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When Not To File An Auto Insurance Claim

Suffering the drama of a car crash – even a very minor one – is a traumatic experience you’ll naturally want to put behind you as quickly as possible.

But you would be wise to take a moment to consider the position carefully before you make a knee-jerk reaction and immediately file a claim with your insurers.

Because, in the case of a minor fender-bender, such precipitous action could unwittingly cost you a king’s ransom further down the road.

Although it is the law that you share your insurance details with the other party in the case of an auto accident, there is no law that obliges you to tell your insurance company if you don’t intend to make a claim.

Remember also the purpose of auto insurance is to protect you against un-affordable costs that could cripple your financially – not to pay for every minor bump or scratch your vehicle sustains.

Of course, if there are injuries involved, then you must report the accident to your insurers. But, provided there are no injuries and only very minor damage to the vehicles, this is a time for a careful appraisal of the situation.

While a single minor claim is unlikely to affect your premium, you are only as good as your last car journey. So, if you were to have a minor accident followed by another one soon after, then that would certainly send your premiums through the roof, maybe by as much as 30-40%!   And that could be more that the cost of the repair.

On the other hand, a single claim might just leave your premiums unaltered.

Also take into account the amount you have set as your deductible, which you would have to pay anyway in the event of an insurance pay out.

Of course, if you’re the only party involved – for example, you backed into a wall, which was undamaged – then deciding what course to take is that much easier.

To a large extent, in the case of a two-car bump, it depends on the reaction of the other driver and, ironically, it will be far easier if you are the driver at fault. That’s because you can quickly take the heat out of the situation by instantly admitting your fault and immediately offering to pay for the repairs.

But, if the other driver is at fault, that’s clearly a trickier situation. But, if they are prepared to be reasonable about it and you really feel you can rely on them to take care of the repair costs without involving their insurers then it’s probably worth trusting them.

Remember, even when an accident is clearly not your fault, merely filing a claim can result in an increase in your premiums.

So, if everyone is calm and friendly, it might be possible to come to a private arrangement, whereby one or other of the parties – or both parties jointly – bear the costs without involving their insurers.

Always remember: the other driver will be just as keen as you to avoid inflating their insurance premiums. So focus on what is to their advantage by suggesting, as the damage is quite minor, they might like to consider preserving their insurance premium at its present level by dealing with the matter privately, just between the two of you.

If the other driver is agreeable to deal with the matter privately, then both parties must get a couple of repair estimates right away. Because, if the repair costs are far higher than you hoped, you’ll still have time to file an insurance claim.

If you are able to get an agreement with the other driver to avoid involving your insurers, it’s vital you obtain a written statement from them confirming none of their party has suffered any injury. This will avoid any injury claims surfacing later.

If there have been injuries, then you must certainly file a claim as medical expenses from a car accident can be notoriously open-ended.

In summary:

If you damage your car with no other vehicle involved and the damage costs $1,000 or less to fix, then you probably won’t want to involve your insurers.

If you are in a minor collision with another vehicle and it is clearly your fault, admitting this right away and paying for the damage to the other driver’s car could well be settled without involving either party’s insurers. Be sure to get a written statement confirming there were no injuries.

If a minor collision is the fault of the other driver and they readily admit it, you could persuade them not to involve either insurer to the benefit of both your insurance premiums. Be sure to get a written statement confirming there were no injuries.

If there are any injuries – regardless of the limited amount of vehicle damage – you must file a claim to protect you against possible sky-high medical costs.

You’ll find more useful tips like these in our regular free newsletter.

Published in Auto Insurance

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