Car insurance policies in Canada all contain personal injury coverage. There may come a time that an incident occurs and you need to file a claim under the personal injury coverage portion of your policy. For example, if you get injured in a car accident or you injure someone else in an accident that you are deemed at fault for, you will need to file an insurance claim. But how does this type of claim impact your insurance premium? We explain this in detail below.
Personal injury claims and car insurance
If you get into an accident as a driver, then you might need to file a claim with your car insurance provider. Beginning the claim process might seem intimidating, but it’s easier than you might think - especially if you enlist the help of a BrokerLink insurance advisor.
We always recommend contacting your insurance broker after an accident, as they can explain how the claims process works and walk you through it. A broker can also help you figure out what type of coverage you will file your claim under, whether it’s accident benefits coverage, third party liability car insurance, or another type of coverage altogether. Keep in mind that if you file a claim for a risk that you are not covered for, your claim may be denied. Learn more about how insurance claims work by reaching out to BrokerLink today.
Now, generally speaking, there are two categories of insurance claims: general claims and collision claims. If you are filing a personal injury claim, then it will likely fall into the latter category of collisions. General claims are those that do not involve collisions, e.g. theft, vandalism, or fire claims, and these are usually filed under the comprehensive car coverage portion of your policy if you opt to include this type of coverage in your policy. General claims typically do not impact car insurance premiums since they are rarely the policyholder's fault. That said, if you make many general claims with your insurance provider, they could decide to increase your premium or even cancel your coverage.
Moving on to the second category of claims: collision claims. As mentioned, collision claims are most relevant to personal injury claims because personal injuries usually result from car accidents. You can find a list of common car accidents here. Unlike general claims, collision claims can significantly impact your auto insurance rates, especially if you are determined to be at fault for the accident. Continue reading to learn more about how fault is determined in car accidents and how different types of accidents can impact your rates.
How car accidents impact auto insurance premiums in Canada
Since collision claims usually have the largest impact on car insurance rates in Canada, we are going to dive deeper into the topic now. First, whether or not you are at fault for the accident will directly influence if and how your rates are affected. At-fault accidents tend to increase insurance premiums, whereas accidents you are not at fault for may have no impact whatsoever.
To determine who is at fault for an accident, your insurance company will investigate the claim according to the government guidelines in your province. In almost all cases, one driver will be found to be at fault for the accident. Although it’s possible for both parties to be deemed partially at fault, one party is usually deemed more at fault than the other.
Not-at-fault accidents and car insurance premiums
If you get into an accident and you or someone else is injured, but the insurance company determines that you were not at fault for the accident, then your rates aren’t likely to increase after you file a claim. That said, a police report may be required for the insurance claim, so be sure to ask a broker to ensure that you have all the evidence you need in order to submit your claim and receive a payout successfully.
At-fault accidents and car insurance premiums
If you get into a collision and you or someone else is injured, but the insurance company determines that you were at fault for the accident, the story will look a little different. Mainly, your rates are far more likely to increase if you are found to be liable for the accident. You will likely notice this insurance premium hike the next time that you go to renew your policy. You can expect to pay a higher rate until the accident is no longer on your driving record, which can take up to six years in some provinces.
Other circumstances that impact how your car insurance rates are affected by a personal injury claim
Beyond simply being at fault or not at fault for an accident, a few other circumstances might come into play when an insurance company determines how your rates will be impacted following an accident. For instance, your rates may not be impacted if you need to file a personal injury claim after getting into an at-fault accident but have a clean driving record or accident forgiveness coverage. Continue reading for a breakdown of factors influencing how an insurance company adjusts your rates following a personal injury claim.
A clean driving record
A clean driving record is the first circumstance that can minimize the impact of an at-fault accident claim. Note that a clean driving record usually has not had any infractions, claims, or convictions in the last six years. If this is the case for you, your insurance company might be willing to only marginally increase your rates or not increase them following an at-fault accident.
A second at-fault collision
Oppositely, if you are found to be at fault for a collision and then are involved in a second at-fault collision within the next five years, you can rest assured that your rates will increase considerably. Two at-fault accidents in a five-year period make you a much riskier investment for the insurance company. As such, you can expect your premium to rise much higher than even after one at-fault accident.
Accident forgiveness coverage
If you have accident forgiveness coverage as part of your car insurance policy, and the personal injury claim you want to file is for your first at-fault accident, your rates may stay the same. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim. With this type of optional coverage, your insurance company would not increase your rates following your first at-fault accident so long as the accident is eligible for this type of coverage. Please note that coverage varies by province.
A personal injury claim won’t always result in a premium hike
Finally, it is worth noting that insurance claims, such as personal injury claims, do not always increase your premium. There are several circumstances in which your premium will remain the same even after filing a personal injury claim. For example, if you have a clean driving record, accident forgiveness coverage, or are not at fault for the accident, your rates will likely stay the same.
That said, if your rates increased following a personal injury claim and you aren’t satisfied with your new premium, consider reaching out to a BrokerLink insurance advisor for help. One of our licensed brokers would be happy to review your current policy and then research what else is out there to find you the most competitive rate for your coverage.
Why your claims history is so important to an insurance company
The reality is that no matter what type of claim you file, it will end up in your claims history. A claims history is essential, as it is one of the factors that an insurance company uses to determine your premium. Thus, the amount of car insurance claims you file can impact how much money you pay for auto insurance.
Why does your claims history matter? It gives an insurance company an indication of what type of driver you are. More specifically, it shows them how at-risk you are for collisions and other kinds of incidents. The more claims on your record, the riskier you are considered to be. As such, your premium might be higher if you have lots of insurance claims.
That said, not all car insurance claims are created equal. For example, general claims may be considered lower risk than collision-related claims, especially collision claims for at-fault accidents. Further, the dates of the claims on your record also matter. If the claims were all made very recently, your premium might be higher than if the claims were filed several years ago or farther apart.
Other factors that influence car insurance rates in Canada
Please note that your claims history is only one factor that influences car insurance rates in Canada. There are many other factors that come into play, such as those listed below:
- Where you live
- Age
- Gender
- Vehicle type
- How you use your vehicle
- Driving record
- Driving experience
- Prior insurance coverage
- Number of kilometers you drive
- Type of coverage on your policy
- Your deductible(s)
Given how many factors influence car insurance premiums in Canada, the best way to determine how much a policy will cost you is to contact BrokerLink for a free insurance quote. An insurance broker at BrokerLink will assess various factors related to you, including your claims history, to provide you with an accurate and reliable estimate.
Learn more about personal injury claims and how car insurance claims impact insurance rates by contacting BrokerLink
If you want to learn more about how to file a personal injury claim, how claims impact premiums, or how to cancel a personal injury claim, contact BrokerLink today. Call us or visit us in person at any one of our 200+ locations across Canada. When you get in touch, don’t hesitate to also ask for a free quote. Our quotes are accurate, reliable, and have no strings attached.
At the end of the day, BrokerLink will ensure that you find a customized policy that meets your needs and doesn’t break the bank. We can help you find all types of auto insurance, including liability car insurance, accident benefits coverage, collision coverage, and much more. Get started on your car insurance journey today by speaking directly with a licensed insurance advisor.
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