Would you contact your insurance company if your lawnmower flung a rock through your kitchen window? How about if you backed into a fence post with your car that caused a small dent? Reporting minor claims that cost your insurance company little or nothing might not seem like a big deal, but you could be making a big mistake. Continue reading to find out why some claims – particularly the small ones – could cause more damage than they repair.
Filing a Claim Can Raise Your Rates
Imagine paying twice as much for your insurance for the same coverage – all because you filed a small claim. That is the reality for some homeowners and drivers that have filed small claims only to see their insurance rates spike.
Insurers can raise your rates for many things – including minor claims. Even if you have a preferred policy, such as one that overlooks a first-time accident, you might still lose your claims-free discount. Furthermore, each additional claim can result in surcharges on your premiums once your policy renews. And if you think you can simply switch insurance companies and start over, think again, as many insurance companies share claims history with each other. The moral of the story is to think twice before calling your insurance company to file a claim.
Small Claims Cost Just as Much as Big Claims (And Sometimes More)
For insurance companies, it is not necessarily the size of the claim that matters, but rather the number of claims you make and the type of damages that are being reported. A single, large, catastrophic claim for a house that has burnt to the ground is unlikely to raise the same red flags as two or three small theft and burglary claims filed on the same property. If you make multiple claims – even small ones – during a short period of time, you could face a significant rate spike and possibly even loss of your coverage.
Considering Your Deductible
There is also the issue of your deductible. This is the amount you agree to pay toward the cost of personal losses filed against your home, renter’s or auto insurance policies. If your deductible is $1,000 and your windshield repair is $750, it does not make sense to file a claim. If your deductible is only $500, you might save $250 on your repairs but still pay for it with higher premiums over the next 3, 5, or even 7 years.
Should I File a Claim?
There are some scenarios when filing a claim makes perfect sense. For example, higher rates would pale in comparison to paying thousands of dollars in home repairs. Likewise, it is always a good idea to report any incident involving potential liability, since your insurance policy could protect you against the costs of a potential lawsuit.
When you experience a loss incident, ask yourself the following questions:
- What is the value of the damages?
- How much is my deductible?
- Are there any victims involved that could sue me?
- What do I stand to lose – a claims-free discount, preferred policy, or even my coverage?
Most importantly, talk to your agent!! Your independent agent can give you personalized advice and guidance that is customized to your needs. Here at Mayville Insurance, we help our customers learn when a claim is a good idea and when it might not be the best choice. For more information about claims assistance or to request your free insurance quotes, contact our office today.