Will making an insurance claim raise your rates?

Will making an insurance claim raise your rates?

Dec 21, 2018, 8:22:05 AM Business

Many people worry about increase in rates when they make claims for insurance policy. Even though this is true to a major extent, it need not happen in every case and there are ways to avoid this in the long run by choosing certain long term plans. Let us discuss about this topic in a detailed manner and try to understand how making claims can impact the insurance premium rates in future. If you want to know about any specific plan like Oriental Insurance India policies, you can directly get in touch with the company executives or call them to know about the status of your policy after making claims. They will do the calculation and inform you about any changes in rates in future.

How insurance companies change rates?

The basic thing you need to understand about insurance plans is that the companies offer the rates depending on the risk associated with offering coverage. Whether it is a health insurance plan or auto insurance plan, the company will always calculate the risk involved in that process and then decide on the rates for the policy. It is for this reason that you notice huge difference in rates from one person to another and also from one service provider to another in the market. If the insurance companies feel that the risk is reduced after offering the policy to the consumer, they may even decrease the rates for future renewals. This is what usually happens with no claim status and all such customers get discounts on the premium for next renewals. On the other hand, when customer has made a claim in the previous tenure, the insurance company will look into the scenario under which claim was made and then decide on the rates. In most cases, you can safely assume that rates will increase if you make a claim. However, the percentage by which it increases depends on the nature of claim and the amount for which claims are made with the insurance policy.

Increase in rates after making claims

In general, the rates for any insurance plan is likely to increase after you have made the claim. If the claims are repeated every now and then, the company can increase the premium for the next renewal by a huge margin. In terms of auto insurance, such clients are regarded as high risk and the company assumes that the customer is not very careful while driving when frequent claims are made for damages. In this situation, you need to check with the service provider about the change in rates and also get suggestions about avoiding them in future.

Decrease in rates with no claim status

It is also possible to reduce the premium on your next renewal when you have not made any claims in the entire tenure of the policy. Many people do not know about this and they will be surprised to discover that the no claim status will be valid for many years and you can keep on getting discounts on premium when you continue to have no claim status for many years. You can even carry the status to a new service provider and get similar or better discounts for your previous track record. The Oriental Insurance Company Limited and other reputed companies in the market often reduce the premium for such customers and it is also possible to carry the no claim bonus acquired with such companies to another service provider in future.

How to prevent increase in rates even after making claims?

It is possible to avoid any increase in rates even after making claims when you choose multi-year policies. Say for example when you have chosen a five year policy for your vehicle, the premium gets locked for the entire duration of five years and even when you make a claim in the first or second year, the premium remains same for the remaining tenure.

Tips to get the best rates for insurance plans

Everyone wants to save money when it comes to buying insurance plans and they always want to know about different ways which can help them in this regard. You can find some of the easy tips mentioned below and this will help you to get the best deals in the market. There is no need to do lot of research for this purpose as you can get all the required information from one platform. You can use the online portals of insurance brokers and get detailed information about various plans. They also provide special tools that will help you to calculate the rates of different plans. The best part about such services is that most of the things can be done from the comfort of your home and there is no need to visit any office to get such information about insurance plans.

Use online insurance calculator to check change in rates

Many people are not aware of the fact that they can get to know the rates of many plans without any hassles. All you need to do is to use the online insurance calculator for this purpose. This will help you to compare different plans available in the market. You need to provide the basic details about your existing plan when you are looking for policy renewal options. On the other hand, when you are looking to buy a new insurance policy from Oriental Insurance India or any other company, you can visit the official portal of the site or use the online broker portal to calculate the premium needed for the relevant policy. In this way, you can provide different set of inputs to know about any increase in rates if you have made claims in your previous tenure. In the same manner, you can also provide details about no claim status if you have any in the past and get to know about the discount available for such status.

Get official quotes from different sources

When you need clarity about the rates offered by different companies, you can get the quotes from them and compare the plans. The best thing you can do in this situation is to use the services of online brokers. They have permission to offer plans from multiple sources and you can easily get quotes from various companies from one platform. In this way, you need not worry about calling each service provider to know about the rates of every plan. It is also possible to filter the plans based on the rates and this is a good option when you want to select the suitable plan based on your budget. The Oriental Insurance Company Limited and other reputed companies offer such online quotes for the benefit of customers and you can even get to know the features of the policy in this manner.

Avoid claims for small damages

In the case of health insurance, when you are suffering from a minor problem that only requires outpatient treatment, you need not make a claim as this will help you to preserve the no claim status that will provide further benefits in the long run. Note that when you have this status throughout the tenure, your next premium will reduce by a significant margin and you can save lots of money in future. You should ideally preserve the coverage only for major health expenses.

The same goes with auto insurance and when the damage is very less, you can easily settle it out of court and avoid making claims. When you claim even a few hundred rupees out of your insurance policy, you will lose the no claim status and this can increase your premium for the next renewal. For this reason, you can try to avoid claims as much as possible for small issues so that you can get better offers in future.

Pay premium on time

When you pay the premium on time, there is no risk of the policy going into lapse and this will prevent various problems in future. Remember that when the policy has lapsed, you will be charged additional money as penalty and only then you will be eligible to get the insurance coverage from the company. Other than that, the company will even remove the no claim status if you have acquired any in the past when the policy has lapsed. In this way, your premium is likely to go up when you allow the policy to lapse. If the policy is in lapse condition for many years, the penalty will also go up and you have to cover up for the lack of insurance for all those years. In this regard, it makes sense to renew the policy ahead of time so that you can enjoy continued coverage without any hassles.

In this way, the rates can rise or fall depending on your previous track record. The same logic applies for most general insurance policies like auto insurance and health insurance. Always try to avoid making claims when the issue is small as this will help you to maintain the no claim status in the long run. Note that you should make the best use of the policy only for major events and this will provide complete value for your money in the long run. You can even avoid any increase in rates even after making claims by choosing the multi-year plans. Make the best use of such plans whenever they are available and lock the premium for many years.


Published by Daphenee Plaisir

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