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Filing an insurance claim can feel like walking a tightrope—you want to use the coverage you’ve been paying for, but you also want to avoid premium increases. Insurance should feel more like the safety net below the tightrope, and at Starr Mathews Agency, we focus on helping make these choices easier. Whether you have personal auto and homeowners’ insurance or a commercial policy for your business, understanding how claims affect your rates can help you make smart decisions.

Why Claims Can Affect Premiums

Insurance premiums are calculated based on risk. The rates you are paying now are already a result of your current claims history, personally or in your business. Your current insurance company reviewed this because when you file a claim, your insurer sees a record of a loss that tracks for several years. Losses signal to an insurance carrier that you may have a higher chance of future claims. Some claims have little or no impact on premiums, while others can trigger noticeable increases—or even make you harder to insure in the future.

The key is knowing:

• When to file and when to pay out-of-pocket.

• How to handle small losses vs. large ones.

• What preventive steps can reduce both claims and costs.

Here are a few examples of those key considerations. Keep in mind that contacting your insurance agent, who will ask the right questions and review your coverages, is always the best way to determine when to file a claim.

Personal Insurance: Auto and Homeowners

Example 1: Auto – Small Fender-Bender
If you back into a telephone pole in a parking lot and cause $600 in damage to your vehicle, but your deductible is $500, it might not make sense to file a claim. You’d receive only $100 after your deductible, but the claim could stay on your record for three to five years. Paying for minor repairs yourself can keep your rates steady. The suggested thought process changes if you have damaged the telephone pole or another vehicle, since that would trigger liability coverages.

Example 2: Home – Minor Storm Damage
A small windstorm takes off a few shingles from your home’s roof, causing $1,200 in repairs. With a $1,000 deductible, the insurance payout would be minimal. Filing might raise your homeowners' premium for years to come. If repairs are manageable, managing it privately might be the better choice.

General Guideline of When to File for Personal Policies:

• Major damage from a covered peril (house fire, severe car crash).

• Liability claims involving injury or property damage to others.

• Losses well above your deductible that you can’t afford out-of-pocket.

Commercial Insurance: Protecting Your Business

Example 3: Slip-and-Fall at Your Store
A customer trips in your store and sprains an ankle. Even if the injury seems minor (and even if there was no trip hazard on your part), a liability claim is more likely worth filing—medical costs and legal exposure can quickly exceed expectations. There is also a chance it will be small enough for medical payments coverage to address, which is less likely to trigger an underwriting review at renewal. Either way, protecting your business financially and legally outweighs the risk of a rate increase.

Example 4: Equipment Damage in a Manufacturing Plant
A piece of machinery is damaged, costing $2,000 to repair, and your commercial property deductible is $1,500. If you can absorb the repair cost, you may choose not to file, especially if you’ve had prior claims. Frequent small claims can make your business a higher risk for insurers.

When to File for Commercial Policies:

• Any situation with possible bodily injury or third-party property damage.

• Losses that significantly exceed your deductible.

• Events that require immediate documentation for regulatory or contractual reasons.

Tips to Minimize Rate Impact

1. Know Your Deductible Before Filing
   If your loss is close to or below your deductible, filing is usually not worthwhile.

2. Report Liability Incidents Promptly
   If there’s a chance someone could claim injury or damages, file right away. Delays can hurt your defense and lead to larger payouts.

3. Focus on Prevention
   Good maintenance, driver training, workplace safety programs, and regular property inspections reduce both personal and commercial claims. Even if you have a claim when you can show the due diligence you have done in advance, it will help your insurance agent negotiate better rates.

4. Talk to Your Agent First
   As mentioned, your insurance agent can help you evaluate whether filing a claim makes sense. At Starr Mathews Agency, when you contact us to discuss your coverage, a conversation isn’t automatically reported to your insurer, so you can get advice without committing.

Filing a claim is about balancing your immediate need for coverage with the long-term effect on your premiums. For personal policies, it often makes sense to pay small losses out-of-pocket. For commercial policies, potential liability or high-value damage usually warrants a claim, and it is more important that you show how your company has taken measures to prevent losses. In every case, working with your insurance agent can help you make the smartest decision—keeping your protection in place without sending your rates through the roof. At Starr Mathews Agency – we care about your roof and your rates. Give us a call and let our knowledge be your best insurance.