To claim or not to claim : when should I file an insurance claim?

One of the most frequently asked questions I get is “should I file a claim.” Just the other day a client called me and told me they had some minor damage to their vehicle and wondered if he should file a claim or just pay out of pocket.

A few days ago I was driving down the 202 and had a blowout of the passenger side front tire. As the tire broke apart, it caused some pretty serious damage to the fender, bumper and door panel. I just got an estimate to fix it that was $2100. I now find myself in that same place; do I file a claim or not?

The first thing I am considering in my own case is my deductible. I personally carry a $1,000 physical damage deductible. Lets say I do file a claim and the damages in fact do cost $2100 to repair. The insurance company would write me a check for $1,100 and I would be responsible for the $1,000 deductible so what I really would be saving myself on the claim by filing a claim is $1,100.

The result of the claim: if I was claim free prior to filing this claim, I would have been receiving a claim free discount. Once I file that claim, that discount will go away causing my rates to increase. Further, the insurance company will likely surcharge me because I have now cost them money. Statistics show that when you file 1 claim the likelihood that you will file another claim increases. We could spend a lot of time talking about that data but we don’t have time for that here.

The claim will stay on your record for a minimum of 3 years and up to 5 years. Having this claim will mean your surcharge will last at least 3 years and you won’t get a claim free discount for likely 5 years. Also having this claim on your report will make it much harder for you to move to another insurance company and find savings.

In my case, I’m leaning towards not filing the claim and taking care of the expense out of pocket. Part of my decision is I just filed a claim not long ago when another one of our vehicles was totaled in an accident. (see paragraph 4 about the increased chances of a second claim after a first claim.)

Even though $2,100 is a lot of money, I’m going to “save” my claim for something more major, like a total loss of a vehicle or a theft of a vehicle. This is something more minor and I’m just probably going to pay out of pocket.

I would never tell anyone not to file a claim but, especially if there is another party involved or bodily injury involved. However, if you have simply backed into something and caused minor damage to your vehicle only hopefully the above information can help you in your decision.

We are here for you if you have any questions.

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