Car Insurance Claims: When to File and When Not to. – Business Insider

Jump to

Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.
Your driving record is a key component that determines how much you pay for auto insurance. A bad one can really cost you. Premiums can increase by almost 50% after an at-fault accident claim, according to an analysis by The Zebra, an insurance comparison website.
Multiple accidents and severe traffic violations might even prompt an insurer to disqualify you from renewing your policy. Increased premiums from an accident usually stay on your record for three years after the claim, according to the Insurance Information Institute. 
In general, it’s better to report an accident to your insurance company than not to, especially if another party is involved. But there are some instances where not filing a claim makes more sense than filing one.
Some of the main factors to take into account when deciding whether or not to file a claim include whether property damage or bodily injuries are involved, what type of coverage you have, and even the relationship between the parties involved, explains Falen Cox, personal injury attorney at Cox, Rodman, and Middleton. 
Here are some scenarios under which you should almost always file an auto insurance claim:
File a claim if your car is badly damaged in a single-vehicle accident. Collision insurance will pay for your repairs, minus the deductible. If you don’t have collision coverage, you’ll have to pay for repairs out of pocket. 
Even if your vehicle is operational after an accident, it’s still important to at least report it to your insurance company even if you choose not to file a claim. A repair shop could fix cosmetic issues like a dented bumper or fender while missing hidden damage such as a bent frame that can cause problems later. You also have limited time to file a claim, so be sure to contact your insurer immediately after the accident.
If you damage someone else’s vehicle during a collision, and you’re at fault, you should always file a claim. 
At the scene of the accident, exchange information including names, addresses, phone numbers, insurance details, driver’s license, and license plate numbers.  Be sure to take pictures of all documents and report the accident to the police or highway patrol. Notify your insurer as soon as possible. 
Most states require liability coverage, which protects you from being sued and will cover at least part of the damage — bodily or physical — that was your fault. Even if the damage seems minor, not filing a claim and reporting an accident is risky.
“If anyone else involved in the accident sues you weeks or months later, not having reported the incident will make it harder for your insurer to gather evidence to represent you,” the Insurance Information Institute says on its website. 
“You should almost always file a claim if bodily injury is involved,” says Cox. If multiple people are involved in the accident, obtain each person’s ID and insurance information. Liability coverage will cover bodily injury if you are at fault.
Several states have time limits for filing injury claims, typically 30 days, according to Dan Ferrara, a licensed agent at Liberty Mutual Insurance. 
Some physical injuries may not be obvious at the scene of the accident. For instance, if you have a pre-existing condition, you might not realize that the accident exacerbated it until after you receive medical attention. If you haven’t filed a claim within your policy’s time frame, it’s possible you could have to pay for treatment out-of-pocket, according to Cox. 
Always file a claim after a major accident. If you are at fault for bodily injury, your liability coverage will probably cover the other party’s medical expenses. If you aren’t at fault, file a claim anyway, even if you don’t suffer immediate physical injuries.
While filing a claim for damage caused to others is always encouraged, there are instances where you might consider not filing a claim. Here are some of them:
If a minor accident only involves you and your car, a claim might not be necessary. For instance, say you back into your mailbox, which leaves a small dent on your vehicle’s bumper. You could opt not to file a claim, as risking increased premiums might not be worth it. 
If you don’t have collision coverage, you won’t be able to file a claim for personal property damage anyway. Also, note that minor, low-impact accidents can leave hidden damage on your vehicle. You might opt to have your car inspected to make sure you aren’t missing anything before deciding to forgo a claim.
If the repair cost is lower than your insurance policy’s deductible, it’s probably not worth filing a claim. For instance, if your deductible is $1,000 and there is no property damage, or the damage is less than the deductible, then consider paying for the damage outside of your insurance company. Also, suppose a claim is just a bit over your deductible. In that case, you may choose to foot the bill if you can afford it, says Ferrara.
You might forgo filing a claim if you hit another family member’s parked car, and the cost of the repair is less than the deductible. However, you should never make private settlements with a stranger instead of reporting an accident or making a claim, Cox warns. 
Some states require drivers to report accidents to the police. You should still also notify your insurance company of the accident. While your insurer will note the accident, you’re not required to file a claim, says Cox. 
As mentioned, you might choose not to file a claim if the accident was minor and only involved you and your vehicle, as your rates may increase. If you’re not at fault for an accident, you may choose not to file a claim as well. If the damage to your vehicle is minimal, you may want to pay for the repairs yourself. Even if you’re not at fault, filing a claim could still increase your premium, says Cox.
While filing a claim to cover damage to your vehicle is always an option, it may not be your best financial choice. Be sure to carefully read your auto insurance policy and understand the pros and cons of doing so depending on the circumstances.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they’re subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.