Motorists have every right to make a claim for a loss that is covered in their policies. And auto insurance companies will reflect on those and make premium adjustments at next renewal. In some cases, it may be more than just an adjustment. They can actually refuse to renew the policy instead.
Although most states regulate under which circumstances they can decline to quote, these are not strict enough in many cases to prevent this practice. Furthermore, state insurance authorities can see it as one source in a large market where policyholders have plenty more options. So, car insurance non-renewal for too many claims is a permissible action in many states.
Another alternative is that they raise the premium a lot so as to force the policyholder to leave. Generally automobile insurers may be lenient after one in many years. That is why many of them offer accident forgiveness coverage. You will have to pay additional premium in most cases and you may need to have 3 – 5 years clean history to qualify for it.
When you have another incident in a short space of time they would not be looking at it lightly any more. Two or three claims may be seen as the indication of a trend that worries them. They cannot ignore the increased possibility of a large loss and they try to get out of the way before that happens.
Many people may have the idea that minor incidents don’t really matter. This is a misconception as they do matter and each one counts. For example, if you failed to stop in time to avoid the accident you may be considered lucky that the damages are negligible this time. The attitude an underwriter takes is “god knows what happens next time”.
Even if they are all for negligible amounts, three of them can be enough for non-renewal. They are good indications of a driver taking risks on the roads. What is the difference between a small and large one? If you think about it, both says the same thing that something was not right. One ended up being a lucky escape when the big one was not so lucky.
Some vehicle insurance carriers take too many recovery service calls into account as well, not just physical loss and liability claims. Say, you bought recovery service coverage from a carrier and made too many calls to them, plus you had one accident. It is an indication enough that you are doing a few things wrong. For example, you are not looking after your automobile well that it is becoming a real hazard.
Perhaps you need to think twice before you ask compensation for every little thing, especially if you can contain it. For example, you hit the corner of the automobile when you are coming out of the garage. Nobody else is involved and you can get a few estimates to get it repaired. Then, you can consider paying out of pocket after taking deductibles into account.
This would keep the total count low. If you have another large accident in the later months you can claim for that and hope that one will not be looked at harshly when the time comes to calculate renewal premiums.