This study examines a #riskaverse #insured who buys deductible #insurance and uses a barrier strategy for reporting #losses. The #insurer has a bonus-malus system with two rate classes; shifting to a costlier class occurs upon loss reporting. The insured’s tendency to underreport losses is established under specific conditions, with her strategic reporting threshold derived. Allowing insureds to choose deductibles reveals positive equilibrium values, challenging the assumption of full insurance optimality. This work explains the common underreporting of losses across non-life insurance sectors.