You've paid a truckload of money for your car insurance for the last 20 years and never had a claim... Now, after one accident that is your fault, your insurance company raises your rates by 40% for the next 3 years.
How can they do this?
Many insurance companies subscribe to and follow the rules of the "Insurance Services Organization" commonly known in the industry as the ISO. The ISO is a watchdog type of organization that follows insurance court rulings, keeps massive statistics, and makes policy language and other recommendations to their subscribers, including the amounts to surcharge after an accident.
Over the past 30 years, surcharge rates for many insurance companies have changed, but it has been very common to see rates increase by 40% when someone has an at fault accident. There are many theories surrounding this increase including:
1. Statistically speaking, when you've had an at-fault accident, your propensity for another at-fault accident in the next three years increases substantially.
2. There may be a claim cost recovery element built into this surcharge.
3. Your insurance company knows you are probably stuck with them for the next three years - so they can get away with increasing your rates.
a. The reason you are stuck is because your accident will go on a national insurance data-base, thus making other insurance companies less likely to want you as a new customer until your accident is 3 years old.
What can you do to protect yourself?
A. Be informed by asking your agent for a surcharge disclosure statement. This is a black and white document that shows how much your surcharges will be. Then shop for a company that has a small surcharge (averages around 12%).
B. Be careful of some agents who may change you from company to company while telling you "everything is the same." When you look at the fine print - including surcharge details - you'll quickly discover that there are plenty of differences between companies.
C. Finally, look for a company that rewards good drivers with a bona-fide accident free discount program. Some of these companies include an "accident forgiveness" program that wipes out any surcharge after you have been an accident free client for a certain number of years.
A good agent will be able to clearly explain and show you the details on their accident surcharge policy. You don't want to discover this - after the accident it is too late.
Mark has been an award winning insurance agent in Burnsville, MN for the last 32 years. Call his office at (952) 895-9999 for an insurance quote today!
Mark Arens has been an award-winning insurance agent in Burnsville Insurance, Minnesota since 1981. Call his office at (952) 895-9999 today! For more info visit this website www.burnsville-insurance.com
Article Source: http://EzineArticles.com/expert/Mark_A_Arens/1657604
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