It is common in the US and the UK to pay higher premiums for car insurance the year after a big claim is made or after multiple claims. This happens in India, too. If you make a big claim or repeated claims, insurers may increase your premium the next time your motor insurance policy is up for renewal. “Whether or not you were at fault, the number of claims you file have a direct impact on the rate hike in premium. The bigger the claim, higher the chances of a hike in premium the next year,” said Adhil Shetty, chief executive officer and co-founder, Bankbazaar.com.
But before you get into why premiums increase after a claim and how to avoid this, you need to start with understanding your motor insurance policy.