Insurance Claims Processing

Always choose your auto insurance company with great care.  Giving them your money is the easy part but in the event of a claim you want to know you are dealing with an insurance company that expeditiously handles claims and doesn’t give you grief and drag claims on forever. 

No matter how great the savings, your insurance isn’t worth a nickel if you’ve got an insurance company that doesn’t pay out.  Check out an insurance companies rating before you buy.

As you’ve probably guessed paid claims make up the majority of any insurance companies expenses eating up around half of their revenue.  Here’s how your premium breaks down:  50% goes to pay claims, 25% goes to legal and administrative costs and 25% to the cost of running the company. 

What you might not know is that most of the claims paid out on car insurance actually goes towards property damage.  Collision claims only make up about 20%, while comprehensive makes up another 10% making up over half of all claims costs.  20% alone goes to medical and personal injury payouts.

That’s why you pay so much for collision and comprehensive coverage.  You can buy liability insurance for pennies on the dollar yet when the insurance company has to pay out these are usually large settlements.  Doesn’t make a lot sense does it?  Well actually it does. 

Because liability claims make up only a small portion of all claims the rates are less.  Because comprehensive and collision claims make up such a large percentage of payouts you are going to pay dearly because all those little claims add up real fast for the insurance company.

The administrative costs make up a good portion of where your premiums go.  There is a great deal of time spent processing and settling claim.  In fact administrative costs make up 25% of the insurance companies operating costs.  That’s very substantial!

So what does that mean to your premiums?  It means a great deal.  Insurance companies calculate their legal costs by figuring out their costs for each state.  If your state has a lower cost you’ll pay less, if you live in a state with high legal costs you are going to pay a lot more.

If you live in a no fault state drivers tend to pay higher rates.  The original concept with no fault insurance was a great idea but because of the high fraud rates relating to medical expenses premiums have skyrocketed. 

Unfortunately there is not much you can do to lower your premiums with no fault insurance as the costs are dependent on all claims processed regardless of driving history, accident history or any other factors.  Great news if you are a high risk driver because you’ll pay the same as a low risk driver.

One way for anyone to reduce their premiums some is to carry a higher deductible on their collision and comprehensive insurance.  Insurance companies don’t like messing around with small claims because per hour a small claim can add up to that of a larger claim. 

So they reward you by discounting you with higher deductibles which means you’ll deal with any damage that is in the deductible range.  Click Here to Save Money on Auto Insurance.

One thing to remember when choosing a deductible is your financial state.  There is no point in choosing a $1000 deductible if you won’t have the $1000 to fix the repair or to cover the first $1000 on a larger claim.  Choose a deductible that fits your income.

Spend some time comparing rates and companies online. Getting Online Insurance Quotes can save you plenty of time on the phone.  They are convenient and quick, and it makes it very easy to compare rates. 

So what are you waiting for?  Start comparing!