When to File an Insurance Claim (and When NOT To)

Insurance exists for catastrophic losses — the $20,000 kitchen fire, the $50,000 car accident, the $100,000 liability lawsuit. It's not designed for every $800 fender bender or $1,200 plumbing repair.

The Decision Framework

✅ ALWAYS File When:

• Someone is injured: Any bodily injury claim — always involve your insurance
• Major property damage: Loss exceeds your deductible by $3,000+
• Liability exposure: Another party is making a claim against you
• Total loss: Vehicle totaled, house fire, major storm damage
• Theft: Significant items stolen (also file a police report)

⚠️ THINK CAREFULLY When:

• Loss minus deductible = $1,000-$3,000: Weigh the payout against 3-5 years of higher premiums
• You've had a recent claim: A second claim in 3 years significantly impacts your rates
• Cosmetic damage only: Dents, scratches that don't affect function

❌ PROBABLY DON'T File When:

• Loss minus deductible < $1,000: The rate increase will cost more than the payout
• Minor fender bender: Small parking lot damage you can repair for $500-$800
• Small water damage: A $600 plumber visit for a leaky pipe

The Math: Why Small Claims Cost More Than You Think

Example: $1,500 water damage with a $1,000 deductible.

• Claim payout: $500 (damage minus deductible)
• Rate increase: 15% on a $2,500 premium = $375/year × 3 years = $1,125
• Net cost of filing: You received $500 but paid $1,125 in higher premiums = lost $625

Claim Types and Their Impact

• Water damage: High impact — carriers view water claims as likely to recur
• Wind/hail: Moderate impact — widespread events are viewed more favorably
• Fire: Moderate impact — less likely to recur, carriers understand
• Theft: Moderate impact — depends on frequency and location
• Dog bite: High impact — some carriers will non-renew after one bite claim
• At-fault auto: High impact — largest rate increases of any claim type

Before You File: Talk to Your Agent

A good independent agent will help you evaluate whether filing makes sense before you file. Once a claim is filed, it goes on your CLUE report — even if it's later withdrawn or denied.

Bottom line: Insurance is for big losses, not small ones. Before filing, calculate: payout minus deductible vs. 3-5 years of premium increases. When in doubt, call your agent and ask before filing.