Skip to main content

The Real Cumulative Cost of an Auto Insurance Claim

Close up to auto insurance application form with pencil on top

Understanding how much car insurance claims typically cost involves taking a look at the complicated world of car insurance, where many things can affect the numbers. Freeway Insurance is a company well known for making sure that drivers across the United States have good insurance coverage. The average cost of auto claims is important to both insurance companies and people who have insurance. It helps us see how much money accidents and other problems on the road can cost. Freeway Insurance helps customers deal with the complicated process of making car insurance claims. This article will talk about the things that make car insurance claims cost a certain amount, and will also show how Freeway Insurance works to protect its customers’ money and peace of mind in this area.

What Is A Car Insurance Claim?

A car insurance claim is like asking your insurance company for help when something bad happens to you and your car. It could be an accident, theft or storm damage, for example. When you file a claim, you are telling your insurance company what happened, and you expect them to take care of the costs of fixing your car, medical bills or other expenses, as long as the rules of your insurance plan are met. Car insurance claims are important because they help you feel more confident when unexpected and costly problems arise with your car.

Immediate Costs of an Auto Insurance Claim

When you have to deal with an auto insurance claim, it can be surprising how quickly the bills add up. Right off the bat, you might have to pay your deductible, which is the amount you agreed to when you got your insurance. There’s also the possibility of shelling out money for a rental car and any immediate medical or car repair costs from your own pocket. It’s essential to grasp these initial financial hits when you’re going through a tough situation to make smart choices.


When you have a car insurance claim, one of the first costs you will face is called a deductible. Think of it as a participation fee. This is the amount of money you have to pay out of your own wallet before your insurance company will help you pay the rest of the claim. For example, if your claim costs $2,000 and your deductible is $500, you pay the first $500 and your insurance covers the remaining $1,500. Deductibles can vary depending on the insurance plan you choose, and if you choose a plan with a higher deductible, it usually means you will pay less for your regular insurance, but you will have to pay more if you ever have to make a claim.

Increased premiums

When you make an insurance claim after an accident, especially if it is your fault or a large claim, there is a chance that your insurance company will charge you more for your insurance in the future. This is called a premium increase. So, even if you get help with your current claim, you may end up paying more for your insurance later on. The amount depends on the severity and frequency of claims. Simply put, more claims or more serious claims can make your insurance cost much more.

Out-of-pocket expenses

Sometimes, even after paying the deductible, there may be other expenses that your insurance does not cover. These are called out-of-pocket expenses. For example, if your policy does not cover a specific type of damage or if the repair costs are higher than what your policy covers, you will have to pay these additional costs yourself. These expenses can quickly add up and become a financial burden when you have to deal with a car insurance claim.

Car rental expenses

If your car is in the shop because of an accident or covered loss, you may have to rent a car to get around. Renting a car costs money, and is another cost you could face during an insurance claim. Some insurance plans include rental car coverage, while others may require you to pay for it separately. It is important to know the rules of your policy, because the cost of renting a car may increase depending on how long you need it and the type of car you choose. Insurance companies often have specific rules about the type of rental car they will help you pay for while your car is being repaired.

Factors Influencing Car Insurance Claim Cost

Car insurance claims can cost different amounts, and this depends on a few things. One important factor is the type of insurance you have. If you have comprehensive insurance, which covers many things, such as theft and storm damage, the cost of claims may be higher because it covers more. But if you have liability insurance, which only covers damage you cause to others and their things, the cost of claims is usually lower because it covers less.

Location and its Impact

The place of residence is another factor that can influence the cost of claims. In cities with a lot of traffic and people, there are more accidents and thefts, so claims tend to be more expensive. Sometimes bad weather, such as storms, can also make claims more expensive. So if you live in a big city or a place with a lot of bad weather, your insurance may cost more. But if you live in a quiet area with fewer accidents and bad weather, your insurance may cost less.

Driver’s Record and Age

Your personal history and age can also influence the cost of claims. If you have had accidents or broken traffic rules before, your claims may cost more because you are considered a riskier driver. But if you have always been a safe driver, claims tend to be cheaper. Age also matters. Young and novice drivers tend to have more accidents, so their claims may cost more. But older, more experienced drivers tend to have cheaper claims because they are safer on the road.

Many simply think, “Well, I’d need to pay my premium,” but that’s not the entire truth. The cost of filing a claim may not be immediately apparent to all drivers, but a recent study shows that paying your premium is just the tip of the iceberg. Even in ideal circumstances, a single accident may cost you hundreds annually in increased insurance rates. The national average increase in car insurance premiums after filing a single $2,000 claim was a staggering 41%.

Drivers in California are in an even more disadvantageous position. While 41% is the national average premium increase, in California, that number is a bit higher. A single $2,000 claim could increase your premiums by an average of 86%. Even drivers in Maryland suffer an average increase of 22%, the lowest state-wide average in the country. If you apply those averages to the National Association of Insurance Commissioners’ average car insurance premium of $815, the financial damages become a little more tangible – a single accident could cost you $335 annually in increased premiums.

The math behind these premium increases are based on the assumption that a driver who is in an accident is more likely to be in a second accident. Luckily, that doesn’t happen to everyone, but if someone is forced to file a second claim, their insurance policy’s premium will skyrocket a national average of 93%, nearly doubling the cost of their insurance premium.

With high average auto insurance quotes, California is at a huge disadvantage. They also top off this list of the five states with the highest average increase in premiums after a single $2,000 claim.

1. California: 86% average increase
2. Massachusetts: 83% average increase
3. New Jersey: 69% average increase
4. North Carolina: 58% average increase
5. Minnesota: 52% average increase

To give that list a little bit of context, here are the five states with the lowest average premium increase…

1. Maryland: 22% average increase
2. Michigan: 25% average increase
3. Montana: 27% average increase
4. Oklahoma: 27% average increase
5. Mississippi: 28% average increase

Impact on Eligibility for Coverage

Even in the states where a claim might not make your rates skyrocket, the added costs can still add up to hundreds of dollars over the course of a few years. These rate increases are often expected to last between three and five years, giving your plan plenty of time to cost you hundreds of additional dollars before your premiums go back down, even if you don’t file a second claim during that time.

If Your Rates Increase, What Can You Do?

Well, the first course of action would be to shop around and compare competing auto insurance rates. Every policy is different, and what you need from your insurance company may have changed since you originally purchased your policy, so why not shop around for something more fitting your lifestyle, budget, and needs? Contact us today and our experts would be more than happy to answer any of your questions and help you find a car insurance plan that’s right for you.

Get Help From Freeway Insurance When Faced with Claims

When faced with the complexities of insurance claims, it’s often wise to seek professional guidance. At Freeway Insurance, we’re here to provide expert advice and assistance to ensure you navigate the claims process with confidence. Our experienced team understands the intricacies of insurance claims and can help you maximize your coverage while minimizing your financial burden. 

At Freeway Insurance, we prioritize your peace of mind by making sure you get the ideal coverage at a cost that fits your budget. Before embarking on your journey, it’s essential to confirm that your auto insurance is tailored to your needs. You have the option to obtain a swift online quote, reach out to us at (800) 777-5620, or visit one of our nearby offices.

Ready to Get a Quick Quote?