To file a claim or not to file a claim, that is the question.

I’ve come across a few customers that have their fair share of claims and some that have zero claim history.   The underlying theme I get from my customers that have filed claims when they possibly could have avoided it was “I’m paying for insurance, they need to cover me”.  That is very true, but you need to be careful not to file a claim that is just over your deductible.

Here is an example:

You get a in a fender bender in Dallas that involves $830.00 worth of damage.  Your deductible is $500.00.  Should you file a claim or just pay another $330.00 to keep your claim history clean?  That is ultimately the choice of the individual, but I wouldn’t personally file a claim in this example.  Most likely next time your policy renews, your insurance rating will decrease causing your premiums to increase.  You’ll basically end up paying for that $330.00 difference and then some over time through higher premiums.  Let’s say the same accident was resulted in $8,300.00 worth of damage, I would definitely file a claim since the insurance would be paying for the majority of the costs.

Another scenario that I highly advise against is going for a deductible that is super low.  Some of my clients have auto deductibles as low as $100.00.  The average that I recommend is $500.00 or $1,000.00 deductibles.  What happens is that you’ll get the lowest premium if you choose the $1,000.00 deductible and that will allow you to save that difference in a rainy day fund or emergency fund for when you have a small accident.  When someone has a super-low deductible such as $100.00, the tendency is to file more small claims which shows insurance companies that you’re “claim happy”.

Insurance is intended for big events that would drain you financially.  We recommend that everyone should have an emergency fund of 3-6 months of expenses so that you can cash flow small emergencies and let the insurance companies handle the bigger ones which statistically should be more rare.

Call us at Ryan Everet to discuss your deductibles and what fits your financial situation best.  We’d love to hear from you or a referral.