When to file an auto insurance claim

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  • Auto insurance
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Unfortunately, car accidents happen every day, and when they do, the first thing most people think about is filing a car insurance claim. When to file a car insurance claim… if they should file a claim… how to file a claim. It can be a complex process, so it's essential to know when it's necessary to file an auto insurance claim, and when it might not be the best option. Never fear. VIU by HUB has put together this guide to help you make the right choice for you.

Key things to know about car insurance claims

Car insurance is designed to help you financially in the event of an accident or other covered loss. If you're involved in an accident, your insurance policy may cover the cost of repairing or replacing your vehicle as well as your medical bills, which can save you money. Some policies will even compensate other parties for damages or injuries. It’s an important, and often legally required protection for you, your passengers and other drivers and pedestrians.

That’s where a lot of people’s knowledge of the insurance claim process ends, and reasonably so! If you’ve never needed to file a claim, first of all pat yourself on the back for your great driving and good luck. Then read on for some intricacies that are typically only learned when you need to file a car insurance claim.

  • You may have a deductible to pay before insurance kicks in – You are responsible for any deductible, which is the amount you pay out of pocket before insurance covers the rest of the costs.
  • Filing a claim may affect your driving record and insurance rates – If you're found at fault for an accident, it could impact your driving record. Your insurance company may increase your premiums to reflect what they consider to be a greater risk.
  • Not all car problems are covered by insurance – Before filing a claim, it's essential to understand what types of damage or losses are covered by your policy. For example, maintenance issues are not considered a covered loss.

Should I file an auto insurance claim with my insurance or theirs?

Every state has different rules and even people who have always lived in the same state are often unsure of exactly how it works for them. We’ve written before about no-fault states and how fault impacts car insurance claims. One of the first things you need to know here is if you’re in a no-fault state. In those states, when you file an auto insurance claim, you’ll contact your car insurance company regardless of the circumstances of the accident. Here's a quick overview of some considerations for states without no fault laws:

  • If the other driver is at fault and has sufficient insurance coverage, you may be able to file a claim with their insurance company directly. This could be a faster and more straightforward process than going through your own insurance, but it's essential to make sure their policy covers all the damages.
  • If you're at fault, or if the other driver doesn't have enough insurance coverage, you may need to file a claim with your own insurance company. Your policy should cover the damages, up to your policy limits and after deductibles.
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Should I file a claim at all?

When to file a car insurance claim

Generally speaking, you should file a claim if you want to repair the damage and it will cost more to repair than your deductible. If you’re comfortable driving with a dent, you don’t have to fix it. Similarly, if your car is scratched and it costs $200 to fix and you have a $500 deductible, it’s under the threshold for what your insurance company will reimburse so you can save yourself some time and skip the claim.

That said, there are times when you should strongly consider filing a claim:

  • You're injured – If you're injured in an accident, it's essential to seek medical attention immediately. Your insurance policy may cover the cost of medical treatment, and filing a claim could help make sure that you get the compensation you need.
  • The other driver is at fault and doesn't have insurance – If the other driver is at fault and doesn't have insurance, you may need to file a claim with your own insurance company to cover the damages.
  • There's significant damage to your car – If your vehicle is severely damaged in an accident, it's usually a good idea to file a claim. Even if you're not injured, the cost of repairs could be substantial.

When not to file a car insurance claim

While filing a claim can lead to your insurance provider covering the costs of repairs or replacement, there are some situations where you may not need to file a claim:

  • You're involved in a minor accident and don’t care to repair the damage.
  • The cost of repairs is less than your deductible.
  • You're concerned about possible rate increases.

In these situations, it may be more cost-effective to pay for repairs out of pocket instead of filing a claim and risking an increase in your insurance rates. Before you decide to skip a claim, you should talk to an expert like a VIU by HUB Advisor to be certain that you aren’t missing any information that might impact your decision.

What to do when…

You are certainly free to make your own choices about when to file or not file, but here are some example situations you might find yourself in and thoughts on what you could do.

A tree falls on your car during a storm and damages your windshield

This type of damage is considered a comprehensive claim and is typically covered by insurance. If the repair cost is more than your deductible, it’s very likely covered and the risk of your rates increasing is low to none.

You hit a pothole and damage your tire

Check your policy for this one. Some insurance companies won’t cover it so you can save yourself the phone call. If your policy does cover this type of damage, it’s worth filing a claim if the repair cost is greater than your deductible.

