Should I File a Claim?

You have insurance to protect yourself. But does protecting yourself mean that you file an insurance claim every time you have a qualifying event?

There are three factors that you should consider:

  • The amount of the claim
  • The amount of your premium before and after the claim
  • The amount of money you can afford to pay yourself

Sometimes it’s fairly easy to decide. If you have a minor incident with your car and the damage will cost $350 to repair but your deductible is $500, it almost certainly makes sense to pay for the repair out of pocket. You’re not going to get a check from the insurance company under any circumstance because your deductible needs to be satisfied first.

Some may think it would still be worthwhile to file a claim because the $350 would be subtracted from your deductible, leaving you a remaining deductible of only $150 for the rest of the policy’s term. That would make sense if there was no downside. But often there is.

Insurance companies calculate premium rates based partially on your driving record and the number of claims you have previously filed. In this example, if you did have another incident, you could very well see an increase in your future premiums that would end up being a greater amount than the $350 you saved by filing the first claim.

That’s an easy example because the amount is fairly low. Even with larger claims, though, it can make sense to skip the insurance company and pay from your own funds. Let’s say you get a check for $1,000 toward a claim, then the company increases your premium $50 per month when you renew your policy. How long would it take for the additional $50 per month to add up to $1,000?

÷ 50

Twenty months—less than two years. How often do you get in accidents? If your next claim didn’t happen for three years, you’d have paid an additional $1,800 in premiums before then. If it was four years, the amount would be $2,400. A really good driver can go 15 or more years with no accidents. An additional premium of $50 per month over 15 years comes out to $9,000, no small amount. Paying $1,000 up front doesn’t seem like such a bad idea in comparison.

This is why you should always do a bit of math before you file a claim, whether it’s on your car or home. You’ll never be able to predict the future and it’s always possible that you’ll have a string of bad luck. But it’s more likely that you’ll save yourself money in the long run if you think strategically before you file.

Kelly Klee agents are always happy to help our customers think through the pros and cons of filing any claim. Give us a call at 844.885.1600 or email us at to take advantage of our experience and expertise.

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