I understand that when you’re involved in an auto accident, your insurance rates will go up. What I’m wondering is, does the amount of increase depend on the details of the accident? I banged up my car last friday, hitting a jersey barrier as a result of a loss of control caused by a mechanical failure. Are my rates likely to increase as much as they would if I had, say, been yelling at my drug dealer on my cell phone while beating my wife, run a stop sign, and t-boned a taxi full of nuns and supreme court justices?
I’m pretty sure your rates go up based on the cost of the claim (that would seem most logical) and also if there are any medical claims/people hurt and/or killed, I think it goes up the most because of the nature of the risk.
Details of the claim (other than who is at fault) don’t matter.
Most companies have a threshhold before the premium surcharge kicks in. If the threshhold is $1,000 then any damage you cause at or in excess of that amount triggers the surcharge (call it 10%). Drives me nuts that I can total a $1,001 Yugo or a $55,000 Lexus and still get the same increase, but that’s the way it is. I have never seen a company base the degree of the surcharge the amount of the claim.
The reason for this is to keep Ins Cos from manipulating the amount of the claim to reduce/increase a surcharge. The claims department needs to have NO pressure in that regard when determining the value of a claim. Otherwise the Gubmint will get 'em!
Also, because of the subjective nature of Bodily Injury(BI) claims, the amount of BI settlement does not play a part in determining the surchargeability of a claim. Only Collision and Property Damage are assessed.