Here’s a good reason for your customers to buy extended service contracts: to avoid hikes in their regular auto insurance.
We all know that, but here’s additional evidence to cite.
Drivers pay an average of 38 percent more for car insurance after making a single claim, a new study by insuranceQuotes.com found. The size of the premium hike varies by state, with Massachusetts drivers paying the most, an additional 67 percent, and Maryland drivers the least, a 20 percent increase.
After two claims, the average increase in a driver’s car insurance is 86 percent.
“The biggest lesson for consumers is not to file a claim unless absolutely necessary,” said Laura Adams, a senior analyst at insuranceQuotes.com, said in a press release about the study. “Making a claim for a few hundred dollars doesn’t make sense if your premium is going to skyrocket as a result.”
Or here’s another lesson for consumers: If your car needs repair after an accident, it’s probably cheaper overall to tap your extended service contract than your car insurance. That is, if you bought the extended service contract, right?
The full study, as well as a “Should I Make a Claim?” calculator, is available here.