the damage earlier than that.