Filing every claim against your car insurance policy does not play in your best interest. While you may think that you are saving thousands of dollars because the insurer pays for repairs, think again. In the long run, your premium payments might worth more compared to the value of your car.
Insurance rate hike
On average, the car insurance industry imposes a premium rate hike from 20% to 40% when there are too many claims filed in the prior year. This increased rate may be in effect for as long as five years. This means that a year worth of claims may strike back five times more.
Choosing between filing a claim and paying out of pocket
When it comes to a car insurance rate hike, there are no standards. One company may forgive an over speeding ticket, and another may not. Every policyholder must understand that every claim poses risks of increasing your rates.
Knowing when to file your car insurance claim and when to shoulder the expense is something you should carefully analyze.
The insurer forgiving your first accident is not necessarily what will happen if another mishap happens. It won’t be personally taken against you, but business is business.
Your claim will be paid because it is a covered repair, but then again, you are raising the probability of your insurance rate increasing.
A discussion with your insurance agent about the insurer’s policies ahead of time will help you identify whether you should file a claim or not. However, it is not recommended that you talk to him at the same time the claim is already pending on your end.
If he knows there’s a potential insurance claim that was not filed, he may be forced to report you to the company.
Furthermore, consider how much the costs of the claims are. If the necessary repairs won’t hurt your pocket, choosing to pay on your own is perhaps the better option. But if your insurer declared your vehicle a total loss. Then it’s more economical to have your car insurance policy cover the replacement cost.