Question: I contacted my car insurance to learn if sliding on ice into a railing during a snowstorm would cause my insurance to increase. If my rates would go up, I’d prefer to fix my car myself if the damage is $1,000 or less. My insurer wanted to get my ID, so I hung up. Why do they want my information and by giving it will my rates go up?
Answer: Your car insurance company wants your policy number and other information when you call in with a possible claim for a few reasons. One main reason is to determine if you have the right coverage for the incident. And, yes it’s possible that your inquiry could affect your car insurance rates in the future.
Why your insurer wants your information
When you call in with questions about a hypothetical or actual incident, your car insurance company doesn’t want to tell you if situation would or wouldn’t be covered based on the information you give about your coverage, which may be incorrect. By getting your information and looking at your policy, your insurer can give you more specific -- and accurate -- answers to your questions.
With your information in hand, your car insurance company’s representative can tell you if the incident would be covered, what deductible would be due, how to make the claim, and if it will affect your car insurance rates.
For example, this single-car accident of yours would be a collision claim and thus your collision deductible would be due before your collision benefits would start up. If your damage is below your deductible amount, then there is no reason to try and file a claim. And if you didn’t have collision coverage, you couldn’t make a claim.
Inquiring about an incident
Your insurance company may note your inquiry as a possible claim in their system. So, for this reason I understand why you hung up. You just wanted information on how much a claim might cost you in future insurance premiums, not an inquiry placed in your file.
If your insurer notes the inquiry on your claims history it could affect your future rates or ability to get insurance, even if it doesn’t result in a claim.
For instance, an insurer could say in the last two years you’ve had one accident and two inquiries about other incidents – this shows a risky pattern of behavior.
Not all insurers will take inquiries into account, and some state laws don’t allow it. For example, Texas recently outlawed auto and home insurers from canceling policies or raising premiums based solely on a customer inquiry.
What I normally recommend, for finding out what will raise your rates is to request a surcharge schedule from your car insurance company at the inception of your policy. A surcharge schedule details when and by how much your insurer can raise your car insurance rates.
If you have this on hand, then when something happens -- like your icy accident -- you can review the schedule to see if you will be surcharged (receiving an extra charge on your base rates) without making a call to your insurer.
You could still call and request a surcharge schedule, but unless your insurer will email it to you it will probably take too long to arrive in the mail for you to make a decision about your current situation.
Instead, you’ll likely have to call your insurer back and ask if a single-car accident due to icy condition with estimated damages of under $1,000 would affect your rates.
Your insurance company will again want your information to confirm you have collision coverage to cover the accident, determine your deductible amount and see if the claim would affect your future car insurance premiums.
You can ask if this inquiry -- since you need to make it clear you are not yet placing a claim -- will be noted, especially on your claims history. And you should ask if they could use the inquiry to rate you higher in the future or not.
Claim or not
I think it’s a great idea to see if this claim will affect your future rates before making a claim for your vehicle’s damages. I typically recommend that car owners take care of minor damages themselves and save claims for the high-priced, major accidents. This will help keep your car insurance rates down.
Also, if you want to pay up to $1,000 for an accident, then choose a higher deductible of $1,000. Doing so should lower your rates a bit.
And remember that even if you don’t claim for your car’s damages that since you hit a guardrail the entity that owns it could claim against your property damage liability coverage, and that claim could affect your future car insurance rates.
If this incident does raise your rates, remember at your next renewal period to compare car insurance rates with multiple car insurance carriers to see if someone is offering cheaper rates.