ABC - KXTV - Auto Insurance Claims

Published Date: 01/17/2024

Understanding Auto Insurance Claims in California’s Hard Market: When (and When Not) to File

When someone breaks into your car or damages it, your first instinct might be to call your insurance company right away. After all, that’s what insurance is for — right?

But in today’s volatile insurance market, that decision isn’t always so simple.

In a recent segment from ABC 10 Sacramento, an insurance expert explained how auto insurance claims — especially minor ones — can affect your long-term insurability and premiums, particularly as insurers scale back and re-evaluate their risk portfolios in California.

The discussion highlights a key truth that every driver should understand in 2024:
Not every loss is worth filing a claim for.

Here’s a closer look at what this means, why it matters, and how to make smart decisions about when to involve your insurer.

1. When a Break-In Becomes a Comprehensive Claim

If someone breaks into your vehicle — for example, shattering a window or damaging the door — that’s considered a comprehensive claim, not a collision claim.

Comprehensive coverage applies to incidents where your car is damaged by something other than a crash, such as:

• Theft or vandalism
• Fire or flood
• Falling objects
• Damage from animals

In the segment, the insurance expert clarified that such break-ins fall under “damage to your vehicle while not in motion.”

The good news? In California, these claims are not chargeable — meaning your insurer cannot raise your rates simply because you filed a comprehensive claim for a break-in.

That protection stems from California’s strict consumer regulations, which differentiate between at-fault and not-at-fault losses.

So, if your car is vandalized, you can typically file the claim without fear of an immediate premium increase.

However — and this is key — if the stolen property inside the car is personal (like your laptop or gym bag), that’s another story.

2. Personal Property Theft Is Usually a Homeowners Claim

While your auto insurance covers physical damage to the car itself, it generally does not cover personal belongings inside the vehicle.

If your dry cleaning, purse, or electronics are stolen, you’ll likely need to file a claim under your homeowners or renters insurance policy instead.

That’s because most property insurance policies include coverage for “personal property away from home.”

But there’s a catch: those claims are usually considered chargeable, meaning they can lead to a premium increase or even affect your policy renewals.

As the expert explained:

“If someone steals property from your car — like that dry cleaning you have in the back or a laptop — that may require your property insurance, and it’s considered personal property away from home. These are chargeable claims on most homeowners insurance policies, so you could expect to see that premium increase.”

In short:

• Car damage? Covered under auto (comprehensive) and not chargeable.
• Stolen belongings? Covered under home/renters — but may raise your rates.

3. Why Insurers Are Watching Claims More Closely Than Ever

The advice used to be simple: “If you have a claim, file it.”

That’s no longer the case.

California’s insurance marketplace has changed dramatically in recent years. Between wildfires, inflation, and insurer withdrawals, most carriers are now closely monitoring every policy — not just for losses, but for frequency and behavior.

As the expert warned:

“Companies that have policies in force right now are keeping a very clear eye on everyone’s policy — who’s putting in claims and who’s not and what’s going on.”

This increased scrutiny is part of a broader industry trend toward shrinking exposure — insurers reducing their risk by limiting new business, tightening underwriting, and non-renewing policies in high-cost areas.

When insurers are trying to control exposure, even small claims can make a difference. A homeowner or driver with frequent low-value claims may be viewed as a higher-risk customer — even if none of those claims were their fault.

4. When It’s Better Not to File a Claim

Here’s where it gets practical.

The expert offered advice that might seem counterintuitive:

“If you have a claim and it’s something — I hate to put it this way — but if it’s something you can probably absorb the cost on, you’re probably better off not to file the property claim.”

This advice doesn’t mean you should never use your insurance. It means you should use it strategically.

Ask yourself these questions before filing:

1. How much is the loss compared to my deductible?
   If your deductible is $1,000 and the total repair is $1,200, you’re only getting $200 from your insurer — and it may not be worth the claim history.
2. Is this likely to happen again?
   Frequent claims — even small ones — can trigger underwriting reviews.
3. Could I fix it out-of-pocket without hardship?
   Paying for small, one-time damages may protect your long-term insurability.
4. Is it covered under a non-chargeable claim type?
   Comprehensive (like a break-in or hail damage) usually isn’t penalized. Property or liability claims may be.

Ultimately, it’s about balancing short-term savings against long-term stability.

5. How to Protect Yourself Before You Need a Claim

Even if you decide not to file, you can take steps to minimize risk and improve your insurance profile.

✅ Prevent Vehicle Break-Ins

• Don’t leave valuables in sight.
• Park in well-lit or secure areas.
• Consider dash cams or security systems.

✅ Review Your Coverage Annually

Make sure your deductibles, limits, and endorsements still make sense for your financial situation.

✅ Ask About Multi-Policy Bundles

Bundling your home and auto policies can provide stability and discounts — but remember that frequent claims in either line can still affect both.

✅ Work With an Independent Broker

Independent brokers understand the market fluctuations and can help you make informed decisions — including when not to file a claim.

6. California’s Unique Claims Landscape

It’s important to understand that California’s insurance environment is unlike any other in the U.S.

Thanks to Proposition 103, passed in 1988, the state maintains strict oversight of how insurers calculate and adjust rates. That means:

• Insurers must justify every rate increase to the Department of Insurance.
• Companies can’t penalize drivers for certain types of claims (like not-at-fault or comprehensive).
• Every insurer’s loss experience in California must be filed publicly.

Those protections are vital — but they also make the market less flexible.

As insurers face rising reinsurance costs and catastrophe losses, many have responded by freezing new policies or tightening claims scrutiny to protect solvency.

That’s why policyholders are now advised to think more strategically about every claim they file.

7. The Bigger Picture: From Claims to Coverage Stability

While this conversation began with something as ordinary as a car break-in, it reflects a much larger issue: the fragility of California’s insurance ecosystem.

Today, insurers are not just evaluating risk — they’re reevaluating relationships. They’re deciding which customers they want to keep.

Consumers, in turn, must adapt by understanding how small actions — like filing a $700 theft claim — fit into the bigger risk picture.

It’s no longer just about protecting your car or home. It’s about protecting your insurability.

8. Final Thoughts: Smart Coverage, Smarter Decisions

If your car is vandalized or broken into, remember this:

• Auto damage = Comprehensive claim, not chargeable in California.
• Stolen items = Property claim, may affect homeowners rates.

But more importantly — consider the bigger context.

With insurers tightening their books and regulators balancing reform, every claim you make becomes part of a broader equation that determines your access to coverage in the future.

Insurance is still there to protect you — but in today’s market, using it wisely is key.

As the ABC 10 expert put it best:

“If it’s something you can absorb, you’re probably better off not to file the claim.”

It’s advice worth remembering — not because insurance isn’t valuable, but because stability in coverage has become the most valuable asset of all.