Your Auto Insurance Premium Changes Based Upon Insurance Points When You File A Claim

many factors affect your auto insurance premium when you file a claim, but North Carolina sets strict limits on how much that can be

Your Auto Insurance Premium Changes Based Upon Insurance Points When You File A Claim
Image: NCCC
September 21, 2018

Filing a claim with your auto insurance company will usually leave you paying higher premiums. But it might not be so bad depending upon your auto insurance company, any insurance discounts offered, the amount of the claim, and the number of insurance points you've accumulated.

some of the lowest auto insurance rates in the country

North Carolina drivers enjoy some of the lowest auto insurance rates in the country thanks in part to the regulation of the industry by the North Carolina Department of Insurance. In fact, North Carolina auto insurance rates are so low that companies attempt to register their company vehicles in the state in order to save money on auto insurance.

state regulation of auto insurance rates

North Carolina has a relatively unique way of regulating auto insurance companies. The state insurance commissioner sets the maximum auto insurance premium for all auto insurers after the companies collectively propose a rate increase or decrease. Auto insurance companies can charge a lower premium in an effort to attract customers, but they can't charge more than the set rate.

Factors affecting the increase to your auto insurance premium

It really all depends on which auto insurance company you use and the number of insurance points you've accumulated. With some auto insurance companies, your rate could increase a lot. On the other hand, it might increase very little if the company is offering discounts and is competitve. Larger insurances examine multiple factors, such as your complete driving record, the number of claims you've made, and the dollar amount of the claims.

auto insurance premium increases and insurance points in North Carolina

North Carolina discourages bad driving by assessing points on driver licenses. Based upon the severity of the infraction, the driver will be assessed a number of points on the license. Drivers may be assessed separate insurance points per infraction or accident, which are set by the North Carolina Department of Insurance and determine how much an auto insurance company should increase your premium. North Carolina does limit the premium increases for minor infractions, but drivers with one at-fault collision can see rate hikes of 30%.

no auto insurance rate hikes for very minor at-fault accidents

A one point accident involves limited damages (see chart below). In these cases, there is no auto insurance premium increase if the following occur:

  • The driver was not convicted in court of a traffic violation related to the accident;
  • No other licensed driver in the household has a moving violation conviction or at-fault accident during the three-year period preceding the date of auto insurance application of preparation of auto insurance policy renewal; and
  • There was no personal injury.

If you do receive a citation relating to the accident, you can usually have the charge dismissed by getting a letter from your auto insurance company stating that they assume financial responsibility for the accident. If you are unable to avoid the charge, you will be assessed the higher number of points for either the violation or the accident, not both.

An attorney can help you avoid an auto insurance rate hike

If you have been charged with a driving offense, you should consider a lawyer to help you reduce or dismiss the charges. Reducing the number of insurance points you are assessed can save your hundreds or thousands of dollars over several years. Do you need a lawyer? Use our online North Carolina Law Directory to locate a lawyer.

How Long Will the auto insurance premium Increase Last?

When you file a claim, know that the premium increase assessed by your auto insurance company won't be permanent. In North Carolina, the period is approximately three years. But don't think you can just switch insurance companies and reduce your rate. Those insurance points will follow you from one company to the next.

Auto Insurance Point Schedule in North Carolina

12 Insurance Points
  • Manslaughter or negligent homicide
  • Prearranged highway racing or knowingly lending a motor vehicle for prearranged highway racing
  • Hit-and-run resulting in bodily injury or death
  • Driving with a blood-alcohol level of .08 or more
  • Driving commercial vehicle with a blood-alcohol level of .04 or more
  • Driving while impaired
  • Transporting illegal intoxicating liquor for sale
10 Insurance Points
  • Highway racing or knowingly lending a motor vehicle for highway racing
  • Speeding to elude arrest
8 Insurance Points
  • Driving during revocation or suspension of license or registration
  • Aggressive driving
4 Insurance Points
  • Reckless driving
  • Hit-and-run resulting in property damage only
  • Passing a stopped school bus
  • Speeding in excess of 75 mph when the speed limit is less than 70 mph
  • Speeding in excess of 80 mph when the speed limit is 70 mph or higher
  • Driving by a person less than age 21 after consuming alcohol or drugs
3 Insurance Points
  • At-fault accident resulting in death or total bodily injury (to all persons) of more than $1,850; OR resulting in total property damage (including damage to insured’s own property) of $3,085 or more. Accidents that occur on or after October 1, 2017, that result in total damage to all property, (including the insured’s own), of $3,850 or more
  • No Insurance Points will apply for bodily injury if the medical costs were incurred solely for diagnostic purposes.
2 Insurance Points
  • Illegal passing
  • Following too closely
  • Driving on wrong side of the road
  • At-fault accidents that occur on or after March 1, 2016 and prior to October 1, 2017, resulting in total property damage (including damage to insured’s own property) over $1,850 but under $3,085. Accidents that occur on or after October 1, 2017, resulting in total property damage (including damage to insured’s own property) over $2,300 but less than $3,850
  • Speeding more than 10 mph over the speed limit at a total speed of more than 55 mph and less than 76 mph
  • Speeding 10 mph or less over the speed limit in a speed zone of 55 mph or higher
1 Insurance Point
  • All other moving violations
  • Speeding 10 mph or less over a speed limit under 55 mph
  • At-fault accident resulting in bodily injury (to all persons) of $1,800 or less; OR resulting in property damage (including damage to insured’s own property) of $1,850 or less. Accidents that occur on or after October 1, 2017, resulting in total property damage (including the insured’s own) of $2,300 or less
  • No Insurance Points will apply for bodily injury if medical costs were incurred solely for diagnostic purposes.

How Much Will my auto insurance rate Go Up?

Once again, many things influence this decision: who was at fault, whether or not there were injuries, whether or not there was significant property damage, whether or not alcohol was involved, and whether or not anyone was speeding. You can use the following as a guide:

At-Fault Auto Insurance Rate Increases

30% 1 Insurance Point
45% 2 Insurance Points
60% 3 Insurance Points
80% 4 Insurance Points
195% 8 Insurance Points
260% 10 Insurance Points
340% 12 Insurance Points

should you file an auto insurance claim?

This decision is ultimately yours to make. If your damages are below the cost of your deductible, it would make sense not to file a claim with your auto insurance company. If it's close to the deductible, you can estimate how much your premium will increase based upon the total damages. Don't forget that the total damages include damage to other vehicles, property and people, not just you unless fault cannot be determined.