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When Not To File An Auto Insurance Claim
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How To File A Third Party Car Insurance Claim
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If other people were involved, it is always a good idea to report the accident to your insurance company. vm/Getty Images
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When Not To File A Car Insurance Claim
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Your driving record is a key component in determining how much you pay for your car insurance. One accident can really cost you, especially if there is significant damage to property and health. Premiums can increase by nearly 50% after an at-fault claim, according to analysis by The Zebra, an insurance comparison website. As you may know, many drivers agree to pay for the damages themselves in minor accidents, but this is not always possible.
Multiple accidents and serious traffic violations may even result in the insurer denying you further renewal. According to the Insurance Information Institute, increased accident premiums are typically seen three years after the claim. However, things like DUIs and reckless driving convictions can stick with you much longer. If you must obtain an SR-22, you may pay extra if the state requires it.
In general, it is better to report an accident to your insurance company than not, especially if it involves another party. However, there are times when not applying makes more sense.
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“Some of the main factors to consider when deciding whether or not to file a lawsuit include whether it’s property damage or personal injury, what type of coverage you have, and the relationship between the parties involved,” explains Falen Cox, personal injury attorney at Cox, Rodman and Middleton.
However, this should not be confused with filing a police report. Especially if you were not at fault or the damage was minor, filing a police report could protect you from false claims later. Here are some scenarios where you should almost always file a car insurance claim:
Make a claim if your car is seriously damaged in a single vehicle accident. Accident insurance will pay for repairs in most single-car accidents after deducting the deductible. If you don’t have collision coverage, you’ll have to pay for repairs out of pocket. If you were to run into a deer or other animal, comprehensive car insurance would kick in.
Even if your vehicle is running after an accident, small leaks or damage to certain engine parts can cause problems on the road. A repair shop can fix cosmetic problems, such as a dented bumper or fender, as well as interior problems. You also have a limited time to file a claim. Therefore, do not forget to contact your insurance company immediately after the accident.
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If you damage someone else’s vehicle in a serious collision and you are at fault, you should always file a claim. If someone else is at fault and offers to pay out of pocket, proceed with caution. Unfortunately, it’s easy to underestimate the cost of auto repair. You don’t want to get stuck trying to chase them down only to return them later.
Exchange information including names, addresses, phone numbers, insurance information, driver’s license and license plate number at the scene of the accident. Be sure to take photos of all the documents and report the accident to the police or highway patrol. Then notify your insurance company as soon as possible. In short, be sure to document to protect yourself later.
Most states require motor vehicle liability insurance to protect you from a lawsuit and cover at least some of the damage (bodily or physical) that you are at fault. Even if the damage seems small, not getting a police report is risky. Many experts recommend taking pictures even in times of misfortune.
“If someone else involved in the accident sues you weeks or months later, failure to report the incident will make it more difficult for your insurer to gather evidence to represent you,” according to the Insurance Information Institute’s website.
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If multiple people are involved in the accident, get ID and insurance information from each person. Liability coverage will cover bodily injury if you are at fault. Unfortunately, many injuries do not show up immediately. Injuries to the cervical spine and muscles can take days or even weeks to fully manifest.
Having an open claim and a police report to verify the accident helps drivers and passengers protect themselves from the “what ifs.” Pre-existing conditions can make this more likely to happen.
Several states have time limits for filing claims, usually 30 days, according to Dan Ferrara, a licensed insurance agent.
While it is always advisable to file a lawsuit for damages caused to others, there are times when you may want to consider not filing a lawsuit. Here are some of them:
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If a minor accident involves only you and your car, a claim may not be necessary. For example, say you’re back to your mailbox that left a small dent in your vehicle’s bumper. You may decide not to file a claim because it may not be worth the risk of increased premiums. For many drivers, the question is how much would it cost compared to your deductible?
The cause of the accident determines how your claim will be processed. Some accidents where you collide with a deer, street light or other similar object will be covered under your comprehensive car insurance policy, not collision. Any claim you make counts towards your total car insurance premium.
If the cost of the repair is less than your insurance policy’s deductible, it’s probably not worth filing a claim. For example, if your deductible is $1,000 and there is no property damage or the damage is less than the deductible, your rates will go up and stay high for at least three years. But you won’t get any refund.
Let’s also assume that the claim is only slightly higher than your deductible. You would receive a small compensation while paying significantly higher premiums for several years. In that case, you can choose to pay the bill if you can afford it, Ferrara says.
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You can decline to file a claim if you hit another family member’s parked car and the cost of repair is less than the deductible. At the time of the accident, you should still take pictures and document the damage. However, it is dangerous to leave things open with a stranger.
Unfortunately, unknown people later changed the story about who was at fault or later demanded repairs for unrelated damages or injuries. If you don’t have pictures and a police report, you have no way to combat this misinformation.
Some states require drivers to report accidents to the police. You should still report the accident to your insurance company. While your insurer records the accident, you’re not obligated to file a claim, Cox says.
As mentioned earlier, you may 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 are not at fault in the accident, you can also choose not to file a claim. If the damage to your vehicle is minimal, the at-fault party may be motivated to pay you directly. “Even if you’re not at fault, filing a claim can still increase your premiums,” says Cox.
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While filing a claim to cover the damage to your vehicle is always an option, it may not be your best financial option. If you decide to apply, go directly through the other driver’s insurance as much as possible.
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