Should I Pay a Small Insurance Claim?

So you’ve had an incident. Maybe not a major one, but it happened and you’re in the position of having to weigh whether you should be on the phone to your insurance company…or just handle the situation and pay for it yourself.

Finding the balance between paying out of pocket and potentially paying a higher insurance premium for years can be a difficult decision.

 

What Counts as a Small Insurance Claim?

A small insurance claim could be a wide range of scenarios across the spectrum of insurances: For car insurance or truck insurance it could be a cracked windshield or a fender bender and dented bumper.

For home insurance it could be minor storm damage to your siding or shingles.

For renter’s insurance it could be minimal damage from a break-in.

No matter the scenario, chances are at some point you’ll need to make a decision as to whether you should pay a small insurance claim out of pocket or file the claim and risk your insurance premiums going up for anywhere from two to five years. In addition, a rate increase is almost guaranteed if you’ve filed multiple claims.

 

Consider the Short and Long-Term Costs

Bosworth & Associates in Tyler, Texas is a trusted local insurance agency who have experienced all aspects of small insurance claims. Before filing a claim, it’s important to do the math and weigh the short and long-term benefits and drawbacks of filing a claim or not. Too often people file a claim without taking the time to determine the long and short-term costs of filing a small insurance claim.

If it’s a necessity to have the funds immediately because you need to handle financial obligations and you’re willing to take the financial hit long-term if and when your premiums go up, then that’s what needs to happen. However, if you do the math and you’ll be paying significantly more money via your insurance payments over the years, it might be better to pay out of pocket and handle the situation outright.

 

Factor in Your Deductible

And don’t forget to add in the cost of your deductible when you’re doing the math. You’ll need to compare the cost of repairs, your deductible, what insurance will pay for repairs, and what your possible premium increase will be if you file a claim.

Your deductible is also a good gauge to help you determine if you should pay out of pocket in the case of an incident. If your deductible payment, subtracted from what you’ll receive from insurance, leaves little left over to cover the actual cost of repairs, it’s definitely not worth it to file a claim.

 

Consider Your Recent Claim History

Have you filed an insurance claim recently?

If so, filing another claim soon after could cause your insurance premiums to go up significantly. Filing multiple insurance claims over the course of a few years could mean your insurance rates go up—and it could be a lot. If it’s a minor incident and you can afford to pay out of pocket, consider doing so.

It doesn’t happen often, but sometimes the person at fault for the incident (car accident or otherwise) will offer to pay for whatever damages they incurred. If repair costs can be handled directly by the two parties involved, then you can avoid time, paperwork and other bureaucratic hoop jumping.

 

When You Should File an Insurance Claim

There are instances where you absolutely should file an insurance claim.

One of the most important instances is in the case of injuries—especially if you are at fault. The cost of medical treatment can continue to accrue over time and can add up significantly. In addition, insurance is a legal form of documentation and covers you in case those medical costs continue to grow.

There are some instances, such as that of a total loss, where it’s a clear case that filing a claim is necessary. You can also factor your deductible into that equation: if the repair/medical etc. costs are greater than one thousand dollars, it makes sense to file a claim.

Was someone injured in the incident? If so, it’s important to go through legal insurance channels and have a transparent paper trail, as medical costs can be tricky. In addition, if a serious medical incident occurred, as was mentioned earlier, medical costs could continue to accrue over time, causing a major financial burden.

 

Understand Your Policy Before Making a Decision

Knowing whether to file a small insurance claim or pay out of pocket can be confusing and each scenario is different, so the variables should be considered before making any decisions. It’s important to understand your premiums, deductibles, and how your individual insurer handles claim filings when it comes to premium increases.

Contact your local East Texas insurance agency today and do your due diligence before filing a claim.