When You Should and Shouldn’t File an Auto Insurance Claim

March 30, 2018


You pay for auto insurance so you think anytime there is damage, you should file an auto insurance claim. Luckily, most of the time it makes sense to go ahead and let your insurance company know what happened. Oftentimes the damages cost more than most people realize. However, there are a few times when you should just keep it to yourself and handle the situation on your own.

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When You Should Not File an Auto Insurance Claim

First, we’ll cover when you should not file an auto insurance claim because the list is small. Generally, you’ll want to let your insurance company know about the damages, especially when someone else is involved.

The exceptions to this rule are when your vehicle is the only one involved and there was no property damage.

If you accidentally hit a tree, pole, or even ran your car into a guardrail and really damaged hit, you may not want to tell your insurance company. There are a few reasons:

  • Your premium will increase quite a bit.
  • The damages are minor and cost less than your collision deductible.
  • You don’t have collision coverage.

Letting your insurance agent know about the accident automatically puts it on your insurance record. This could affect your premiums with this agent at renewal time. It could also put you at risk for cancellation or make it harder for you to get insurance with another company when you shop around.

If the damages cost less than your deductible, it doesn’t make sense to file a claim. Your insurance company isn’t going to cover it, but they are going to put it on your record. Worse yet, if you don’t pay for collision insurance (it’s not required by law), then you won’t have any coverage and you’ll still be marked ‘high risk.’

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Unless the damages to your car are so astronomical that they exceed your collision deductible by a large amount, keep the accident to yourself and handle the cost on your own.

When You Should File an Auto Insurance Claim

Now we get to the times that you should file an auto insurance claim. These times are plenty and sometimes even necessary to protect yourself from financial ruin.

You’ll want to file a claim when:

  • Any time you cause damage to someone else’s vehicle
  • Any time you cause damage to someone else’s property
  • Any time you cause damage to someone’s physical wellbeing

If there are any type of damages, you want the coverage of your insurance policy. You don’t know at the time of the accident the depth of the damages. This means both physically to a human as well as to a car or property.

Without proper insurance coverage, you could find yourself liable for thousands of dollars in damage. What if the person takes you to court to sue for the damages? Let’s say they ended up in the hospital for a few weeks and lost time at work and therefore income? Chances are they will take you to court to sue for those damages.

Your insurance will protect you in this type of instance. If you handle it on your own, you could end up filing bankruptcy and facing financial ruin.

This is especially important when someone you hit and caused damages to suggests that you handle it privately and in cash. You have no idea how much they will want or when the demands will end. When an insurance company handles it, there cannot be further demands for money. Everything is handled by the insurance company and with solid proof so that no funny business goes on during the process.

Deciding whether or not you should file an auto insurance claim is scary. You don’t want your premiums to increase or have a mark on your record, but you also need protection. Use the above guide as a way to give careful consideration on how to proceed. Anytime another vehicle or person is involved, though, it’s always best to have that third party help you through the process.

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