For example, if I get car insurance and get into an accident, why should that increase my premiums. I’m insuring against that risk, so the fact that I had an accident surely shouldn’t change by risk factors.
In: 7
Insurance companies bank on most policy holders not filing any claims and as such earn a distinct profit. When you file a claim, your policy is less profitable. To mitigate future losses, now that you have shown yourself to be a greater risk of filing, they want you to pay more, to cover their profits should you file another claim.
Latest Answers