Submitting a Claim Vs. Paying for Damages Out of Pocket

There are times when it is not in your best financial interests to file an auto insurance claim. In fact, there are circumstances where filing a claim could result in losing your coverage completely, and that might make it difficult or more expensive to find a new policy. Filing a claim is your right under any circumstances, but doing so is not always a good idea.

If the damage is related to a single car accident, such as hitting a tree, and there are no injuries, whether or not you should file a claim depends on your deductible and your ability to pay for the damages out of pocket. If the cost of repairs is less than or slightly more than the deductible, it may be a good idea to simply pay for the repairs yourself. Filing a claim could result in a hike in your rates, which would add up to more than what you had to spend out of pocket over the course of the policy.

If you have a less than perfect driving record, that is, you have had an accident or speeding ticket in the last three years, filing an insurance claim may cause your insurance company to raise your rates or even cancel your policy. Keep in mind that accidents involving other vehicles or bodily injury to anyone should always be reported to the insurance company to protect yourself and the insurance company against possible litigation.

If you have already filed a claim and your premiums have gone up, it may be time to shop around for a new insurance policy and lower rates. Using an online car insurance quote service will let you tailor a policy specifically for your needs and then compare the rates between multiple insurers all from one location. There’s no guarantee that you will find lower rates, but you might be surprised at how much money you can actually save.

Posted in Car Insurance, Insurance.