Weigh a small claim’s payment against future premium increases, and learn when you should always report a loss.
A claim pays the cost of the damage minus your deductible. It may also lead to a premium surcharge or the loss of a claim-free discount for several years, and it stays on an industry claims history report (CLUE) for up to seven years.
For a small property claim, the question is simple: is the payment worth more than the extra premium you may pay later?
A $4,500 repair with a $1,000 deductible would pay $3,500. If your $2,400 premium rises 20% for three years, that is $1,440 of extra premium. Filing still comes out about $2,060 ahead.
The break-even point is the deductible plus the extra premium — here $2,440. Below that, paying yourself is cheaper.
Insurers treat claims differently. Weather claims are sometimes surcharged less than water damage or theft, and several claims within a few years is what most often leads to large increases or a non-renewal.
Ask your agent how a claim would affect your premium before you call the claims line. Some insurers record even an inquiry.
Report any loss involving an injury or possible liability to someone else, any large loss, and any damage that could get worse, such as a leak inside walls. Delays can complicate or reduce a claim.