Someone scratches your parked car

How bad is the scratch? If the damage is minimal, it may be more cost-effective to pay for repairs out of pocket. Look at advice specific to hit and run accidents for a better idea of how to file these types of claims if you’re interested in pursuing it.

Your car is stolen

If your car is stolen, you should file a police report and an auto insurance claim immediately.

You're involved in a minor accident and there's minimal damage.

If you're involved in a car accident or a  minor fender bender with minimal damage that will cost less than your deductible to repair, you may not need to file an auto insurance claim.

How long do I have to report an accident to insurance after it happens?

How long you have to report can vary depending on your insurance company and policy. Insurance companies don’t typically put a time limit on how long you have to file a claim, but if you wait too long and they’re unable to investigate or the repairs have already been made, there is a good chance that the claim could be denied. If you plan to file, do it as soon as you can. Check what your auto insurance policy says about when to file a car insurance claim if you want to wait but don’t want to miss your window to file.

Does filing a claim increase car insurance rates?

It’s possible that your insurance company may raise your rates after you file a claim. However, the extent to which your rates increase will depend on several factors, such as the severity of the accident, your driving record and your insurance company's policies. For example, if you have a history of accidents, your insurance rates may already be high and filing a claim may not have a significant impact.

Fault and insurance claims

Should I file an insurance claim if I am at fault?

If you are at fault for an accident, you should file an insurance claim. Even if the damages seem minor, it's important to report the accident to your insurance company. Failing to report an accident can result in your insurance company denying your claim or even canceling your policy. It’s also helpful for insurer to have a record of the accident in case the other driver decides to sue.

Should I file a claim if it was not my fault?

If you were involved in an accident that was not your fault, you will need to work with the other driver's insurance company. Their insurance company should cover the damages to your car, as well as any medical bills or lost wages you may have incurred as a result of the accident.

That said, many people prefer to file a report with their own insurance company. You’d still be responsible for the deductible, but your insurance company would be the one to pursue damages from the at-fault driver. Doing it this way saves time and allows you to deal with your own carrier, who has your best interests in mind.

Should I get an estimate before filing a claim?

Getting an estimate before filing a claim can be helpful in determining whether it's the best financial decision to file a claim. If the repair cost is less than your deductible, you may choose to skip the insurance claims process and paperwork. An estimate can even help you negotiate with your insurance company if you decide to file a claim. However, if you decide to get an estimate first, make sure that you don’t miss your deadline for filing a claim.

Pros of getting an estimate before filing a claim

There are several benefits to getting an estimate before filing a claim. These include:

  • Knowing the extent of the damage – With this information, you’ll be able to determine whether or not you consider the cost of repairs to be worth filing a claim. You’ll also be able to use that information to know how long you can go without repairing the damage. Some damage looks to be minor but is hiding something bigger.
  • Negotiating with your insurance company – If you have an estimate in hand, you may be able to negotiate with your insurance company for a higher payout. This is especially true if you believe their estimate is inaccurate or if you have a preferred repair shop that you want to use.
  • Avoiding surprises – Estimates give you an accurate idea of what repairs will cost. You’ll want to have this before you agree to an insurance payout. Let’s say your insurance company agrees to pay $1,000 for the repair but when you go to the shop, they want $1,500, you could be responsible for that extra $500. If you’d had an estimate before talking to your insurance company, you could have negotiated or planned ahead for that $500 bill.

Cons of getting an estimate before filing a claim

While there are several benefits to getting an estimate before filing a claim, there are also some potential drawbacks. These include:

  • Time and effort – You'll need to find an auto body shop or mechanic, schedule an appointment and take your vehicle in for an inspection. This can be time-consuming, especially if you're dealing with other aspects of the accident or damage.
  • Cost – Some auto body shops or mechanics may charge for estimates, especially if they're detailed or extensive. Your estimate may be covered by your insurance payout, but if you choose not to file a claim or do repairs, you would be responsible for that cost.
  • Potential for delays – Getting an estimate before filing a claim can also potentially delay the repair process. Depending on the severity of the damage, it may take time to get an estimate, or estimates, and schedule repairs. This can be frustrating if you need your vehicle repaired quickly.

To file or not to file is a personal choice. There is no right or wrong answer. It's important to consider the above factors when deciding to file an auto insurance claim or not and how to proceed with a claim and repairs. If you are unsure whether to file a claim, it's best to speak with your insurance company or the VIU by HUB Advisory Team to determine the best course of action for you.

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