Should you file small claims with your car insurance?

You may be thinking that it is wise to make the best use of the resources provided to you and take insurance whenever you get the chance so that you do not have to pay out of your own pocket. Normally, this type of thinking is the correct move financially; however, it is not the case with insurance. It is especially true with car insurance. Here are the reasons why.


Deductibles are also known as an excess. These are a very important reason why not to file small claims with your car insurance. This is because deductibles or excess is the amount that the client will have to pay by himself or herself. This means that if the damage to the car is very little, the client will have to pay the full amount himself or herself. Therefore, the client must be sure he has no deductibles when making small claims as otherwise he will have little or no help.

2. NCB

An NCB is a no claim bonus. These are basically the discounts that a car insurance company gives at the end of a year if you have not filed insurance. It can be understood that if you take car insurance for small claims you cannot avail this benefit for big claims. Normally, you get a 20% discount at the end of your first claim-free year after which you get more and more. However, the maximum discount which you can get is 50%, albeit this is a pretty large discount.

3. Risk of losing renewal

Sometimes if you have filed small claims many times, this will make the insurance company think you are a risk to them and thus they may deny the renewal of your policy. This is because insurance companies will be making losses from the insurance package they offered you. Therefore, you should not keep filing small claims especially if you want to keep your insurance.

Finally, note that it is not a hard and fast rule to not take car insurance with small claims. These are only some of the reasons why to not file small claims with car insurance. You must make sure that you do not neglect your circumstances. For example, if there is a third party which was completely at fault for the accident, insurance companies are generally more forgiving and do not stop renewal. You could even talk to an insurance agent to find out whether it is wise or not to file small claims with car insurance.