Is it ever OK to bypass your car insurance company after a wreck?
If you get into a fender-bender, you dent another car while parallel parking or you open your car door too wide and scratch the paint on another parked car, you might be tempted to handle the matter on your own.
But before you pull out your checkbook, experts say you should think about whether it’s in your best interest to bypass your car insurance company after a minor mishap.
When should you call your insurer?
Dinging a parked car is one thing, but experts say you should call your insurance company right away to report any accident, no matter how minor, involving people. First of all, your policy – which is a contract between you and the insurance company – probably requires you to let the insurer know about any accident within a specific timeframe, says Jeanne Salvatore, a spokeswoman for the nonprofit Insurance Information Institute.
Also, it’s smart to notify your insurance company, since another driver or passenger who didn’t seem hurt at the scene of the wreck might decide later to file an injury claim, says Michael Gardner, personal lines manager at Onecap Services LLC, an insurance brokerage in New York. “They might tell the cop they’re fine, then later say, ‘Oh, my neck hurts,’” he says.
Furthermore, the injured person might even decide to sue you, Salvatore says. If you notified your insurer about the crash in a timely manner, the company will have been able to investigate, get the facts on record and prepare to represent you, experts say.
In the end, reporting an accident benefits you. “You really want to protect yourself,” Salvatore says.
The gray area: Your agent can help
If you know the only damage done was to an empty parked car, that makes the question of whether to notify your insurer – or file a claim – a tougher one.
If you’re unsure about what to do, consult your agent if you have one, suggests Brian Rauber, a Farmers Insurance agent in Missouri. Your agent can help you look at your options, including paying out-of-pocket for damages, he says.
Experts say that when deciding whether to notify your insurer or file a claim, you might want to consider:
· If a deductible applies, and how much it is.
· How much the repair is likely to cost and whether it would strain your budget.
· How a report or claim would affect your record – and your premiums.
With many insurers, a claim under a certain dollar amount probably won’t cause a rate increase, Gardner says. For example, Farmers would not raise rates for a $200 or $300 claim, Rauber says. The threshold amount depends on the company, but a typical amount might be about $1,000, he says.
Also, companies usually look at the big picture, especially the number of claims you’ve filed. “A really small claim probably is not going to affect your rates if you’re not a habitual claim filer,” Gardner says.
But if you are a frequent filer, you might want to just pay out of pocket for a minor repair, Gardner says. “If you’ve had three claims in the past year, you might not want to put this one in, because your rates could skyrocket or your insurance company could drop you,” he says.
Handling a minor mishap on your own
One of the benefits of insurance is that you pay someone else to deal with the other driver, haggle with repair shops and handle other hassles. If you don’t want to involve your insurer, you’ll have to take steps to protect yourself, experts say. Here are some tips:
1. File a police report. “You should file a police report even if you have to go down to the police station yourself,” recommends Sonja Larkin-Thorne, a consumer representative for the National Association of Insurance Commissioners. “It’s just a backup in terms of having a report of the details.”
2. Document the damage. “Take photos of everything,” Gardner says. “If you’re going to leave a note with your name and number and say, ‘I dinged your car,’ it leaves the opportunity for the other person to be unscrupulous.” He adds: “What you don’t want is for the guy to take a key to his car because he wants a whole new paint job.”
3. Consider reporting the incident to your insurer. “Call the company and have a note put on your file,” Gardner says. “If the person you hit comes back and says, ‘It’s not $300 damage, it’s $3,000,’ at least there’s some paper trail, some documentation. It’s just being prudent.”
4. Look at repair estimates. Consider asking for two repair estimates and review them to make sure they seem reasonable, Larkin-Thorne recommends.
5. Consider paying the repair shop directly. “I always tell people to pay the body shop – that way you’re certain the work has been done,” Larkin-Thorne says.