Insurance Claims: To File or Not to File?

I’ve always wondered this myself: Is it worth the risk of being blacklisted or having insurance premiums increased after a relatively minor car accident?  Thankfully, I’ve only been involved in a few such cases.  I always chose to pay for the damages in cash, instead of reporting them to my insurance company.  Apart from the potential for higher premiums, I was also worried about future accidents; Perhaps “two” accidents is the magic number after which I’d be thrown in the high-risk pool. 

MSN MoneyCentral’s article, 6 things to know before you file a claim, helps explain some of these concerns.  Some of the key points:

  1. Ask your insurer about the effects of claims on premium rates.
  2. A single minor accident accident won’t end up in in a policy cancellation, but it’s likely to increase your rates.
  3. After an accident, you can lose discounts on your insurance as you may no longer be considered as safe a driver.  The effect is equivalent to a rate increase.

I’m all for riskier drivers paying more for car insurance, but a line must be drawn.  Overall, it seems that insurance in the United States is quite a scam.  While it does work well for people who can’t afford repairs, it’s at best a guaranteed high interest loan for most people.  As with health insurance, profitability for these companies is tied to raising rates or dropping coverage.  The statement seems to be, “If you dare to file a claim, we’ll get even with you.”  With mandatory coverage laws, some consumer protection would be helpful.  I’m not holding my breath, at least until we have a more progressive government in place.

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