Many people concerned with getting affordable auto insurance want to avoid making an auto insurance claim to keep rates down. Drivers may believe that it is better to cover the cost of a small accident out-of-pocket to avoid having the black mark on their record and triggering a hike in premiums that could cost more over the long haul. However, there are certain times when it may be OK to avoid an auto insurance claim, and other situations where doing so could prove very risky, but what determines your auto insurance?
When to File an Auto Insurance Claim
If you were involved in an accident with another person, or where there were passengers in your car, you should notify your insurance company. While this is most essential if someone was injured, it is also important to do even if there are no obvious injuries at the scene of the accident.
What appears to be a simple accident could turn into a claim for thousands, or even hundreds of thousands, if a person develops a less-obvious injury such as whiplash or soft tissue injury. These injuries may not be immediately obvious at the time of the accident, and you may believe that you’ll be able to get away with just writing a small check for property damages and keeping your insurer out of it.
However, if you do not contact the police and your insurer right away, it may jeopardize your ability to get coverage and liability protection if the incident becomes more serious down the line. Furthermore, you may not be able to get evidence of what happened if you wait, and your insurer may be able to legitimately claim you didn’t follow claims handling procedures and turn down your claim.
When Not to File an Auto Insurance Claim
If you hit a non-moving vehicle and there were no other parties involved in the accident, it may not make sense to file an auto insurance claim. This is especially true if the damage is under $1,000, or close to the amount of your deductible. It may make sense to pay these small costs out-of-pocket to avoid the risk of premiums increasing, especially if the amount your insurer would pay after deductible is only a few hundred dollars. Well these are the contents that may not be covered by an auto insurance. Likewise, if minor damage occurred to your vehicle from a natural disaster or vandalism, it may make sense for you to just pay for the repairs yourself.
Making the Decision
Ultimately, the most important determining factor in answering the question of whether or not to file an auto insurance claim comes down to the potential risk you will take on by not filing a claim. If your only risk is a small amount of money, the risk of rising premiums may be far greater and in the end the million dollar question is “what is auto insurance”?
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