You have a little damage done to your vehicle. Your first thought is to file an auto insurance claim. That is, after all, the reason you pay for your insurance in the first place, right? Well, yes and no. While you DO pay for auto insurance in the case of an accident, it is meant to be used more for heavier, more expensive damages, damages you would not be able to cover yourself.
So before you jump ahead of yourself and file that claim for that shopping cart into your vehicle or that headlight that was smashed in, stop and consider some of the drawbacks of filing auto insurance claims too often. Don’t know what they might be? Well, here is some information on that for you.
You probably spent a lot of time finding just the right insurance company with just the right insurance policy for you, one you can afford. Your premiums are low and you get good benefits. Don’t toss all that out the window by becoming a nuisance to your auto insurance provider.
If you start filling claim after claim for every little bit of damage that occurs, they will raise your insurance premiums, a lot. Suddenly, that low cost premium is really expensive. So, why would filling claims cause your rates to rise?
Well, if you file a lot of claims, you become a higher risk customer. What this means is that you start to develope a history of ‘accidents’. You become more costly to the auto insurance provider then you seemed to be when you first signed up with them. The more high risk you are, the more your rates are going to rise.
As well, the more times you file, the more the auto insurance provider has to spend on you. They have to pay for man hours and lawyers, and of course, paying for your expenses. They want to save money, just like anyone else.
As well, you may have a deductible. Some policies force you to have one and others give you the option. So, in reality, more money is coming out of your pocket.
Then there’s the fraud alerts. Some people like to take advantage of insurance companies. Take, for example, the old cliché story of the person burning down their own store to get the insurance money, or the person paying to have their car stolen so that they can file a theft insurance claim.
These are not just clichés, they actually happen. Auto insurance companies lose countless millions and millions every year to fraudulent claims of accident or theft. So, they have become more wary of numerous insurance claims.
Even if you claims are truthful, they will red flag you once they notice a pattern of ‘accident’ reports. You could be investigated and charged with insurance fraud. After that happens, good luck getting any other auto insurance companies to insure you. You will be ‘black-listed’ in every sense of the word.
So, what it comes down to is simple. If the damage is minimal to the point where you can pay for it yourself, do so. It will save you money in the long run. It will also save you a lot of headaches when it comes to disagreements, fraud charges, and lawyer fees. Do yourself a favor and use auto insurance claims only in costly accidents that you cannot afford to cover yourself. Use your auto insurance wisely.