To File or Not To File? That Is Your Claims Question!

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A customer who has experienced an unfortunate event but doesn’t consult an agent before filing a claim is one of my pet peeves. Or vice versa… An agent who refuses to discuss a potential claim before the insured files a claim. It can end up being detrimental for both of you. Unnecessarily filing a claim can make a customer feel ill.

First. Driving record, driving record, driving record. All insurance companies in every state have access to the central information system once the claim has been filed. Regardless of whether or not police officers were present at the scene, the claim will remain visible for all to see. It will either show on your motor vehicle record or the LIS report. If you’re a safe driver and have a clean driving record, it may not matter that much. However, if your driving record is not perfect, you should not file frivolous claims.

Second. Second, filing a claim can affect your rate with your current company. Before you submit a claim, you need to consider whether you don’t have accident forgiveness. Some companies require you to earn it based on your tenure with them. Other companies offer accident forgiveness in a plan or package.

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A) What will the rate of my claim go up if it is filed now? How long will it take? Example: If you’re new to your insurance company, your claim may result in you losing your good driving discount and an accident surcharge. Your good driving discount equals $140 savings if you pay $300 per six months in premium. Add to that a $130 accident surcharge every six months for three years. Your premium of $300 + $140 + $130 equals $570 for the next three years, or possibly longer. This means that your car insurance costs would rise by $540 per year compared to the previous 3 years. That’s $1,620.00 more than you currently pay. You would lose more money filing a claim if your damages were only $650 after your $500deductible was met.

B) You may not want to “waste” your accident forgiveness if it’s only for the first incident. It is sometimes better to set a threshold limit when considering whether or not to file a claim. Another rating factor is the frequency of claims. You can expect that your preferred rate will be reduced if you have had four claims within the last 2 1/2 years.

Third. Another reason to file or not file a claim is headaches. Your neighbor down the street might be able to fix the problem for you. You may also want to file the claim in order to avoid having to do all of that hassle, to get some satisfaction, and to pay out-of-pocket. Some insurance companies have begun to train claims representatives to stop third-party calls (not from their customers) from submitting the claim through the at fault parties company. If someone hits your car while you are shopping in the mall, and you have Geico insurance, you can call Geico to file the claim through their customer’s policy. Geico representatives could advise you to file the claim through your company or call your agent. My favorite… “This is a no-fault’ state, so each person uses his/her own policy… FALSE!!!! FALSE! That is something I can understand.

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Avoiding headaches is another. If you are at fault for an accident and the other party is injured or profiting from it, it might be worth filing a claim. I believe that if you sustain any type of injury, you must file a claim. Forget about the rate or driving record considerations. Claims related injuries are something you don’t want to mess around with, especially if you don’t have good legal representation.