When Filing A Small Insurance Claim May Be In Your Best Interest

Filing a single small insurance claim can send your premium rates upward. You increase your chances of seeing a rate increase more if you've filed other claims in that same year. Even if your rates don't go up, your insurance company may drop you when the renewal time rolls around.

It used to be, you paid insurance to cover you when you needed it. Now, deciding whether it's worth it to file a claim can be a huge dilemma. Still, there are times when filing a small insurance claim may be in your best interest.

Auto Insurance Claims

  • If you're debating whether to file an auto insurance claim, you may decide to file a claim if your company offers you first-time accident forgiveness. That means your insurer won't raise your rates the first time you have an accident on your policy.

  • If you have a long history of being a safe driver, a minor accident may not affect the premium rate you pay.

  • If you are involved in an accident where someone was injured, you should file an insurance claim to protect yourself against a personal injury lawsuit. Your insurance company will investigate the accident claim and note if there might be additional medical expenses in the future.

  • If an auto accident isn't your fault, but the other driver is uninsured or under-insured, you may need to file a claim to cover the loss.

  • If the amount of your claim is below your insurer's surcharge threshold, you may be able to file a claim without seeing an increase in your rate. You need to know if your insurance company allows a threshold for at-fault claims and what the limit is. Although you must pay your deductible first, your insurance company then covers the remaining amount below the threshold.

Homeowner's Insurance Claims

  • Your insurer may be more lenient if you've had no recent claims, or you've been a customer for many years. Insurance companies value customer loyalty and generally are willing to give old-timers a break before the newbies.

  • Even if a claim is small, you may decide to go ahead and file it anyway. If you can't afford to pay for the loss out of your own pocket, it may be cheaper for you to manage an increase in your payment installments than to put out a sum of money at once.

  • Where you live can factor in your decision whether to file a claim. For example, if you live in the state of Florida, Massachusetts, New York, Texas, or Vermont, you may see no rate increase or an increase of only 1 or 2 percent if you file an insurance claim for any amount.