When it’s a toss-up
Your toughest decision-making challenge comes when the damage is to your own vehicle and property. Filing a claim would probably produce a tempting payout of several hundred to more than $1,000, after the deductible. You must consider an unknown “x” factor of how your claim might impact your premiums. Unfortunately, it’s impossible for consumers to know in advance how much their premiums will increase, and for how long, to weigh that against a claim payout. But among our subscribers, 7 percent of claimants felt that their insurer unfairly raised their premium as a result of their claim. (We didn’t ask about fair premium increases.)
Most states regulate “chargeable” accidents, which are loss payouts that auto insurers are allowed to count against your driving record in calculating your risk and setting your premiums. The rules vary from state to state, but payout thresholds of $500 to $1,000 are typical, which means that accidents costing the insurer less than that can’t raise your rate. Your insurer can tell you the rule in your state.
Major insurers also apply their own loyalty programs, which give “accident forgiveness awards,” based on how long you’ve been with the company and your good driving and payment record. So an insurer might forgive a $1,500 accident if you’re a relatively new customer, but a $5,000 accident would be overlooked if you’ve been with the company for five years. Forgiveness, of course, is generally a one-time benefit, so don’t rely on it for a series of accidents. In some cases, forgiveness above the state threshold is a formal option that can cost extra.
When you shouldn't report
If the damage is minor and confined to your own vehicle and property, maybe from backing into your fence or garage door, you’re typically not required to report it to your insurer if you’re not making a claim. It also doesn’t make economic sense to do so if the repair cost is smaller than or not sufficiently bigger than your collision coverage deductible.