You may be wondering, “Is it ever okay not to file an auto insurance claim after an accident?”
This is a very important question, and the short answer is: it depends. As with most things in life, there’s no definitive response, but a sliding scale that depends on several different factors. We’ll look at instances where you must file, along with scenarios where you may have an option to do otherwise.
When to file
First, let’s cover the easy absolutes. Always file a claim whenever anyone is injured in any way in an accident, whether the hurt party is a passenger in your vehicle, a driver or pedestrian in another vehicle, or a pedestrian. This should go without saying: it is required by law and dictated by conscience. You should also file if the fault of the accident is at all unclear, or if you sustain a significant or total loss.
Also file whenever you are required to report the accident to the insurer, who may require that you notify them of anything that might lead to a potential claim. This information will be in your policy documents, along with specific time limits to filing a claim.
When not to file
There are some instances where it may be appropriate to not file a claim:
If you can pay out-of-pocket for minor accidents. If the damage was minor, even if you were at fault, you can exchange information with the other party and offer to pay for the repair job yourself without involving the insurance companies.
Single car accident with less than $1,000 in overall damages. For example, backing into your garage or knocking over your mailbox (don’t laugh, it happens) — no one has been injured and only your property has been damaged.
If the other driver’s property damage is minimal. For example, if you tapped bumpers with another vehicle, and didn’t leave any marks, you may not need to involve insurance companies. In this situation, you’ll want to exchange information with the other party and ask if they will allow you to pay the repair bill yourself.
If you are at fault in a multi-car accident and there is less than $1,000 in damages. In this case, you must, by law, exchange insurance information, but if you think you will be able to pay the repair costs yourself, you could ask the other driver to not report the incident to his insurer. However, you may want to keep your options open, as repair costs can greatly exceed what you think they might be, and you may end up wanting to file a claim after all.
If you are not at fault in a multi-car accident and there is less than $1,000 in damages. In this case, you may consider not filing a claim because simply filing a claim can raise your insurance costs; however, you need to know that you can trust the other driver to pay for the repair of your car.
If the repair cost is near your deductible amount. Get a repair estimate, and if it is close to the amount of your deductible, it would likely make more sense to pay for the cost of repairs yourself.
Why you should consider filing a claim
Additional reasons to consider filing a claim include:
It helps pay for damages. If the damage is more than what you are willing or able to pay, your insurance company will cover the cost for repairs after your deductible has been met.
It helps pay for legal defense. Your insurance company will handle the expense of legally defending you in court if it is necessary. The reality is that you may be sued by the other party, regardless of whether you are responsible for the accident. This is another reason to report an accident to the police and the insurance company immediately: to protect yourself by getting the facts on record.
It helps pay for medical bills if anyone is injured. The extent of any injuries may not be immediately obvious and medical costs can be very expensive.
The fault of the accident may be unclear. In this case, the fault of a crash that results in injury or property damage is in dispute, so filing a claim will allow your insurance provider to represent you. Your company will work with the other insurance company to decide on responsibility and arrange payouts.
There is a total loss to the vehicle. Get an estimate immediately, and if the value of the damage exceeds your ability to cover the loss, you’ll want to file a claim. Be sure to add in the cost that an at-fault collision would raise your rates to over the next three years and factor that into the equation for a more complete picture.
Does filing a claim increase my premium?
Not necessarily. Most people believe that filing a claim will automatically increase their insurance rates; however, this is not always the case. Whether your insurance rates go up after an accident or not depends on your insurance company, the circumstances of the accident, and whether you have accident forgiveness, which is when insurers allow good drivers to get in one accident without their rates increasing. Other considerations include:
How bad was the accident? If the damage was heavy, it will lead to a greater payout by the insurance company, so it will lead to a greater rate increase.
Whose fault was it? If the accident was your fault, your rates can increase. Even if it wasn’t your fault, your insurance company may still increase your rate in some no-fault law states, but the increase may not be as much as if you were at fault.
Your DMV driving record. If you have few or no previous accident claims, it may reduce the amount of the rate increase.
Your relationship with your insurance company. Do they value you as a customer? How long have you been insured with them? Is your driving record good, or do you have previous claims on record? Depending on the answers to these questions, your insurer can decide to give you a larger or smaller rate increase.
If you’re looking for car insurance in Tampa, the experts at Affordable Car Insurance can help. No one wants their car insurance rates to increase as a result of a car accident, but there could be ramifications down the road if you decide to pay out of pocket for another driver’s auto repair costs to keep things “simpler.” Shop around for a new policy regularly for the best rates to make sure that you’re getting the best deals. Prices are competitive, so there’s always a good chance of finding something better than your current policy. With a little extra time and effort, you can have yourself complete peace of mind with minimal strain on your wallet!