When should I file a claim and when should I not? It is a common question we get in our agency and every time it is asked, we always say, "it depends on each situation". Let us first tackle this question with how claims can affect your insurance.
It varies by insurance company, but most companies look at a 6 year window for home insurance claims and a 3 to 5 year window for auto insurance claims. What this means is that if you file a home claim it can influence your premium for up to 6 years and if you file a claim on your auto insurance it can affect your premium for 3 to 5 years. If you have more than one claim in this window of time it can really have an impact on your premium and may even cause some insurance companies to look at canceling your coverage. It is best to consult with your insurance agent to see what prior claims you have on your record before deciding whether to file a claim. If you already have a claim inside one of those windows of time, then it may be worth contemplating whether to file a claim or not.
Having said all that, when it comes to liability claims, they are a must file. These would be auto accidents that involve a third-party bodily injury, or a homeowner claim that involves injury to another person. These need to be handled by the insurance company and their legal firms. Also, if you have a large claim such as a totaled vehicle or large size house damage, these too are claims you would want to file without hesitation. The claims that we are talking about that may or may not be worth filing are things such as backing your car into a light post, backing into an unoccupied car or driving off the road and causing damage to the front bumper when you hit a ditch. On the homeowner side, it would be small claims such as ice dams that cause a $1000 or $2000 worth of damage or a roof claim that the repair is only a $1000 or so. These are the types of claims it is worth contemplating prior to filing. When you factor in deductibles and the effect on your premium for a few years, those smaller claims may be best to pay out of pocket.