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No Claims DiscountIf you don't make any claims on your auto insurance over a specified period of time, you will likely qualify for a discount on your auto insurance. While this might no make sense on the surface, auto insurance companies have done studies that show that people who make an auto insurance claim are more likely to make another claim in the future and therefore sometimes charge a higher auto insurance rate to those that have made a claim in the past few years.
The time period on not making a claim and receiving the auto insurance discount varies from one auto insurance company to another. In general, however, most give the discount to those that haven't made a claim in the last 3 to 5 years.
Due to the way that auto insurance companies charge rates, it makes sense to take some time to consider whether it is in your best financial interest to file a claim. For example, if your auto insurance has a $200 deductible and you have $250 worth of damage done to your car, you need to consider if the $50 you'll get back is worth the risk of higher auto insurance rates over the next 3 to 5 years.
There is no black and white answer to this question and you need to look at your own financial situation and make the best judgement when deciding whether or not to make a claim. Being aware that having a claim on your record may increase the auto insurance rates that you pay, however, is a factor to consider when making the decision.
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