When You Should (And Shouldn’t) File an Insurance Claim

Filing a homeowners insurance claim or auto insurance claim is generally discouraged if the value of your losses falls below your deductible. However, if the accident involved a third party and occurred while driving or there were injuries involved, filing a claim is recommended. Otherwise, a claim against you can escalate into a costly lawsuit.

Read below to see the specifics of when it’s best to file a claim and when you shouldn’t.

Key Takeaways People generally refrain from filing a claim if the losses are equal to or fall below their deductible. If anybody is injured in a car accident, then you should always report the accident to your insurance company. After filing a claim, auto insurance premiums typically increase up to 50% and up to 20% for homeowners insurance. File claims excessively and your insurer may refuse to renew your policy or cancel it outright.

Is It Always Required To File an Insurance Claim?

It is recommended to file a car insurance claim if the accident involved another driver. if the other driver was injured, you definitely should. For other cases, it will depend on the situation and the coverage you purchased. Generally, if the value of your losses is less than your policy’s deductible, you may choose not to file a claim. The reason why: 

Your premiums will usually increase when you renew your policy if you filed a claim recently. 

Paying elevated monthly rates over time may cost more than paying for your losses out of pocket.

When You Should Not File an Insurance Claim

You generally want to avoid filing a home or car insurance claim if your losses are below or equal to your deductible or if your policy does not include coverage for a certain loss.

When Not To File an Auto Insurance Claim

You should not file a claim for minor damages. Small dents, scratches and even minor fender benders may cost less than your deductible. If the cost of repairs falls well below your deductible, you typically want to avoid filing a claim to avoid increasing your premium.

You should not file a claim for losses not covered by your policy. If you have a liability-only policy, then you will not be covered for physical damages to your car. Normal wear and tear are excluded from coverage, too. 

You should not file a claim for preexisting damages. Your insurance company will not cover the costs of repairs for damages that existed prior to the car accident. Attempting to get reimbursed for a dent that occurred several months ago is dishonest and fraudulent.

You may not want to file a claim if the accident involved no other parties. Getting into a single-car accident — backing into your driveway gate, for instance — may not necessitate a claim. If the damages are minor, paying for repairs yourself could be cheaper than facing a rate increase.

When Not To File a Homeowners Insurance Claim

You should not file a claim for minor damages. Similar to auto insurance, minor things like small leaks, cracks or scratches that cost less to repair than meeting your deductible are generally not claim-worthy. Again, filing a claim can increase your rate.

You should not file a claim for maintenance issues. Normal wear and tear, lack of maintenance or poor home care, won’t be covered by your homeowners policy. Tip: annual home maintenance can help you keep an efficient household and catch small issues before they grow into big problems.

You should not file a claim for preexisting damages. It is your responsibility to identify preexisting damages to your home before purchasing it. Trying to pass old damage off as new damage is home insurance fraud and comes with fines and possibly jail time.

You should not file a claim for floods, earthquakes or mold (if you did not buy these coverage options). These three perils are always excluded in a standard home insurance policy. You will need to buy specific coverage for these losses if you want financial reimbursement. 

When Should You File An Insurance Claim?

You should file an insurance claim when your losses are covered by your policy and they exceed your deductible. In car accidents involving other drivers, it is strongly recommended that you report the accident to your provider.

When To File an Auto Insurance Claim

You should file a claim if your losses are covered and exceed your deductible. For example, if your deductible is $500 and your repair bills total $1,200 and you have collision coverage, then filing a claim would be recommended.

You should file a claim if the accident involved another driver. Even in minor accidents in which you both handle the car accident by walking away, the other driver may later change their mind and file a claim against you. A few reasons why: injury symptoms may not surface until days later or a repair estimate was higher than they expected.

You should file a claim if the other driver was liable but is uninsured or does not have enough coverage. If the other driver was at fault and your losses were significant but they don’t have enough coverage, you can file an uninsured/underinsured motorist (UM/UIM) claim with your insurer. This coverage is required in some states.

How Many Car Insurance Claims Are Too Many?

Some car insurance companies may consider two or more claims within a two-year period as excessive and you will almost certainly see higher premiums each time you renew your policy with the same insurer.^[1] In some cases, the insurer may refuse to renew or cancel your policy because they classify you as a “high-risk driver.”

However, the number of claims is not the only consideration. The severity of the accident, fault determination and the type of claim are also important. For example, filing several comprehensive claims due to severe weather conditions is a type of loss that is beyond your control.

When To File a Homeowners Insurance Claim

You should file a claim if your losses are covered. An example would be if a hail storm broke your windows and damaged your roof, leading to water entering your home. Windstorms are covered in a standard policy but if an earthquake caused the damage, your insurer would deny coverage. You should double-check the exclusions in your policy to avoid surprise denials down the future.

You should file a claim if your losses exceed your deductible. Not entirely dissimilar to filing an auto insurance claim, filing a home insurance claim is recommended when your losses exceed your policy’s deductible. 

You should file a claim if you can be held liable for a moderate or severe injury. For example, if a guest fell down your stairs because of a wobbly rail, you can file a claim and your medical payments coverage can pay for minor injuries. For more severe injuries or if the claim escalates to a lawsuit, your personal liability coverage will step in to protect you. 

How Many Home Insurance Claims Are Too Many? 

Like car insurance, whether the number of claims you have is considered "too many" will vary by insurance provider and your coverage. Two claims within five years can be considered too high depending on your insurance company.^[2]

Will I Be Penalized for Filing a Claim By The Insurance Company?

Filing even a single claim with your home or car insurance company will typically result in a rate increase when you renew your policy. This is because filing a claim once is linked to filing more claims in the future. This increases your risk exposure and insurance adjusters bump up your premium accordingly.

How Much Will My Premium Go Up if I File a Claim?

A car insurance premium can go up by nearly 50% depending on the nature of the auto insurance claim and can remain on your insurance record for up to three years.^[3][4] For example, an at-fault driver who files a claim may see a higher premium hike than a driver who was not at fault. 

A homeowners claim can cause a premium increase between 9% to 20% and can remain on your insurance record for between five and seven years.^[5]

It's still important to remember that insurance is meant to protect you in the event of an unexpected circumstance.

If you have suffered a covered loss, you may still want to file an insurance claim despite the rate increase. The premium increase is often temporary and may not be significant or you may need the cash payout because you do not have enough savings to cover the expense.