When to File an Auto Insurance Claim – and When Not to

After the embarrassment of causing a minor accident comes the fear of a possible rise in auto insurance rates. Even if you have plentiful auto insurance coverage, you might be tempted to keep your insurance company a secret and pay for repairs out of pocket.


It might make sense if your car was the only one involved – you backed up into a pole, for example. But causing car damage or injury to others means you could have to pay thousands of dollars. Here’s how to determine when to notify your insurer of an accident.

Tell your auto insurance company?

You breach someone’s car and they suggest fixing it in private with money

Yes. Don’t make a private deal, in case they ask for more money later. Suggest that the person make a claim and notify your insurer of the accident.

You are causing serious harm to another person

Yes, inform your insurer of the accident. There could be more costly damage than you think.

You cause a car crash with injuries

Yes, tell your insurer. Injuries can easily lead to big medical bills.

You accidentally cause small damage to your own car, such as backing up into a pole

Don’t bother to contact your insurer if you don’t have collision coverage or if the damage is less than your collision deductible. There would be no claim payment in this case.

You accidentally cause a lot of damage to your own car

Contact your insurer if you wish to make a claim for collision coverage. Evaluate the possibility that your rates will increase upon renewal due to the claim. If you don’t have collision coverage, there is no reason to contact your insurer.

Notify your insurer when other drivers are involved

Suppose you make a stupid driving move and breach someone else’s car. Settling the accident with the other driver, without the help of your insurer, is risky. After all, you don’t really know who you’re dealing with. What if you paid for the repairs and months later he came back asking for more?

Your liability insurance is there to protect you from legal action, and your insurance company is experienced in dealing with parties involved in an accident, no matter how angry they are. Liability coverage covers damage and injury you cause to others, and it pays for your legal defense costs if you are sued as a result of an accident.

To prepare for a possible claim against you, provide the other driver with your insurance information, call the police, and report the incident to your insurance company. It’s also a good idea to take photos of the damage to both cars before you part with the other driver. Depending on the jurisdiction, the police may not be at the scene of the accident if no one is injured and the damage is minor. In this case, file a report at the police station. A police report provides important documents and the insurance company will ask you for a copy if you file an auto insurance claim.

Inform your insurer in the event of serious damage or injury to the car

Damage from others: Even if the other driver is honest and the crash was just a wing bend, the damage could be more serious than it looks. In 2015, the average property damage liability claim was $ 3,593, according to ISO, a data analytics provider.

Injury to others: Likewise, it can be difficult to tell if there are injuries at the scene of an accident. Some injuries, like whiplash, have delayed symptoms that may not appear right away. You certainly don’t want to be held responsible for paying someone else’s medical bills. Let your insurer take care of it. The average liability claim for injury was $ 17,024 in 2015, according to ISO.

Damage to your own car: Your car could have hidden damage. Your collision insurance will pay for the repairs, less your deductible. The ISO reports that the average collision claim was $ 3,350 in 2015. Your policy likely requires you to notify the insurance company within a reasonable time after the accident. Waiting too long could jeopardize the payment of a claim.

When it is not necessary to file an automobile insurance claim

When the accident only involved you and your car

  • If you’ve only purchased liability insurance and you haven’t purchased collision insurance, your policy won’t cover damage to your car anyway.

  • If you have collision insurance, it will pay for the damage to your car. But let’s say you backed up into a concrete post, denting the bumper – you might consider paying for the repairs yourself or just leaving the dent rather than filing a claim on your collision insurance. Get a quick repair estimate. If the repair costs less than your deductible, there is no need to file a claim. The deductible is the amount you pay out of pocket for a repair.

If a complaint can increase your rates

If the cost of repairing your car is more than your collision deductible, you’ll need to determine whether paying for the insurance is worth the risk of a rate hike later. Whether your insurance rates go up after a claim depends on your claims history, the rules of your insurance company, and even your state, which may regulate the circumstances under which insurers can add a surcharge to your rate. Surcharges – industry jargon for premium increases – typically last three to five years and may gradually decline over that time.

The only way to find out how much your insurance company will increase in rates is to ask their surcharge schedule or speak to your agent. Remember, however, that your insurance company will take note of the investigation.

“Auto insurers closely monitor their interactions with customers, so the demand will be recorded in their system,” said Michael Barry, spokesperson for the Industry Group Insurance Information Institute. “It is unlikely, however, that an auto insurer would increase a policyholder’s rate due to a single investigation that did not result in a claim being filed.”

Whether or not your rates go up after filing an auto insurance claim, it’s always a good idea to compare auto insurance quotes when renewing the policy to make sure you’re getting the best price. Nerdwallet auto insurance comparison tool can help.

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