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With Auto Claims, Think Before You File

What’s the best way to see your auto insurance premium shoot up? File a claim. I know. Makes me nuts, too. But here’s a hard and fast fact. In the new “normal,” which is theoretically the world “after” the recession, you have to look at short-term expensive versus long-term expensive.

If you’re in a wreck and the damage is major, file a claim. “Major” is a subjective term. It means, more than you can afford to pay on your own. If it’s a minor ding you can live with, or a repair that your mechanic says won’t effect the operation of the vehicle, it might be well worth your while to wait.

The average age of cars on the American roadway is inching toward ten years, which means you’ve probably already kissed your trade-in value good-bye. The big question you have to ask is, “If I file this claim, and if my premiums go up, what is that going to do to my monthly budget?”

If you’re with a company like State Farm that has an “accident forgiveness” offer for people who have gone for years without so much as a fender bender, you’re in the clear. If you’ve never filed a claim before, you’re likely in the clear. If you have filed a claim, think before you do it again.

If another person was injured in the accident, you have no choice but to file. A good rule of thumb otherwise is simple. If the damage is less than your deductible, don’t file. Even it’s even marginally over your deductible, weigh the decision. In the long term, as in months of high premium payments down the road, getting that fender straightened out might not look like such a good choice.

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