Should You Claim Auto Insurance for a Scratch?

Filing an auto insurance claim for damage to your car makes sense. It’s the primary reason for having an auto policy in the first place. However, filing a claim for minor damage may work against you, especially if you want to keep your car insurance costs down in the long run.

Typically, you may be better off paying to fix a scratch on your car instead of pursuing insurance compensation. Here’s what you must keep in mind before claiming auto insurance for a scratch.

Your Claims History Record Speaks Volumes About Your Driving Risk

Before agreeing to sell you an auto insurance policy, your insurer will assess your driving risk before determining your rate. They’ll typically base the risk assessment on multiple factors, including your driving record and claims history. Every claim you file appears on your driving record, too, and the more claims filed, the more driving risk you demonstrate.

Generally, your rate can go up by a certain percentage when you’re compensated for a claim against your policy. The compensation amount that may trigger such a jump varies from company to company. Sometimes, a single at-fault claim may prompt as much as a 38% increase in your rate.  Worse still, it may take up to three years before your insurer decides to review your rates downward.

When You’re Better Off Not Filing an Auto Insurance Claim

As a general rule of thumb, only file an auto insurance claim when it’s in your best financial and legal interests. For example, you’d probably not think twice before submitting a claim for a $20,000 car wreck. Your comprehensive or collision insurance deductible would be significantly lower than the auto repair cost you’d be facing in that scenario.  

However, there are times when it makes more sense to pay for the damage rather than file a claim. Such situations arise when:

  • The repair cost is lower than your deductible: If your deductible is $1,000 and the scratch damage is $900, you will still pay to fix the damage out of pocket, even after filing a claim.
  • Moving violations are on the record: These are “at-fault situations” that go on your record when you file a claim.
  • The repair cost is just a little higher than your deductible: It may be worth it to pay a little more out of pocket and avoid denting your claims history and risking higher auto insurance premiums.

That said, you may need to report any minor damage that results from a traffic accident, depending on your state’s laws. It could be necessary, even if you’re not going to pursue compensation for the damage.

While it’s your right to file an auto insurance claim for a covered risk, doing so multiple times may trigger a substantial increase in your premiums. Instead, you may want to pay out of pocket for minor damage, such as a scratch, to keep your insurance costs down in the long run. Would you like to learn more about making the most of your auto insurance protection without hurting your wallet? Contact the experts at ISU Wissink Insurance in Culver City, California, for all your coverage needs. We are ready to assist you with all your auto insurance questions and needs today.