You should file an insurance claim when you can’t afford to pay cash for damages or medical bills that your insurance policy will cover. You should pay out of pocket instead of filing an insurance claim if the repairs or medical bills incurred in an accident that you cause will cost less than your deductible.
For example, it might be worth it to pay for a minor fender bender yourself, especially if the accident was your fault or you’ve filed a claim recently. Your claims history is important because the more claims you make, the more of a risk you are in the eyes of insurance providers. You could see higher premiums, or even have your canceled outright, as a result.
When to Consider Paying Out of Pocket
- You have comprehensive or collision insurance and there is only minor damage to your vehicle.
- Repairs cost less than your insurance policy deductible.
- You have recent claims or tickets on your driving record.
When You Should File an Insurance Claim
- There is major property damage that will cost more than your deductible to repair.
- There are injuries.
- The accident involves other vehicles.
- You have accident forgiveness on your insurance policy.
Keep in mind that if you’re in a car accident, you should notify your insurance provider of the incident whether you plan on filing a claim or paying out of pocket yourself. All major insurers require customers to report all accidents, no matter the size.
Also, if you’re in an accident that’s not your fault, you should file a claim with the at-fault driver’s insurance provider so that it pays its portion of any medical bills or property damage you incurred in the accident. How much the at-fault driver’s insurance provider will pay out depends on the driver’s policy limits and their state.
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