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Have you ever been involved in a minor car accident and wondered whether you should report it to your auto insurance company or just pay for the damage out of pocket?
Jim Armitage, an insurance agent in Arcadia, California, says that some people try to avoid filing car indemnity claims, specially following minor accidents that caused no injuries and little fomite wrong .
That ’ mho because drivers fear that filing an car indemnity claim will trigger an increase in their car policy rates. Some people would quite negotiate an out-of-pocket settlement with another driver than risk higher costs, he says .
But failing to file a claim could have unplayful consequences in some cases. Let ’ s take a deeper look at what to consider when deciding whether to file an car indemnity claim .
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Why you should consider filing an auto insurance claim
When you ’ re involved in a collision with another vehicle, you ’ re normally better off contacting your policy party right away, says Carole Walker, administrator film director of the Rocky Mountain Insurance Information Association .
Walker notes that car policy liability coverage can help cover you in a couple of ways .
- It can help pay for property damage or injuries you cause while driving (up to your policy limits)
- And it can help pay for your legal defense costs if you’re taken to court
If you try to reach a fiscal agreement with another driver on your own, you could run the hazard of being sued late if the other driver discovers that the damage to their car was more extensive than they believed, Walker adds .
And if you fail to report the accident to your insurance company promptly and the other driver makes a claim for relate injuries or damages that crop up subsequently, your insurance company may be able to deny coverage .
Because of this, the best room to make certain you receive full coverage is to report a collision vitamin a soon as it happens .
“ Car repair bills can be higher than anyone think they would be, ” Walker says. “ Most of the time, it ’ south better to have your indemnity company involved. ”
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When it could be OK to not file an auto insurance claim
It may make sense to forgo filing a claim and merely pay the repair shop bill out of pouch if you ’ re involved in a minor single-car accident in which no one is injured and no one ’ second place is damaged but yours, Walker says .
For exercise, you may not need to file an car policy title if you hit a mailbox while backing out of your own garage .
If your car policy policy includes collision coverage, it could pay to repair or replace your vehicle no count who was at fault in the accident, once you pay your policy deductible .
When deciding whether to file a claim, consider whether the cost of repairing your car is less than or comparable to the cost of your policy policy deductible. You ’ ll besides want to check whether you ’ re required to report the accident to the insurance company or your local department of transportation assurance .
If the cost of haunt is less than or near your deductible sum, and you ’ re not otherwise required to file a claim, it may not make sense to file a claim .
For example, if you get into a collision that causes $ 1,200 in price and your deductible is $ 1,000, you ’ ll have to pay $ 1,000 toward repairs, with your indemnity policy alone covering $ 200. In this character, it may not be worth filing a claim if it could put you at hazard for a bounty increase — more on that below .
Does filing a claim increase car insurance?
Whether your indemnity rates go up after an accident depends on your indemnity company, the circumstances of the accident, and whether you have accident forgiveness — which is when insurers allow dependable drivers to get in one accident without their rates increasing .
When deciding whether to raise your rates, here are a few factors your policy party will consider .
- How bad the accident was — Greater damage will likely lead to a greater rate increase because the insurer must make a larger payout.
- Who was at fault — Your rates can increase if the accident was your fault, but might stay the same if the other driver was at fault. But even if you weren’t at fault, your insurance company may still increase your rate in some states, sometimes called “no-fault” states. But this increase may not be as much as if you were at fault.
- How much the company values you — If you’re a historically safe driver, you are cheaper for auto insurers to cover. So if your driving record is clean and you’ve been with the company for a long time, your insurance company may decide to give you a smaller rate increase compared to someone with a poor driving record.
Drivers with few or no accident claims typically get the lowest rates, because they ’ re perceived as good policy risks, meaning that insurers have decided that these drivers likely won ’ metric ton file a claim that an insurance company will have to pay out .
What factors contribute to your car insurance rate?
What’s next?
No one wants their car indemnity rates to increase as the consequence of a car accident .
But if you hide an accident from your indemnity company by paying for another driver ’ randomness car repair costs out of scoop, you could expose yourself to worry late on. That ’ s why experts and car insurance companies recommend reporting an accident with another driver a soon as it happens .
If your rates increase after filing an car indemnity claim, you can work on reducing them over time by making certain your driving read remains fairly, without accidents or traffic tickets.
You may besides want to shop for a modern policy regularly. Prices are competitive, and it may be potential to find an insurance company who will charge you less than your current carrier .
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