insurance

Should You File a Small Auto Insurance Claim?

You could pay more in extra premiums than you receive from your insurer for the claim.

I'm debating whether to file a claim with my auto insurer for a $1,000 repair to a damaged bumper. I have a $100 collision deductible. Will filing a claim increase my premium?E.E., Plainsboro, N.J.

It might. You could lose a claims-free discount, or your insurer could add an accident surcharge that boosts your premiums for several years. The specifics vary depending on your insurer, your state and your policy, but you could end up paying more in extra premiums than you receive from your insurance company for the claim.

The average surcharge for one at-fault accident in New Jersey is 32%, according to Insure.com, which posts average rate increases by state. Some insurers in New Jersey forgive the first accident, or they assess a surcharge only for claims that exceed a certain level, such as $500 or $750. Surcharges can last three to five years.

The bigger risk comes if you have a second at-fault accident in two or three years, which could boost your rate by 77% to nearly 350%, says Insure.com's Michelle Megna.

You can avoid this dilemma in the future by increasing your collision deductible, which can trim your premiums and deter you from filing small claims. "A $100 collision deductible is too low," says Christopher Boggs, of the Independent Insurance Agents & Brokers of America.

Most Popular

Dying Careers You May Want to Steer Clear Of
careers

Dying Careers You May Want to Steer Clear Of

It’s tough to change, but your job could depend on it. Be flexible in your career goals – and talk with your kids about their own aspirations, because…
September 13, 2021
7 Best Commodity Stocks to Play the Coming Boom
commodities

7 Best Commodity Stocks to Play the Coming Boom

These seven commodity stocks are poised to take advantage of a unique confluence of events. Just mind the volatility.
September 8, 2021
5 Top Dividend Aristocrats to Beef Up Your Portfolio
dividend stocks

5 Top Dividend Aristocrats to Beef Up Your Portfolio

The 65-member Dividend Aristocrats are among the market's best sources of reliable, predictable income. But these five stand out as truly elite.
September 14, 2021

Recommended

After Hurricanes, Beware of Flooded Cars for Sale
Buying & Leasing a Car

After Hurricanes, Beware of Flooded Cars for Sale

Hurricane Ida may have passed, but there's a chance the used car you have your eye on could have been damaged by it. Here’s what to watch out for.
September 3, 2021
Your Tree, Your Neighbor’s Property: Whose Insurance Pays?
insurance

Your Tree, Your Neighbor’s Property: Whose Insurance Pays?

And how to be a good neighbor when your tree drops by uninvited.
September 2, 2021
Complain and Be Heard
Smart Buying

Complain and Be Heard

Getting our money back for the extended warranty and gap insurance we didn't want took patience and persistence.
August 31, 2021
10 Things to Know About Hurricane Insurance Claims
Becoming a Homeowner

10 Things to Know About Hurricane Insurance Claims

Know what's covered, what isn't, and how to make the most of your policy if you need to file a claim.
August 30, 2021