Why did my rate increase for a $25 towing claim?

I used roadside & towing coverage once, my car was towed 2 miles, bill $75, insurance paid $25. I have been paying for that $25 for 5 years! I have a great driving record, excellent credit etc. A water pump one my car went out and my car needed to be towed approx 2 miles back to my home. I thought I have roadside and towing assistance why not use it. The bill was very reasonable at $75. I contacted my insurance company (Liberty Mutual), my first surprise was they ONLY pay $25.00 maximum no matter the cost of the tow. Next surprise was when my insurance premium increased! Contacted insurance and was told if your insurance company pays ANY amount of money even if the cost is 50 cents, the incident will affect your insurance. So, because my insurance paid $25.00 I have had a ding on my insurance for the past 5 years. How can this be?

Unfortunately, you were given the correct information. Insurance companies base their rates on the risk of having to pay any claim. However, 5 years is usually the longest you should be impacted The good news is, most companies do not charge that much for a towing claim. Since the insurance company didn't pay that much for the claim in the first place, I'd look into getting a different roadside service. At The Zebra, we have an unlimited roadside product that would be separate from your insurance policy and would not impact your rates if you used it. Also, you would be able to remove the roadside coverage from your insurance policy which would lower your premium. You can give us a call at 888-444-8949. Good luck and if you have any other questions, don't hesitate to ask.

Here is our guide to roadside assistance.