Car insurance rates depend on many factors. In most cases, insurance companies consider how likely it is that they will have to pay out a claim to you. Various reasons exist for this, such as the value and type of car you have. If you damage another person’s property, and the insurer pays for it, your rates could go up, as well. Why does this happen?
Filing a Claim Increases Risks
Any time you have to file a claim with your auto insurance company, the company raises your risk level. Individuals who file a claim are more likely to file another claim in the future. As a result, it is likely your rates will climb because the insurer has a higher cost risk by insuring you.
There are a few limitations here, though. Many insurance companies do not raise rates the first time you file a claim. This is especially true when the incident is not your fault or when there was no malicious intent. However, if you prove to be a reckless driver, this is different. In this situation, your agent may cancel your policy or raise your rates depending on the incident.
Fault Matters Here
You are in a car accident in which another car hits you. Your vehicle moves to the side suddenly, damaging a person’s home. You did not cause the damage to your car. Therefore, your insurance company likely won't hold your responsible for any of the damage. Your car insurer is likely to work to get compensation from the driver of the other car to cover the damage to both your car and the home as well. In short, your insurance company works to defend you here. If you are not at fault, your rates are not likely to go up. Most of the time, the police determine fault at the scene.
Your Record Matters, Too
As noted, reckless driving charges are likely to increase the likelihood your car insurer will raise your rates. This means if your driver’s license has more points on it because of the incident, you may end up paying higher rates.
The good news is your auto insurance agent is likely to be fair. They'll help you look for ways to still save on your policy as you can. In some cases, you may be able to get your rates to come back down over time, too, by being a safe driver.