Experience I am a Certified Insurance Counselor and have been in the insurance business since 1990.
Organizations Society of Certified Insurance Counselors and the Society of Financial Professionals.
Education/Credentials BA from Missouri Baptist University, and I hold six professional designations.
Awards and Honors 1990 Rookie of the Year, Gold Seal Agent, Top Producer for auto, home, life, and health insurance for AAA Auto Club of Missouri and Anthem Blue Cross of Missouri.
Question If I file an auto claim with StateFarm, am I obligated to stay with them for a certain amount of time after? I've been with StateFarm for almost 15 years and the only claim that I will file with them will eventually cost me $980 ($500 deductible + $480 in raised fees over 3 years) for a repair that is quoted to be no more than $1500. I'm planning on switching to AllState where at least they have some added benefits like accident forgiveness, safe driving bonuses, etc. Thank you in advance for answering my question.
Answer Hi Stu,
You are not obligated to stay with State Farm. All though ALL insurance companies handle claims in a similar fashion as it relates to surcharges/merit rates for chargeable accidents. Most companies have a forgiveness threshold of under $600-$1,000, after that, you are surcharged for 3 years, starting from the date the surcharge is added to your policy, not 3 years from the date of the loss.
Companies have many fancy ways to deal with this issue, when you hear the term accident forgiveness, usually what they are saying is that they will not surcharge you for accident, but they will remove any accident free discounts you have, or possibly move you to a different tier, so your cost will still go up, just not as much, but there is no free lunch in the insurance industry.
I am a big fan of high deductibles on your auto policy, so you avoid this situation, and use your insurance for a major claim. Keeping in mind there is always a chance when you car is in an accident, that it will be the other parties fault, and you will not have to pay anything, nor will you be surcharged for it, so another reason to consider high deductibles.
State Farm is a good company and so is Allstate, and most of your top property and casualty companies are. The relationship should be between you and your insurance professional, and hopefully he or she is delivering legendary service, and if not, then find one that will.
I wish the best with your claim, and future insurance experience!
