Guides
Should you file a claim or pay out of pocket?
How to weigh a small claim against your deductible and a possible rate increase, which accidents you should report anyway, and how fault changes the math.
Pay out of pocket when the damage is only a little more than your deductible, nobody else is involved, and an at-fault claim would likely raise your premium for several years. File a claim when someone is hurt, another driver or their property is involved, the damage is large, or the loss was not your fault. Either way, report any accident involving another party to your insurer, because reporting and claiming are not the same thing.
Reporting is not the same as claiming
Most policies require you to notify the insurer promptly of any accident or loss, especially one that could lead to a claim against you. If you skip that notice and the other driver later files an injury claim, your insurer may argue you breached the policy's notice condition. Telling your insurer an accident happened does not oblige you to ask for payment for your own car.
Paying privately for the other driver's damage is the risky version of "not filing." If their injuries or repairs turn out larger than you expected, you may have no help from your insurer if you did not report the accident. Keep private settlements to cases where nobody else is involved, or get a signed release and still notify your insurer.
The basic math
A first-party claim for your own car pays the repair cost minus your deductible. Against that, weigh what the claim may cost you later:
- A surcharge or loss of a good-driver discount if the claim is treated as an at-fault accident, usually for several years; how long depends on the insurer and the state.
- A mark on your claims history. Insurers share claim records through databases such as LexisNexis's CLUE report, which other insurers check when you shop. Even a reported loss with no payout can appear, depending on how it was recorded.
- Losing a claims-free discount that you have built up.
The Should I file a claim? calculator does this comparison for you. Here is the logic by hand.
A worked example
Say you back into a post and the repair estimate is $1,800. Your collision deductible is $1,000, so a claim would pay $800. Assume your annual premium is $1,600 and your insurer would apply a 25% at-fault surcharge for three years.
| File the claim | Pay yourself | |
|---|---|---|
| Insurance payment | $800 | $0 |
| Your repair cost | $1,000 (deductible) | $1,800 |
| Estimated extra premium over 3 years | $1,600 × 25% × 3 = $1,200 | $0 |
| Total cost to you | $2,200 | $1,800 |
In this hypothetical, paying yourself saves about $400. Change the inputs and the answer flips: with a $500 deductible and a $4,000 repair, the claim would pay $3,500, which outweighs the same $1,200 surcharge. Surcharges vary widely, so ask your agent how your insurer treats an at-fault claim before deciding. Your deductible choice also shifts the math; see the deductible break-even calculator.
When fault changes the answer
If the other driver was at fault, you can usually claim against their liability coverage, and you pay no deductible on that claim. An accident where you are clearly not at fault generally should not count against you, though how insurers treat not-at-fault claims depends on state rules and company practice.
California is one example of a state that writes this down. Its regulations (10 CCR 2632.13) treat a driver as "principally at fault" only when their actions were at least 51% of the legal cause, and for property-damage-only accidents only when the total damage exceeded $1,000. The rules also presume a driver was not principally at fault when, among other situations, the car was lawfully parked, was struck in the rear (and the driver was not convicted of a moving violation), was hit by a hit-and-run driver, or hit an animal or a falling object (10 CCR 2632.13). Other states have different rules, or none; check with your state's rules or insurance department.
Comprehensive claims are different
Hail, theft, vandalism, a cracked windshield, a deer strike or a fallen tree are comprehensive claims. They are not at-fault accidents, and many insurers do not surcharge them the way they surcharge collisions. Several comprehensive claims in a short period can still affect your renewal, so the same weighing applies to small ones. Glass claims are often the exception worth filing, because some states and policies waive the deductible; see windshield and glass claims.
Always file in these situations
- Anyone is injured, including you or your passengers. Injury costs can grow for months.
- Another driver, pedestrian or property owner is involved and could make a claim against you.
- Fault is disputed. Let the insurers sort it out with the evidence.
- The damage is large relative to your deductible, or the car may be a total loss.
- The other driver left the scene or is uninsured. Uninsured motorist coverage often has short reporting deadlines; see hit-and-run accidents: how to file a claim.
- The car was stolen. A police report and prompt claim are needed for any recovery.
Ways to soften the impact
- Accident forgiveness. If your policy includes accident forgiveness, your first at-fault accident may not raise your rate. Check the conditions before relying on it.
- Ask how the claim will be rated. An agent can often tell you whether a given scenario would be surcharged.
- Shop at renewal. Surcharges and how long they last vary by company, so a claim that hurts with one insurer may matter less with another.
Key takeaways
- Report every accident involving another party to your insurer, even if you plan to pay for your own damage.
- Compare the claim payment (repair cost minus deductible) with the likely surcharge over the years it stays on your record.
- Not-at-fault and comprehensive claims usually weigh less on your premium than at-fault collisions, but rules vary by insurer and state.
- Always file when there are injuries, disputed fault, large damage, theft, or an uninsured or hit-and-run driver.