What's the point of even getting car insurance if they just make it more expensive when you actually need to use it?
You don't understand the concept of risk. When you have a loss that the insurance company must pay out on, they may not raise your rates, but if you have any more, you are too great a risk. They must charge you more or drop you, and the next company that will take you will charge you a higher rate because you are a greater risk. People that never file claims have the lowest rates.
They don't want you to use it.
Wait till you see what they do if you use it twice.
Clearly, you don't comprehend what insurance actually does. Just because the price goes up following a claim doesn't invalidate the system...it in fact protects the system. The greatest indicator of future performance of a risk is past performance. Its not the only indicator, just arguably the strongest one. Back to the numbers. Lets say you pay a crazy rate of $5k annually for one vehicle. That number seems huge right...but what happens when you have a serious at-fault accident and destroy a new Mercedes...do you have the cash to buy that other person a new car to replace the one you destroyed?? Will you really be upset about the $5k when they insurer pays out $100k??
It isn't stupid at all. It's a matter of risk. What you pay is based on your record. If you have a horrible driving record, your insurance will be a lot. The more tickets you get, the more crashes you cause, the more you pay. And after you smash into a telephone pole, why shouldn't it go up - their "risk" has gone up. Don't listen to that stupid commercial. They are assuming everyone is a dumb*ss. It's about risk.
Because the alternative -- having no insurance, then causing an accident that bankrupts you -- is worse.
The real point is in case someone else needs to use it. Because you could cause an accident in which someone else is seriously injured or killed and would have very large medical bills that you wouldn't be able to afford to pay.
Insurance costs are based on risk. Once you have an accident, your future risk just went up. The other option is that all rates are the same for everyone from the driver with 40 years of experience and not one accident or ticket to the woman who has had 3 at fault accidents in the past 18 months. Why should the first guy pay higher rates to cover the costs of the second woman?
That's not exactly true, but IF your rates increase it's because insurance companies have found that, statistically, people who make one claim are likely to make two, or three or more claims in the future. Insurance rates are all about statistics -- the likelihood of your making claims. People who make (or are likely to make) more claims pay more money.
As of January 1st, it is no longer required by law, unless you live in Massachusetts. (Well see how long that lasts). But, that's just what insurance companies do. Part of it is, once they have to process a claim, they have to pay for that claim, which costs THEM money, so they have to raise the price for YOU, to offset the cost they have to pay out for your claim. Or else, they'll go out of business, if they don't raise the price, from having to pay out people's claims.