You pay a good sum of money every year towards insurance so that when you need it, it actually works! However, this doesn’t come without caveats.
Want to know something?
Every time you make a claim, whether it be comprehensive or collision, it goes against your insurance record. The more claims you have, regardless of the amount, the higher premiums you receive. If you have too many claims, some carriers will even turn you away!
Because of how important this is, let’s talk about the two main types of claims and the right moment to file one.
Collision coverage pays for your vehicle’s damage if you hit an object or another car. Below are some examples of when you can file for an insurance collision claim.
• Your car slides on ice and hits a guard rail.
• You swerve to avoid a squirrel and hit a pole.
• Someone dents your car and drives off.
Comprehensive insurance pays for non-crash damage, such as weather and fire damage. It also reimburses you for car theft and damage from collisions with animals. Below are some examples of when to file an insurance comprehensive claim.
• You hit a deer and dent your fender.
• A rock cracks your windshield and you need a replacement.
• A hailstorm damages your car.
• A thief steals your car and it’s not recovered.
When Should I Make An Insurance Claim?
So we’ve already established that every time you make a claim, no matter the amount, it goes against your record. Because of this, it’s important to weigh out good situations to use it.
There are times when it’s best to eat the expense out of pocket, or you could be paying for it on the insurance side.
The Deductible Comparison
Every time you have to use insurance, you have a deductible that has to be paid to the insurance company first before a claim can be started. This could be $500, $1,000, $2,000, etc…
When you’re on the fence about making a claim, it is important to ALWAYS get an estimate for the cost of the damage, recovery of an item, etc… to see how much the cost is versus what your deductible is.
If the cost to have your bumper repainted is $800 and your deductible is $1,000 it doesn’t make any sense does it?
However, if you need a new door and mirror that costs you $4,500 and your deductible is $1,000, this may be a good scenario to use your insurance.
What’s most important to take into account is your claim frequency. It’s okay to use your insurance for a new windshield, or your stolen car, or repairing damages. That’s what it’s there for! You do however need to be extremely conscious of how many claims you make.
Claims stay on your record for around 5-7 years. The more claims you have on your record, the more unfavorable you look to carriers, resulting in higher premiums.
As stated prior, if you have too many on your record, there’s a possibility that some carriers won’t even write you. If they do, you can bet it’s going to be costly.
It also worth mentioning that you do NOT have to file a claim directly after an incident occurs. You have 364 days to gather information, estimates, and facts before reaching out to file.