When an unexpected accident or property damage occurs, the first instinct is often to file a claim immediately. While that is exactly why you have insurance, there are a few "behind-the-scenes" factors that are worth considering before filing a claim. Filing a claim, even a small one, sets off a sequence of events that can impact your financial profile for several years.
The "Clue" Report: Every claim is logged into a national database that follows you even if you switch carriers, staying on your record for three to five years. Some events or occurences can remain for seven to ten years.
Rate Impact: Beyond any specific surcharges, you may lose "Claims-Free" discounts. In many cases, the increase in your premium over three years can outweigh the actual payout of a small claim.
The Frequency Factor: Insurance companies track how often you file. Multiple small claims are often viewed as a higher risk than one large, unavoidable loss, which can affect your eligibility for "Preferred" rates in the future. This could lead to non-renewal or higher premiums.
The "Rule of Thumb" for Filing:
Before filing, get an independent repair estimate. If the repair cost is close to your deductible, it is often better to pay out-of-pocket and protect your long-term record. Calculate the three-year impact: If a claim raises your premium by even $200 per year, that’s a $600 cost over three years.
Our goal is to make sure your insurance is there when you truly need it, while keeping your long-term costs as low as possible. If you’re unsure whether a specific incident is worth a claim, please reach out to us directly. We are happy to run the numbers with you before you file the claim.
KEY POINTS:
Always File a claim if someone was injured or another vehicle was hit.
Do Not File a claim if the repair cost is close to your deductible.
Avoid Filing a claim if possible as Frequency of claims is a red flag.
Consider Filing a claim after you understand all of the costs.
If you appreciate our transparency and honesty, please request a free quote or refer a friend, neighbor, or coworker. We promise to treat them with the same integrity we will show you—focusing on their best interests and helping them save money, whether they choose a policy through us or not.
Please reach out to us if you ever have any questions or concerns. You can reply to this email. If you have any family or friends who could benefit from our help please forward this to them too.
Eastway Insurance Agency, Inc. (585) 586-2390
email: Joe@eastwayagency.com
