What is one potential consequence of a high claims history for a driver?

A high claims history typically indicates that a driver is perceived as higher risk by insurance companies. As a consequence, these companies may respond by increasing the driver’s insurance rates to account for the expected higher cost of covering potential future claims. This adjustment reflects the insurer's need to balance its financial risk with the likelihood of incurring costs associated with the driver’s past claim history.

While lower premiums, eligibility for discounts, and increased coverage options might seem appealing, they are unlikely outcomes for someone with a significant history of claims. Insurance providers generally reward safe driving behaviors and low claims frequency with lower rates and discounts, whereas a high claims history can have the opposite effect, leading to higher costs for the insured driver. Thus, the correct understanding of the relationship between claims history and insurance premiums is vital for anyone preparing for a career in automobile insurance.