Specifically, increased premiums.
Let’s say you’re in an accident that causes, oh, say, $900 damage, at your fault. If your company doesn’t drop you, your premiums will go up.
The question–does the increase in premiums generally (approximately) equal to, greater than, or less than they payout that you incurred?
(No, I am not the person in question. I was the person who received the damage.)
Though sometimes the case it isn’t always. I had claims on my Auto Insurance (State Farm) and they didn’t go up.
But maybe I was lucky. But I had even got two tickets a few years later and still no raise.
Of course that was in the late 80s
The short answer - it depends.
Insurers surcharge, increase premiums, for accidents, unless you’ve been with an insurer for some period of time which allows forgiveness for the first at-fault accident. The surcharge is predefined and on file with the state insurance commissioner. If you exceed the threshold for surchargability, usually $500 depending on the company and risk group, then your policy is surcharged.
As stated previously, the surcharge depends on a few factors. Yes it’s predefined, but you may get a “preferred” point, no surcharge or a regular surcharge. “Preferred” points are surcharges companies give to existing policyholders than are less than surcharges for new policyholders. The idea is, you’re going to be surcharged elsewhere if you shop, but their “preferred” point surcharge will be less ensuring that you stay with them. More money and less likelihood of a better rate. Now they got you and tenured policyholders make more money. Most insurers lose money on new business for several years.
As far as the tickets go, some companies surcharge for tickets and some just underwrite for them. That means they aren’t going to increase your premium until you exceed their underwriting guidelines at which point they will cancel your policy or offer a rate with one of their non-preferred companies. For instance there is a difference in a State Farm Fire and Casualty rate and a State Farm Mutual rate.