How do insurance companies recoup from claims?

Paddytheman

So had a tip last week, my fault and the other drivers claiming for repairs.

How does the insurance company recoup this cost, say it's €5,000, does my insurance simply increase until they have this amount recovered? Been told my discount will reduce from 75 - 60% which accounts for €300 per year, will there be any other major change to my policy?

Also if repairs to my car come to say €1000 should I throw this all in together or again how would they recoup this €1000, is there a standard formula for them recovering their outlay?

Thanks in advance.

Twenty Grand

We all pay.

rovertom

Paddytheman wrote: »

So had a tip last week, my fault and the other drivers claiming for repairs.

How does the insurance company recoup this cost, say it's €5,000, does my insurance simply increase until they have this amount recovered? Been told my discount will reduce from 75 - 60% which accounts for €300 per year, will there be any other major change to my policy?

Also if repairs to my car come to say €1000 should I throw this all in together or again how would they recoup this €1000, is there a standard formula for them recovering their outlay?

Thanks in advance.

There is no direct recovery of claim cost. A fatal accident could easily cost an insurer 1 million.
They will never recover that from the policy holder.
The loss of discount you mentioned might not fully account for changes in cost though. They can and will also come up with a higher base cost before discount meaning your yearly payment will possibly go up by more than the 300 you mention.
The claim will only effect you for circa 3 years so on balance, a 6k claim is not going to cost you 6k in increased policy pricing so I would certainly bundle everything into the claim as long as you have comprehensive cover to actually cover your own car.

Fanny Wank

Pooling of risk. They (in theory) charge enough across their entire portfolio to cover the average amount they expect in claims over 12 months (and also load to cover expenses, reinsurance etc) and let the law of large numbers work its magic

Like if you roll a fair die a very large number of times. The average value you'll get is 3.5 - yet on no single roll will you ever get a value of 3.5

Fanny Wank

Should be noted that claims history is usually (if not always) a rating factor. Their experience shows that people who claim are more likely (than the average policyholder) to claim again. Hence your premium goes up after a claim