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UPDATED: Mar 13, 2020
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Many minor car accidents happen every day and its not uncommon to have two drivers who prefer to deal with the damage without filing a car insurance claim. Some drivers are afraid their car insurance rates will rise while others simply have other reasons for avoiding a car insurance company. Whatever the reason there are still ways car insurance companies can find out about car accidents even if you don’t report a claim!
Do Body Shops report damage?
Some do. When a vehicle is taken to a body repair shop some companies submit the damage to the Comprehensive Loss Underwriting Exchange (also known as CLUE) to verify whether or a not a file was claimed. The reasons for this vary but often vehicle repair centers want to see what other items they can repair and if you already fled a claim then they certainly will tell you more repairs are needed.
What happens when a car insurance company learns about an accident where you never filed a claim?
This all depends on your car insurance company. Obviously you had an accident and cannot deny that fact, so when a car insurance company finds out about an accident a couple things could happen. They could automatically rate you higher and you could see increased premiums on your next renewal date or you could be given a one-time waiver if you have accident forgiveness as part of your policy. Not all car insurance companies offer this and many times when you have an accident rates could possibly increase in the future regardless if you reported the accident or not.
If an injured party to the accident later files suit or claims for injuries and you never reported the accident however this could result in great personal liability as the car insurance company may even deny coverage altogether leaving you to deal with the consequences personally. It’s extremely important to weigh the advantages and disadvantages of filing a claim and realize that car insurance companies will provide coverage if you comply with the terms of the policy. Not reporting an accident is an open window for any car insurance company to turn on you.
Will my car insurance rates rise after a single car accident?
Not necessarily. Although any claim certainly puts you in a higher category of risk than drivers who have not filed a claim every car insurance company still evaluates risk differently. Minor fender benders can often result in little or no car insurance increase with one company while others may raise your rates substantially.
Your risk profile is not just limited to the amount of claims you file but anytime a claim is filed you do also open up the window for a manual review of your risk profile. If your credit sore has changed of if you had a speeding ticket since you first applied (among numerous other things) then it could simply be the excuse a car insurance company needed to re-assess your premiums.
Should I always file a car insurance claim?
The responsible answer is YES. In a perfect world no matter how minor the car accident you should always file a claim and have a record of the car accident on file but we do not live in a perfect world and sometimes an accident which is not even your fault can have financial consequences. The best thing to do when a car accident happens is to consult with your car insurance agent and have them explain to you the consequences of filing or not filing a claim. While a customer service rep at an 800 number may automatically file a claim try to speak with your local agent as often they can give advice without having to document anything.
Car accidents are never a good thing however filing a claim shouldn’t be as scary as many drivers think either. The auto insurance industry is based on risk and its still very hard to get dropped or incur some unaffordable increase in premiums due to a minor car accident.