Most motorists accept the advice that it doesn’t pay to make small auto insurance claims. For example, if a claim is only slightly bigger than its deductible, it wouldn’t make sense to file it since you won’t be getting a substantial return and risk being hit by a rate increase. However, there are cases where it’s still advisable to make such claims; here are three examples of such cases:
Someone Else Was Involved
It’s advisable to inform your insurer if you are involved in an accident that results in another person’s property damage or injury, even if the injury or damage is minimal. This is because the other motorist has the right to claim their damages from you, and may even sue you if you don’t settle.
It may be tempting to handle such situations on your own, but there is also a risk to such an arrangement. Some people may agree to such arrangements, only to later turn their back on you to demand more money or claim that you never had such an agreement in the first place. Since there may be a time limit for such a notification, it’s best to do it as soon as possible.
The Damage Wasn’t Your Fault
Your insurance rates are likely to hike if you cause an accident, but they may stay the same or rise only slightly if the accident wasn’t your fault. Therefore, you may make a claim for damage incurred in an accident that wasn’t your fault. A good example is if a tree falls on your cars or another driver hits you, and you aren’t in a no-fault state. That way, you get paid for the damages without experiencing a substantial rate hike.
Your State Law Protects You
Some states have enacted laws that shield motorists from rate hikes. For example, New York State does not allow rate increases for motorists who make claims below $2,000 as long as no one was hurt in the accident. Therefore, in such a case, you can safely notify your insurer about a small claim because the law protects you from a rate hike.
You Have Accident Forgiveness
Lastly, you may also benefit from making a small claim if your policy affords you accident forgiveness. Accident forgiveness is a provision some insurers offer to protect motorists from rate hikes after accidents. This is not a universal provision, and there may be terms and conditions attached. For example, some insurers only apply it to your first accident while others require you to maintain an accident-free history for a specified period before you can enjoy the benefit.
Considering all the above, it’s clear you should analyze each small claim before deciding whether to talk to your insurer. Don’t take a blanket approach to file or not to file all small claims since such an approach may cost you money.