When deciding whether to file an insurance claim, you need to consider several things—the terms of your individual policy, the cost of your claim, the amount of your deductible, and how many claims you have filed with your insurance company.
Knowing whether to file an insurance claim is important for several reasons. Insurance companies track how often you file claims—a factor that is considered when determining your premium. In some cases, insurance companies even keep a record of calls you make to inquire about a potential claim.
If you can pay for damage or property loss without undue financial hardship, it may make sense to pay for that expense out of pocket instead of filing a claim. For example, if you are in a fender bender and the amount of damage to your vehicle is $1,100, it might be a good idea to foot the repair bill yourself if you have a $1,000 deductible. If you have filed an insurance claim each year for the last 20 years, you also may want to think twice about filing another claim. In such a case, your insurance company could very well cancel your insurance policy due to perceived high risk—if it has not done so already. Filing the wrong kind of claim for your policy also can count against you.
Bear in mind that insurance is really there to cover big expenses that would significantly burden you financially. The problem with filing smaller claims is that they can count against you if you ever need to file a bigger one. So, if you want to keep your premium costs down, consider raising your deductible to $500 or $1,000, and file claims only if damage exceeds that amount. However, if you determine that your claim is insurable under the terms of your policy and you have considered the above factors, you should submit your claim as soon as possible. Most insurance companies require you to file a claim within a certain number of days after an incident, so be sure to check the terms of your policy. For more information, see the Insurance Information Institute’s Web site at http://www.iii.org/media/publications/brochures/howtofile/.
