Insurance should be bought and used for every accident or disaster | Insurance Myths

Insurance companies operate on the principle of risk management. When they see a pattern of multiple claims, they may assume you’re more likely to file additional ones in the future. This can lead to higher costs across the board—not just for your current policy but also when shopping around for new coverage. Other insurers can access your claims history through industry databases, making it harder—or more expensive—to get insured elsewhere.

Why Small Claims Might Not Be Worth It

Filing an insurance claim for every small accident could end up costing you more in the long run. Each claim you make can potentially lead to higher premiums, even for relatively minor issues. For example, repairing a scratched bumper or replacing a broken window might be more affordable to handle out of pocket than to deal with the increased rates that could follow a claim.

When to Consider Filing a Claim

This is why many insurance experts recommend reserving claims for catastrophic events—situations where the financial burden would significantly impact your ability to cover the cost on your own. Think of major property damage, medical emergencies, or substantial liability claims. For smaller issues, paying out of pocket can actually be the smarter financial decision, helping you maintain a clean claims record and keep your premiums as low as possible over time.

💵How a Higher Deductible Can Save You Money

One smart way to make the most of this strategy is by choosing a higher deductible. The deductible is the amount you’re responsible for paying before your insurance kicks in. Opting for the highest deductible you can reasonably afford typically results in lower premiums. This way, you’re keeping your monthly or annual costs down while still maintaining the safety net you need for larger, more costly events.

🛟The Big Picture: Insurance as a Financial Safety Net

Insurance is there to protect you during life’s unexpected challenges. By using it wisely, you’re not only ensuring it’s available when you truly need it, but you’re also keeping your overall costs in check. Treat insurance as a tool for catastrophic events rather than everyday mishaps, and you’ll maximize its value without overburdening your budget. Contact us to find the right coverage for your needs.