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We've all heard that filing a car insurance claim can boost your premiums.  So what should you do the next time your fender gets bent?

Although it hardly seems fair given the out-of-pocket costs you've incurred paying your car insurance premiums, it may just be in your best interest to pay out-of-pocket for any "small" damages to your vehicle, rather than submitting a claim to your insurance agency.

There is no one best answer to the question of whether to file a claim.  The amount that your premium may rise after filing a claim is different from state to state.

What's more, the amount of the rate increase could stay in effect for five years, and should you be unfortunate enough to have a second claim during that time, you could be facing yet another rate jump.

Keys to note:
  1. Know what type of claim to file. A "liability" claim for injuries or damage to another person’s property raises your rate the most. A "comprehensive" claim for damage to your own vehicle that isn't caused by an accident but rather a break-in or a rock thrown through your windshield raises your rate the least.
  2. Consider the cost of your claim. Smaller claims will have a lesser impact on rate increases, although multiple small claims in a short period of time can be just as bad as one large claim.
  3. Protect yourself, especially if other people are involved.  Things may be worse than they first appear.  That ding in the fender may be more expensive to fix than expected.  Or maybe the person involved in an accident doesn't appear injured, but later reports neck or back pain.  If you are involved in a one-car accident or perhaps you parked just a little too close to that pole, you may want to pay for the damages yourself, rather than filing a claim.
  4. Don't delay.  Most companies limit the time you have to file your claim.  If you wait too long, you may not be covered.  Be sure to check out the terms of your policy.
  5. Know before you call.  Be careful before calling your agent or the insurance company's claim line.  Just inquiring whether a claim you're thinking about filing will raise your rates may raise a red flag for the insurance company.  Some may enter this info into a database called your CLUE report, which is examined periodically with policy renewals.  Your insurer may also find out about an accident if there is a police report, whether or not you file a claim.