How to Keep Your Car Insurance Premium From Soaring

WDC NEWS 6 STAFF May 23, 2025

12 3 minutes read

How to Keep Your Car Insurance Premium From Soaring

Are you “that guy” who keeps filing insurance claims and raising the rates for all of us? What’s happening there, and how can we deal with it?

Before we get into exploring this issue, let’s all agree that somebody who files auto insurance claims will be charged a higher price than somebody who does not. I mean, if an insurance company has to keep paying out dollars for claims by one person, that person’s premium should reflect that.

Just like the person who never files a claim should pay less for the same coverage. Fair?

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Would it surprise you to know that some people file claims over and over again over the years, and some people simply don’t? It’s true.

Some drivers show a pattern of frequent claims, often for the obvious reasons such as aggressive driving habits, living in a congested area or driving a ton of miles. So sure, we can understand that these folks may have to file more claims.

Money probably plays a part

But what if I told you that even with the same external factors listed above, there remains a clear delineation between claim filers and non-filers. So what gives?

There are several factors at play here. One may be as simple as financial strength. A driver with access to cash may file fewer claims because they have the money to pay for the damage themselves, especially for smaller issues. The “why get a mark on my driving record?” resonates with them, and they have the means to protect that driving history.

Others, even if they wanted to, simply cannot absorb a loss without filing a claim.

It could be bonus hunger

There’s also this thing called bonus hunger, a psychological phenomenon where certain personality types will chase discounts. This is also known as medium maximization. In some cases, an individual who can’t afford not to file a claim may decide not to (and just let their car remain damaged), all in the name of keeping a claim-free discount or maintaining their perceived proof of “good driving.”

OK, so what does all this mean? Keep reading, I promise the payoff is coming. The end result will be a way for you to save money on your car insurance.

So, say we have the same set of circumstances for two hypothetical drivers — same city, same ZIP code, same limits of coverage, same car, same driving habits, same credit score. Everything is the same except for one thing. These two people — or risk profiles, as an insurance company would view them — have a very discernable difference in their propensity to file a claim. One will file over every little ding. The other will not. And every time the first guy files a claim, he contributes to the issue of everyone’s rising rates.

What’s to be done about it?

Those little bumps on your car are annoying. Say you come back after grabbing your to-go Starbucks and find someone has brushed the side of your shiny new bumper. You have choices here. As Marcus Aurelius said in his famous diary, Meditations, “You don’t have to turn this into something. It doesn’t have to upset you.”

You don’t have to file a claim. Sure, you want the bumper to be like new, and you don’t want to pay for the fix yourself, but you could choose to be like Marcus and just leave it be. After all, everything still works the way it’s supposed to, and all there is is a little scratch that most people won’t even notice.

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This is the first step in transforming yourself from a claims filer to a claims non-filer, and by doing that, you get to enjoy the benefit of lower auto insurance premiums.

I’m not saying to let it go if your car is bashed and looks like a Transformer halfway through the process of transforming, or if the damage has made your vehicle unsafe. I’m talking about the stuff that really only you see, or only you want fixed on principle.

That principle will cost you in your claim history, which will translate into higher auto insurance rates.

Be like Marcus.

Want to learn more about insurance? Visit KarlSusman.com.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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