By ALLEN MCQUISTON
Jemez Insurance Agency
Serving Los Alamos Since 1963

Most people assume insurance works like a scoreboard. One big claim feels like a major strike, while a few small claims feel harmless—almost expected. After all, why have insurance if you can’t use it for the little stuff?

That assumption is understandable. It’s also wrong.

In practice, multiple small claims often cause more long-term damage than a single large one. And the reason has less to do with dollars and more to do with patterns.

Insurance Doesn’t Just Measure Cost. It Measures Behavior.

From the outside, a claim looks like a repair bill. From an insurance company’s perspective, it looks like a signal. A large claim—say a major accident or a significant home loss—is often viewed as an event. Something sudden. Something unusual. Something that could happen to anyone.

Multiple small claims tell a different story. They suggest frequency. And frequency matters more than most people realize. Even when each claim is minor, together they create a profile: this policy is more likely to be used again.

Small Claims Create a Track Record

Every claim, no matter the size, becomes part of your insurance history. Over time, insurers look at patterns like:

• How often claims are filed
• How close together they occur
• Whether they’re similar in nature
• How recently they happened

Three small claims over a few years can raise more red flags than one large claim from a freak event. Not because of the money paid out, but because the likelihood of future claims appears higher.

Insurance is forward-looking. The past is only useful as a predictor of what might come next.

Premiums Respond to Frequency Faster Than Severity

One large claim often results in a noticeable premium increase that fades with time. Small claims, stacked together, tend to do something more subtle and more lasting.

They can:

• Trigger non-renewals
• Limit which carriers are willing to offer coverage
• Remove preferred pricing tiers
• Keep rates elevated longer than expected

The increases may not be dramatic all at once. They compound quietly.

That’s why people are often surprised when they shop around years later and discover fewer options—or higher prices—despite never having “a big claim.”

Deductibles Change the Math More Than People Think

Small claims also run headfirst into deductibles. A $1,200 repair with a $1,000 deductible means the insurer only paid $200—but the claim still counts fully in your history.

• From a financial standpoint, you gained very little.
• From an underwriting standpoint, you gained a claim.
• That imbalance is where people get hurt.

When One Big Claim Makes Sense—and When Small Ones Don’t

There are times when filing a claim is absolutely the right move. Large, unexpected losses that would meaningfully disrupt your finances are exactly what insurance is designed for. 

• Smaller losses are different. They require judgment.
• The question isn’t “Is this covered?”
• It’s “Is this worth turning into a claim?”
• That’s a harder question—and a more important one.

The Smarter Way to Think About Claims

Insurance works best when it’s treated as protection against disruption, not a maintenance plan.

People who tend to fare best over time usually:

• Handle minor issues out of pocket when possible
• Use insurance for serious, unpredictable losses
• Ask questions before filing, not after
• Think long-term instead of claim-by-claim

That approach isn’t about avoiding insurance. It’s about using it intentionally.