When not to make a claim on car insurance?
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UPDATED: Mar 13, 2020
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- When there is only one party involved in the accident, it may make sense not to file a claim
- Your car can be damaged without being in a collision, and it may be more cost effective to repair the damages yourself
- The long term effects of a rate hike may outweigh the payout from a claim settlement
Car accidents are an unfortunate part of life. When you get caught up in an accident, you may feel shaken, your vehicle may be damaged, or worst case, you or someone involved may be injured.
In addition to all of this, insurance providers often hike rates after any accident, even if you have had a perfect record up to this point. It’s important to ask yourself, after every accident, “Should a claim be filed?”
How many parties were involved in the accident?
One big determining factor when it comes to filing a claim is taking into account how many parties were involved. Because there are many different types of car accidents, there may often be times where more than one person is involved in the accident.
Sometimes this other person or other people could be passengers in your vehicle, or the drivers and passengers of any other vehicles involved.
When there is more than one person involved in the accident, then it often makes more sense to file a claim.
If there is a possibility that you could be found at fault for the accident, it’s critical to protect yourself by speaking to your insurance provider. Filing a claim helps protect you if any legal situations arise during resolution.
When it comes to a single party accident, it may make more sense not to file a car insurance claim. A single party accident, for instance, may be something as simple as a rock chipping your windshield, or your car hitting a pothole and getting a flat tire.
A single party accident can also be as complex as a tree limb collapsing and landing on your car, or a deer running out into the road, completely tearing apart the front of your car.
However, in most situations, you need to assess the cost of the damage compared to the long-term costs of a premium rate hike. You’ll need to take into account any medical concerns that may come out of the accident.
If you’re sure there are no injuries, then it may be best to avoid filing that claim. Every situation may be different, but it’s often believed that smaller claims should not be filed.
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Was your car damaged without being in an accident?
Although car accidents are the primary cause of car insurance claims, there are other times your vehicle may be damaged. As mentioned before, your car could be parked, and a tree limb could fall and damage your car.
While your car was not involved in a direct accident, it was still damaged, and your insurance can help you repair your vehicle.
As before, the cost of the claim settlement compared to the cost of the rate hike need to be taken into consideration. Comprehensive coverage, which protects your car, usually doesn’t result in a rate hike like a collision coverage claim. No determination of fault is involved in most similar claims, as they are considered no-fault incidents.
Would the claim resolution be worth more than the rate hike?
Filing an insurance claim is a consistent way to get resolution when there is an auto accident or even just damages to your vehicle. However, there are times, as indicated before, where the rate hike may not be worth working with the insurance company on a resolution.
One example of this is when the insurance company may pay out less than the Kelly Blue Book value for your vehicle. The Kelly Blue Book is only used as a guideline.
The insurance company is not required to pay out what the vehicle was worth when you purchased it, only what it was worth at the moment before the crash.
Another example of this may be a fender bender with another driver. Although it has been suggested that a claim should be filed when other parties are involved, some accidents can be worked out without intervention from an insurance provider.
In instances like this, some drivers prefer to handle repairs without getting the insurance company involved, which helps to avoid any rate hikes that could occur.
Part of the problem with this scenario is getting the other parties concerned to agree to this resolution path and avoiding any issues along the way until the vehicles are repaired. Additionally, if there are physical injuries, this resolution path may not be viable.
The Best Path Forward
Any potential claim situation could lead to an easy resolution, or it could require intervention from your insurance provider. In any of these situations, contacting your local agent or broker may be the best path if you need advice.
They can provide general guidance without filing a claim, which can allow you to learn about time limits, potential claim disputes or policy coverage amounts.
Additionally, each state has different rules and guidelines regarding how claims are handled and who may be responsible. Be sure to contact your state’s insurance department or your local agent or broker with further questions.
Remember, rate hikes are a part of having car insurance and utilizing it. By taking into account the costs and benefits of the situation, you can determine the best course of action and hopefully avoid these unpleasant price increases in the future.
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