UPDATED: Mar 13, 2020
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Maybe it’s bad luck. Maybe you’re a bad driver. Whatever the reason is, you may be required to make multiple car insurance claims in a year.
How many car insurance claims can you make in a year? Is there a limit to how many auto insurance claims can you make in a year? Today, we’re explaining everything you need to know about annual limits on car insurance claims.
Most Insurance Companies Have No Specific Limit for General Claims
As long as you’re making insurance claims for legitimate problems, and you have valid car insurance at the time of the incident, most insurance companies have no specific limit on insurance claims.
Most insurance companies do, however, have limits on at-fault insurance claims. If you have two or more at-fault insurance claims in a three-year period, then your insurance company will label you with ‘multiple claims’ status. Your car insurance rates will certainly rise, but your policy may also not be renewed.
It doesn’t matter if your claims are one hour apart, one week about, or two years apart: if you make two at-fault claims within a three-year period, then your insurance company will treat them as “multiple claims” on your claim record, and your insurance company could cancel your renewal because of it.
Downsides of Making Multiple Insurance Claims
If you are making legitimate insurance claims for covered incidents that were not your fault, then there’s no real downside to making multiple insurance claims.
Remember that no insurance claim is ‘free’. With all insurance claims, you will be required to pay your deductible, which can range from $250 to $1,500, depending on your policy.
If you’re making an insurance claim to repair a broken mirror, then you’ll still pay a $250 deductible even if the repairs only cost $300. Don’t be fooled into thinking you can make an insurance claim for every minor issue with your vehicle and get insurance to cover it for free.
It’s also important to remember that your insurance premiums may rise every time you make a claim. This is more common for at-fault claims. If you make more than three comprehensive coverage claims within a three-year window, however, then your insurance company may still raise premiums.
Not All Claims Are Treated Equal
Insurance companies treat different claims in different ways. An insurance claim for striking a deer with your vehicle, for example, will be treated differently than an insurance claim for an at-fault accident where you injured a minivan full of people.
Based on the amount of damage and who is at-fault, your claim will be separated into one of the following categories:
At-Fault Claim: An at-fault claim is a claim for an incident where you were at fault. If you got into an accident that occurred as a result of your actions, then your insurance company is required to pay any damages from this accident. It’s considered an at-fault insurance claim, and it will be treated differently than other claims. One at-fault claim will cause insurance premiums to rise. Two at-fault claims within a three-year period, meanwhile, may be grounds for non-renewal of your insurance policy.
Not-At-Fault Claims: If you get into an accident, but the accident was caused by the other driver, then you would make a claim through the other driver’s insurance company (if you live in most states) or through your own insurance company (if you live in one of 12 no-fault states). Your insurance company will treat these claims differently than at-fault claims, and there will not be a limit on the number of not-at-fault claims made in a certain period of time.
Comprehensive Claims: Comprehensive insurance covers things like theft, vandalism, storm damage, or fire damage. Comprehensive claims generally do not impact car insurance premiums unless you file three or more comprehensive claims in a three year period. In fact, some states forbid insurance companies from raising premiums for one or two comprehensive claims.
Some Insurance Companies Ignore your First Claim
Some insurance companies will automatically ignore the first claim you make – assuming you have a clean record.
With some insurance companies, these ‘accident forgiveness’ policies come standard. With many insurance companies, however, you’ll need to pay extra to add it to your policy. Obviously, you must add the policy before your first accident. You cannot add it after your first accident and expect that first accident to be forgiven.
If you are worried about a single accident causing your insurance premiums to rise, then consider adding accident forgiveness to your insurance policy.
Aggregate limits are more common for health insurance providers. However, you may face aggregate limits with your car insurance.
Your car insurance policy may have a claim limit, which is the maximum amount your insurer will pay for each claim. Your policy may also have an aggregate limit, which is the maximum total amount your insurer will pay for your entire policy period – typically 6 to 12 months.
If you have already exceeded your aggregate limit, then you may not be able to make another claim within the next 6 to 12 months. Generally, however, aggregate limits do not apply to car insurance. Or, the aggregate limits are so high that they’re not applicable for standard car insurance claims.
How to Avoid Multiple Claim Penalties
Getting penalized for making multiple claims is annoying. Sometimes, it causes your insurance company to cancel the renewal of your policy.
There are two ways to avoid multiple claim penalties:
Pay for Claims Out of Pocket: There’s no rule stating that you have to file everything as a car insurance claim. In fact, it may be in your best interest to pay for an insurance claim out of pocket.
If you have filed two or more comprehensive coverage claims in the last three years, or if you have filed one or more at-fault insurance claims in the last three years, then it may be in your best interest to pay for your next small claim out of pocket. Check with your insurance company to make sure this is the best option.
Insurance companies may cancel the renewal of your car insurance policy if you make two or more at-fault claims (for at-fault accidents) within a three-year period. They might also raise insurance premiums if you make three or more comprehensive insurance claims within a three-year period.
Generally, however, there’s no limit to the number of car insurance claims you can make within a year – as long as they’re not at-fault claims.
Policies vary between insurance companies and states. Check with your insurer to make sure you understand any potential claims limits.