Trio Times You Shouldn – t File a Car Insurance Claim
Trio Times You Shouldn’t File a Car Insurance Claim
It’s common wisdom that one of the very first steps after an accident is to get a hold of your insurance company. But are there exceptions to that rule? More importantly, what will a claim do to your insurance rate?
Sometimes, after an accident, it’s demonstrable that you’ll want to get ahold of your insurance company as quickly as possible in order to file a car insurance claim . Major harm has been done, or someone is hurt. But the truth is, not all of the ten million car collisions that happen annually are serious—in fact, the vast majority of them are non-fatal. That means that ems of thousands of folks are inconvenienced on a daily basis by a minor accident.
Of the ten million car accidents that happen annually, most are not fatal.
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Chances are, you’ve likely had someone suggest to pay you out of pocket post-fender bender, or maybe you’ve even been the person begging proposing to avoid getting insurance involved. Quoted dreamed to know: Is this ever a good idea? Are there some cases in which the possible rate increase might not be worth telling your insurance company about your accident over? As usual, we headed to the experts. Here’s what we found about when to file a car insurance claim—and when to keep mum.
Very first, a few Post-Accident Reminders Before Filing a Claim
We have a longer post on what to do after a car accident that’s worth checking out, but for this post, we spoke with Christin Wiley, a individual risk advisor based in Tennessee, about the few things she always reminds her clients are critical financially after an accident.
“A duo little tips I tell my clients about filing accidents: Very first of all, I always suggest attempting to file a police report or an incident report, so that the other party won’t be able to come back after the fact and attempt to twist the truth (I’ve seen that done all too many times). 2nd, I tell people to never discuss the details of the accident with anyone but the police and insurance company. It’s up to the police and insurance adjustors to determine the fault of the accident, not you. I have heard of too many people telling, “Wow, I’m so sorry, I didn’t mean to do”
Sound advice: Get the police and your insurance involved, and keep your mouth shut. But, Wiley adds, this isn’t always necessary, depending on the accident.
And One Giant Disclaimer
Wiley says she always tells her clients the same thing: Check your insurance policy documents. “Many insurance policies state that you must notify the insurance company of anything that might lead to a potential claim. Also, there are many different state and insurance company specific time thresholds to filing a claim; so, always know of any applicable time thresholds.”
And of course, if anyone is even remotely injured, always file a claim. More on that below.
Now that we’ve got that out of the way, tho’:
Trio Times it Makes Sense Not to Involve Your Insurance Company
- It was a one-car accident and you’re not injured, or if you are, you’re able to pay for your medical expenses yourself.
- You can afford to pay for the costs of harm to your vehicle—or the costs of the repair are close to or not much over the cost of your deductible.
Joseph Ritter Jr., a Certified Financial Planner based in Florida, once had a little harm done to his own car that ended up costing him much more than he expected. He explains:
“About ten years ago, we were visiting relatives out of town when I noticed that someone had pried the emblem off our car and scraped the paint. Albeit it was vandalism, I didn’t know where it occurred. Thinking I was protecting myself, I called our insurer. When we got back home, I went to a local bod shop, and they gave me an estimate of less than $100 to repair the harm. That little incident stayed with us for five years. Even however the claim had no monetary influence, just the fact that we made a claim affected our insurance rates. Most if not all insurers require prompt reporting of claims. However, for minor incidents not involving injury, property harm or when the vehicle is still safe to drive, my advice is to make a police report and obtain an estimate of the harm before contacting the insurer. Just be sure you do it promptly.”
So let’s break down that math:
- The cost if Joseph had simply gotten it repaired: $100
- The cost of five years of an extra $100 tacked onto each six-month policy for the claim: $1,000
Paul Moyer, an independent insurance agent based in Florida, was a bit more bold in his claim: “There are very many times that filing an auto insurance claim is a bad idea,” Moyer says. “It truly has to do with the math of the policy.”
“I just had a client that backed into his own vehicle. He caused $1,500 maximum of harm and $1,200 minimum. His deductible was $1,000 so he had to pay that before the insurance would kick in anything. So his maximum out of pocket would be $500. If he filed the claim his rates would also go up and he would very likely end up paying back that amount over about 12-18 months and then just get penalized from there on out. This happens frequently in puny accidents where a driver could do much better by just paying out of pocket.
- There’s little to no harm to someone else’s vehicle or property.
This one is straightforward: If you happened to smooch a giant SUV and not leave any lipstick, so to speak, you might not need to get insurance involved. But serious smooches (aka actual accidents) require trading of individual details.
And three Times When You Need to File a Car Insurance Claim
Just as there are times it might work in your favor not to involve your car insurance company after a crash, there are times when you indeed should file a claim:
1) Anyone is injured and your vehicle is involved . If you, passengers in your vehicle, anyone in the other party, or any pedestrians are injured from a crash, you’ll need to file a claim–especially if there’s a good chance you’ll be found at fault. Medical expenses can skyrocket quickly, and not filing a claim can leave you open to litigation. If you wait to get sued before filing a claim your insurer could deny the claim altogether .
2) When fault isn’t so clear. If you’re involved in a crash with another party that results in either property harm or injuries and fault is disputed in any way, you’ll need to file a claim so that your insurer can represent you. Insurance companies deal with insurance companies, and yours and the other party’s will need to figure out who will pay for what amongst themselves.
3) You hit a motionless object, your car is vandalized or bruised without you knowing who did it, or your car sustains weather-related harm and the costs for repairs of your vehicle or your medical expenses are greater than you can afford or want to pay. If you need $20,000 worth of medical attention, you’ve got to file a claim. Likewise, if harm from an uninsured driver, or you hitting a tree, causes significant harm to your vehicle (and you’ve got insurance covering these events ), file a claim.
If you’re going to file a car insurance claim, it’s best to do so as quickly as possible–at the scene of the wreck, if possible. You can find a list of what info you’ll need to file a claim here . Once your claim is filed, the insurance adjuster will take care of reviewing significant materials like the police report, witness accounts, and photos, and they will treat payouts to the other party (if applicable). If you’re the one who needs repairs, the insurance company will work with your repair shop.
And what can you expect from your claims process? J.D. Power surveyed customer satisfaction at top U.S. auto insurance companies— their results here . As for what you can expect from a payout: a two thousand sixteen report from the National Association of Insurance Commissioners found that the nationwide average car insurance payout was $841.23 in two thousand thirteen (the last year for which data is available), reports The Insurance Information Institute .
The Bottom Line
We think a safe rule of thumb is: When in doubt, involve your insurance company. One claim won’t always set you back either—some auto insurance companies suggest accident forgiveness, where the very first time you file for a claim, it has zero effect on your rates. But it’s also always good to keep in mind that the entire purpose of car insurance is to protect consumers from potential financial disaster—not a petite financial inconvenience.
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