Should I bother making an auto insurance claim?

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Reader’s question:

I had a small accident, but nothing severe. Will my claim affect my auto insurance premium? Should I even bother making a claim?

-P.A.

This is a question I think many of us have asked, P.A.!

I guess to learn about the affect of your claims, you’re going to need to know something about how claims and claim adjustment works. This introduces us to the wonderful world of deductibles.

What is a deductible? That’s the amount of money you agree to pay in the event of an accident, and the insurance company will pay the rest. Let’s say you have a deductible of $500. If you have a wreck that causes $250 worth of damage to your car, you pay $250, and you don’t file a claim. If you cause $1,000 damage, you pay $500, and if you choose to file a claim, the insurance company pays $500.

Once you have filed a claim, you will have anywhere from 1-5 years (depending on the severity of the accident) to stay accident-free if you want to keep your current premium. If you are a bit accident prone, or if you have a young drivers car insurance burden to bear, avoid filing a claim for anything less than $2,000, because your insurance premiums can rise several hundred dollars a month if you repeatedly file small claims.

GLJ