When should you file the claim and when should you just take care of it out of your own pocket?
I get this question all the time. A client calls me and says, “Hey, I was just involved in a minor fender bender. Should I filed the claim through my insurance or should I just take care of it out of pocket?”
A Few Points and a Few Suggestions.
The first thing though, only you can decide as a policy holder if and when you should file a claim. Your agent is a great resource to help you, but you’re the one who makes the ultimate decision. No one can tell you if you should or should not file a claim. But here’s two suggestions or here’s the way that I explain it when asked for advice. If it involves other people or other parties, yes, you should file a claim and here’s why.
When it involves other people, you’re exposed to some liability. When it involves other people’s vehicles and when it involves, especially, other people’s medical injuries, there’s tons of liability, there’s tons of exposure, and there’s tons of crazy people out there who want to sue you. So you need to use the protection of your insurance policy that you’re paying for every month so that they know what’s going on so that they’re aware of it and so that they can protect you and your liability exposure. If it involves other people, I suggest file the claim.
Now, if it’s something minimal, let’s say you’re backing out of your garage and you scraped the whole side of your car on the brick wall, that doesn’t involve other people. There’s no real liability exposure there. What I would recommend, take it down to the shop, see how much it costs. Most people carry a $500 deductible or $1,000 deductible. Obviously if it’s less than that, there’s no insurance claim to be filed. Even if it’s a couple hundred dollars more than that, don’t file the claim would be my suggestion. Take care of it out of pocket, don’t file the claim, and then your rates aren’t going to go up for something so minimal as getting 300 bucks from the insurance company to fix the side of your car.
Those are my suggestions. As I always say, find a good insurance broker so when you have these questions, you can call him and discuss those things with him. A good insurance broker is invaluable, so make sure you find one today. But remember, ultimately it’s up to you to file the claim or to not file the claim.