If you’ve ever received a scratch or dent in a parking lot, you know how frustrating it can be to agonize over whether or not to have that small dent repaired. Though a moderately small expense compared to other major body repairs, it might seem more practical to pay your $100 comprehensive deductible and let insurance take care of the rest. Before you file a claim, however, consider how doing so might adversely affect your coverage. Continue reading to learn when filing a claim might not be the best idea.
When to File (and NOT file) a Claim
Technically, you can file a claim against your coverage any time you experience some kind of covered loss or cause property damages or injury to another person with your vehicle. However, just because you can file a claim does not necessarily mean you should. In the long run, a claim – even a small one – may cause some insurance companies to raise premiums to offset their costs. These increases also reflect the insurer’s assumption that you are a now a higher risk driver than you were before making the claim. Though you will pay more for coverage, at least you were covered for your claim. But was it worth it?
Consider the following example:
You nod off at the wheel and accidentally veer off the road into a ditch. No one was hurt and there was no property damage to others. However, a quote to repair minor damage to your car is averaged at about $750. Since you have a $500 deductible, you are happy to save $250 of your own cash by filing a claim. When your insurer renews your policy, however, you are dismayed to find that your premiums have risen just because you now have a claim on your record. The savings from the claim were not enough to offset the rise in the cost of coverage.
This is the type of scenario that drivers experience more often than you might think. Most accidents are minor ones, from dings in car doors to cracked windshields. However, a single claim of any kind – including a small one – could raise the rate on coverage by as much as 38 percent. Worse, a driver with two claims in a single year could see rates nearly double. That really stings when the increase is caused by minor damages you could have easily covered out of your own pocket.
When to File an Insurance Claim
Of course, there are certain times when a claim is not optional; it’s necessary. These including serious traffic accidents that result in injury to yourself, a passenger, or another person. It can also include an accident that results in severe damage to your vehicle, another vehicle, or someone else’s personal property.
If you have questions about claims and how they might affect your coverage in the future, contact the team here at Smith Insurance & Financial Services for assistance.