Do Recalls Affect Your Car Insurance?
Your car insurance premiums depend on a variety of factors, including if the car has any recalls. You might wonder why a recall would have any effect on your insurance premiums. After all, the insurance company doesn’t have to cover the repairs. That’s the car manufacturer’s responsibility. But, in a roundabout way, a recall can affect the safety of your car. We help you understand how it affects your premiums below.
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What Does the Recall Affect?
Your insurance company cares about the safety of your car. If there is a problem with your car’s safety, it may affect the premiums. If the issue puts your car at risk of an accident, it increases the insurance company’s likelihood of paying out on a claim. This only happens if the recall won’t fix the safety issues with the car.
Ignoring the Recall is Bad
Some people think taking their car in for an issue on a recall isn’t a big deal. If you avoid getting the car fixed, though, it can hurt your premiums. This is especially important if the issue puts your car at risk for an accident. Again, the larger the risk of an accident, the higher your premiums become. Insurance companies want to lower their risk of a claim as much as possible.
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Your Car’s Value May Drop
Typically it’s a bad thing if your car’s value drops, but in the case of your car insurance, it can be a good thing. If the recall on your car is bad enough that it grabs the attention of the media, it can bring your car’s value down. As long as you aren’t planningto sell the car anytime soon, this could be a good thing. The lower your car’s value, the less it costs to insure it because it would cost the insurancecompany less to replace the car in the event of an accident or theft.
What to do if you Get a Recall
If you receive a recall on your car, it’s important to take care of it. Read the information carefully and act promptly. If a manufacturer sends a recall, it’s for good reason. Chances are that it affects the safety of the car. The NHTSA is in charge of recalls, and telling you where to get the issue fixed.
The bottom line is that a recall on your car may or may not affect your insurance premiums. If you don’t take care of the issue, it will affect your premiums, not to mention the safety of your car. If you do take care of it, your premiums could go one way or the other. The seriousness of the recall and the outcome of the repair will determine what happens to your insurance rates.
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