To claim or not to claim…that is the question. To figure out if it makes financial sense to file an insurance claim you need to do a bit of research and a bit of math.

First the math: An obvious rule is don’t file a claim if you’re sure the damage is less than your deductible. If it is, you won’t recover a dime from your insurer but the claim goes on your record and may put you in a higher risk/rate category – even if you didn’t collect any benefits.

If you’re not sure how much the damage is – try and figure it out before filing a claim – but don’t wait too long. If you wait too long after a loss to notify your insurer – the insurer may complain that you “prejudiced” their interests by failing to notify them promptly. They may even deny the claim on that ground.

More math: If the damage is less than a few hundred above your deductible – again – probably not worth filing. Pay it out of pocket. Yes it’s unfair to be penalized for using the insurance you’ve paid for. But because most states allow insurers to freely penalize their customers for filing claims – its up to you to protect yourself. Some states do limit the amount an insurer can surcharge you.

Now the research: Ask your agent point blank – how much will my rate go up if I file one, two or more claims? Does it matter how far apart they occur? Write down the answers and keep them with your insurance policy for future reference.

Now you can make an educated decision.

If damage is well above your deductible – by all means file it. That’s why you pay for insurance. If your rate goes up as a result – complain in writing to the insurer, and to your state regulator – and confirm that the increase was legal and consistent with the rating plan they filed with the state.

If after doing your research you learn that your insurer will penalize you for filing even one claim, consider switching to a more customer-friendly insurance company that has fairer rules. Many insurers will not penalize you for filing just one claim – even if it was your fault.