How do claims affect future rates?

Claims can impact rates and eligibility for certain coverages or discounts.

When it comes to powersport insurance, every time you file a claim, it can potentially influence your insurance rates and overall insurance profile. Insurance companies use claims history as one of the key factors to determine the risk level of a client. If you've had multiple claims, insurers might consider you a high-risk client, which could lead to higher premiums in the future. This is because they perceive you as more likely to file additional claims, which could cost them more money. Additionally, frequent claims might make you ineligible for certain discounts or special coverages that are only available to low-risk clients. On the flip side, a clean claims record could help you secure lower rates and qualify for discounts offered to safer drivers.

Imagine you're an enthusiastic dirt bike racer and you love pushing your bike to its limits. Last year, you filed a claim when your bike got damaged during a race. Then, this year, you had another claim when your bike was stolen. As a result of these claims, your insurance company has increased your premium for the next policy period. On top of that, the safe driver discount you enjoyed previously has been revoked due to your claims history. However, your friend, who has not filed any claims, continues to benefit from lower rates and multiple discounts.

If you're keen on keeping your insurance rates as low as possible, it's essential to be mindful of how often you file claims. While some situations absolutely warrant filing a claim, like significant damage or theft, consider paying for minor repairs out-of-pocket. This strategy helps maintain a good claims record, ensuring you remain eligible for the lowest rates and various discounts. Always assess the potential impact of a claim on your future rates before proceeding. Additionally, practice safe and responsible riding to reduce the likelihood of accidents, which can help maintain a clean claim history.