Minor accidents happen every day, causing damage to homes, cars, and other assets. If you have the right insurance, chances are your policy covers any losses you may sustain. However, filing a claim may not be the most cost-efficient avenue of recovery in every situation – especially after a minor accident. Continue reading to learn more about when you should file a claim, and when you probably should not.
At-Fault with Liability
When it comes to liability, don’t risk your financial future. Lawsuits have the potential to threaten your savings and assets and cause tremendous financial damage. If you cause an accident – even a minor one – that results in injury to another person or damages to their personal property, it is a good idea to report it to your insurance company. You could be sued weeks after an accident, even if the victim seemed fine at the time the accident occurred. If you fail to report the incident to your insurer in a timely way, you could risk violating the terms of your insurance coverage and making it difficult for your insurance company to defend you. Liability damages do not require you to pay a deductible, and they can cover a wide range of expenses, from victim medical bills to legal fees.
Small Claims Can Affect Your Rates and Coverage Eligibility
In the case of minor losses that do not involve anyone other than yourself or those covered under your insurance policy, it might not make sense to file a claim for minor damages. Insurance companies can remove a claims-free discount from your premiums after just one small claim. If you already have a history of prior claims, you could notice surcharges added to your rates as well. In some cases, individuals with multiple claims in a short period of time – even small claims – may receive notice that their coverage is being canceled or will not be renewed once their current policy expires.
Claims Go On Your Record
Insurance companies report claims to consumer reporting agencies, who share that information with other insurers. Any claims you make can remain on your report for up to 3, 5, or even 7 years in some cases. That information can be used against you when determining an insurer’s risk of offering you coverage. In other words, you could be penalized with higher rates for years to come, all for one small claim you make today. Always weigh the value of your loss reimbursement with the long-term costs of higher premiums before filing a claim.
If Your Deductible is More than Your Repairs, Pay for the Damage Yourself
Your home and auto insurance policies probably require you to pay a deductible for any at-fault claim you make against your collision, comprehensive, personal belongings, and structural damage coverages. If you have a $1,000 deductible, you will have to pay $1,000 out of your own pocket toward your repairs. In that scenario, it would not make sense to file a claim for $800 in damages if you will be responsible for paying the entire loss out of pocket anyway. Not to mention, all damages you report to your insurer – including the ones with damages less than your deductible – will go on your record. Why risk a higher insurance premium for a claim you never receive reimbursement for?
Should I File a Claim?
There are many scenarios when filing a claim is absolutely necessary and beneficial. Your independent agent can work on your behalf to determine which claims are in your best interest and which losses are probably better to keep to yourself.
For more information about claims assistance or to request your free quotes, contact our office today.