What Does Halloween Have to Do With Insurance Deductibles?

During the Halloween season, pranks like an egged car or a broken window from a smashed pumpkin often become more common. If any of these, or another damaging prank, happens to you, you may want to consider whether or not to make a claim on your auto or homeowner’s insurance policy if your home or car suffers some damage due to Halloween tricks. Here’s a guide to help you decide.

Know How Your Deductible Applies to Halloween Prank Damage

Every homeowner’s insurance and car insurance policy comes with a range of deductible amounts from a few hundred dollars to well over $1,000. That deductible is the portion of the cost of the repair or replacement of your damages you must pay before your insurance policy pays the remainder of any claim (and deductibles generally do not apply to the liability portions of your policies), according to the Insurance Information Institute, an industry-funded consumer education organization. A deductible applies each time you file a claim and is “deducted” from your claim amount so you don’t have actually pay the deductible to the insurance company.

“Because of the way deductibles work, it makes sense to be aware of your deductible amounts for each policy,” Michael Barry, vice president of media relations for the Insurance Information Institute, said. “Then, if you experience damages on Halloween, weigh the cost to repair or replace any damage against that deductible amount you’d need to pay out of pocket and whether that would cause your household financial distress.”

Should You File a Claim?

Even though policies generally cover your home and car for accidents, vandalism and theft damages (the category many Halloween pranks fall under), Barry said if you can financially absorb that amount, it’s usually not worth it to make a claim.

Damages to your home or car that may occur on or near Halloween — like toilet-papered trees or smashed pumpkins — can be more of a messy inconvenience than expensive to repair. When it comes to these smaller damages that may cost less than or slightly above the deductible amount to repair, Barry suggested keeping an emergency savings fund to cover these smaller repair costs yourself instead of making a claim on your insurance policy.

Keeping that insurance deductible amount in an emergency fund can help protect you from resorting to a credit card to cover any out-of-pocket damages and from making small claims that could cause premium rate hikes.

But if the damage is much greater than your deductible — such as a Jack O’ Lantern that causes a house fire, eggs on your car that destroy the paint or a serious burglary — that’s when you may want to resort to your insurance to help you with the repair and replacement costs.

When Making a Claim Can Cause a Rate Hike

According to the Department of Motor Vehicles, car insurance rates can go up after you file a claim, although many insurance companies offer “accident forgiveness” as additional coverage so this doesn’t happen because of one accident. Rate hikes are usually reserved for collision claims or claims involving dangerous behaviors (like drunk driving), according to Barry. Either way, you want to be sure it’s worth it to file a claim for damage to your car from Halloween pranks, as making several claims on your auto insurance policy can raise your risk profile. This is something insurers use when it comes time to set your premiums.

When it comes to homeowner’s insurance, Barry said it’s fairly similar to auto insurance. Homeowners who file more claims may be seen as riskier to insure, so it’s important to keep this in mind during your decision process.

“Several damage claims in a short time period such as a year or two could trigger a rate hike, depending on your risk profile, your insurance company and your claims history with the company,” he said.

If you’re considering switching providers, it’s important to know that your claims are only part of what they may look at to determine your rates. Some providers also review a version of your credit reports, so it’s a good idea to know where yours stand before shopping around. You can see an overview of your free credit report, updated every 14 days, on Credit.com.

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