Avoid Increase of Insurance Rates: Filing a Claim

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If you get into an accident, whether you are the at-fault driver or the other way around, you better be careful when filing for a claim, if you care about your insurance rates.

For sure, we are not telling you not to file a claim, because after all, this is the reason why you have auto insurance. However, keep in mind that there are those times when it’s more appropriate to pay your own money to settle everything instead of filing a claim. The effects would be far more expensive than the cost of the accident itself. Unfortunately, we could not find any hard and fast rules when to do this. Instead, look for the guidelines below if any of them would fit your situation.

Knowing When to File an Insurance Claim

Filing an insurance claim is encouraged if there is substantial damage or injury sustained during the accident. However, the word “substantial” is relative to the affected person. Some people don’t mind shelling out a hefty $2,500 from their own pockets while others might find it difficult to pay even to a few hundred dollars. For those who have not filed a claim in years or never filed any claim ever, filing one will not affect the insurance rates whatsoever.

That brings us to the term “accident forgiveness” used by most insurance providers such as State Farm. This means that if you have been accidents free for several years, and you are filing one today, the accident, will not go on your driving record, even if you are, the at-fault driver. If this is your case, then filing a claim is highly encouraged.

Now, nearly all insurers show their generosity if you have been a loyal customer for many years. Finding people like you that sticks with them through thick and thin are, after all, hard to come by these days. Your insurer will gladly “forget” what happened especially if you have been a model driver.

Keep in mind that if someone is injured, it’s better to file a claim to protect you from legal tussles later.

When Not To File an Insurance Claim

It is easy to tell when not to file a claim. It is when your deductible is larger than the sustained damage. For instance, if your deductible is $1,000 and the cost of the damage is $350, filing a claim is useless. The same analogy could apply if the cost of the damage is $1,100. It’s a lot better to absorb the $100 instead of giving your insurer the reason to double your insurance rates next time around.

If you have been issued with a speeding ticket or any moving violations, for that matter, it is best not to tell your insurance company about it. Nearly all insurers don’t like such reports, and they will likely raise your premiums, especially if you are filing a claim and have gotten a ticket altogether.

Lastly, it’s a lot better not to file a claim if you have been filing claims after claims, or more than once within three years. Being labeled as a high-risk driver means a harder and slim chance of finding affordable insurance.