Why the heck does car insurance make you pay more...?

Question

when you call to file a claim? Like, why do they raise your rates when you call them to use their services that you're already paying for? Someone pryed the emblem off my friends car and he said if he claimed it on insurance his rates would raise just because he claims it. What's up with that?

Answer 1

Because you are paying for insurance for the really big claims.  If you claim for small things they are going to adjust your rates because you are now a higher risk.  Insurance companies make money by NOT paying claims.

Answer 2

When you file claims, that means that you are dipping into the funds. If you are the reason for the claims, ie. you caused a crash, then you are a risky person, & are charged more because you are likely to cause more claims to go out. That is why someone who has 5 speeding tickets & 3 crashes & 2 DUIs will pay more than someone without those similar faults.

Like the person above said, you should only claim stuff that is serious. A car emblem is not serious, its cosmetic & probably isnt even enough to cover your deductable, so its not worth the paper to process it for a $100 claim & you have a $500 deductable. That is a waste of both of your time.

As bad as many people make insurance companies out to be, the truth is most people dont understand how the insurance works. They dont raise your rates just because you called them about a service. They are not in the business of just denying claims, but they do deny things that are not covered. they will raise your rate if you cause an accident, but not just for being involved.

Answer 3

insurance claims are for big stuff.  Someone has to pay for it.

Think about it:  If you total your car and the insurance pays out, you are winning b/c the cost to the insurance company to pay for a totalled car is much higher than what you pay in premium.

That being said, something like an emblem peeled off a car is very frivilous and should be paid out of pocket

Answer 4

Becasue claims cost money to compensate and to adjust. If the insurer wants to stay afloat they have two choices, raise everyones rates or raise the rates of those who are a higher risk. Sometimes the insurers do the former in order to account for inflation and to prepare for anticipated increased costs for claims when new, more expensive technology is introduced (airbags save lives but they are expensive to replace!). However to be fair insurers raise the rates of those who claim big and/or often so that those who present a greater risk pay more than those who do not. As for your other assertion that insurers raise your rates when you call them for their service, I know of no insurer who does this.

Answer 5

Insurance is based on risk.

The higher the risk - the higher the rates.

That's why speeding - dui's etc. really affect your rates. If you get caught speeding - that shows that you drive in excess of legal posted speed limit. Speeding is a major factor many accidents. Therefore- a speeder is more likely to be involved in an accident than a non-speeder.  IE: higher risk = higher rates.

The most important thing to know is that all insurance rates are regulated by the state. Each state's department of insurance approves the rates that every carrier charges.

Answer 6

Your question could not be answered in one word.find useful tips here.http://car-insurance.online-tips.info/ca...

Answer 7

They are in business to make money. The more claims people file, the less money the insurance company makes. Raising your rates after you make a claim helps decrease the chances you'll make frivolous claims or file a claim to have something fixed that normally wouldn't be covered by your insurance.

Besides, unless your friend has no deductible on his policy, it's likely insurance wouldn't cover any (or much) of something as minor as an emblem (unless significant damage was done when it was pried off).