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 Once a claim is filed, it goes on your CLUE report — even if it's later withdrawn or denied.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.