2008 Insurance Guide
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insurance
Claims that boost your insurance rates

Auto triggers

Unfortunately, it is much harder to pinpoint which types of claims may cause your auto insurance rates to spike.

For the consumer, automobile insurance is more volatile and very dependent on driving record, age and types and number of claims, Weston says.

Other rate-hike or policy cancellation triggers vary from state to state and company to company. However, factors that may be considered include whether you were driving while drunk, whether injuries incurred, and the severity and type of accident.

Some companies have a policy to forgive a first accident, but such rules are not ironclad.

To keep your premiums from increasing, it's usually a good idea to avoid filing an auto claim if you have accidents or damage totaling $1,000 or less. If you decide to take this approach, make sure to raise your deductible to $1,000, which can lower your premiums.

Paying out of pocket for damage covered by insurance is distasteful to many people. However, a series of small claims can result in increased premiums and possible loss of coverage.

It gets back to the notion of what insurance is all about: bailing you out from a large disaster, rather than the small things that annoy rather than harm.

"There are folks who are so strapped for cash and living paycheck to paycheck that even a minor fender-bender would be a catastrophe, and in that case they might want to keep a low deductible," Weston says. "But for most of us, you'd rather have money in the bank and cover the thousand-bucks deductible yourself."

In addition, if you back your car into a telephone pole or another car and nobody is hurt, it might be better to just pay for the damage yourself.

"My feeling is that if you have a little accident that's under the deductible, yes, your insurance company wants you to report it," Weston says. "But you should at least consider just handling it out-of-pocket if no one was injured and no police report was filed."

However, a word of caution: If you caused an accident involving other vehicles, you should report it to your insurance company, even if the damage to your own vehicle was negligible. The other party may, legitimately or not, file a claim for damages or injury. Having your version of the accident on record will go a long way toward having your insurance company on your side.

Also, many states require accident reports to be filed by the police. If they are, your insurer will be sure to find out whether you report it to them or not.

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