Should I call my insurance company after a minor accident?

You should not file an auto insurance claim if only your own vehicle is damaged, there are no injuries, and the property damage is minimal. A claim might make it cheaper to pay for a single incident, but it will likely raise your future premiums, which could end up costing you more money in the long run.... read full answer

When Not to File an Insurance Claim

1. After a minor single-car accident, when there’s little damage.
2. After an accident with another driver resulting in no injuries and minimal property damage.
3. If the cost to repair your car is less than your deductible.
4. If the rise in your premium as a result of filing a claim will be more than your out-of-pocket costs.

A single at-fault claim raises premiums by about 40% on average. That means the average driver’s annual premium of about $1,500 would increase by approximately $600 after an accident, and it wouldn’t go down for three to five years. By comparison, the average collision claim is about $3,600.

Consequences of Not Reporting an Accident or Filing a Claim

Although it’s often the right decision to report accidents and/or file a claim, there’s no law that requires you to tell your insurance company. But insurers do require policyholders to immediately report accidents, and failing to do so can result in denied claims.

As a result, you should notify your insurer any time an accident involves another driver or results in any injuries. You should also contact your insurance company any time fault is unclear or if there is serious damage to a vehicle.

If you don’t plan to file a claim, remember that insurers keep close tabs on their interactions with customers through the CLUE database. Insurance companies often treat specific questions about coverage as claims with $0 payouts. Although it’s unlikely such a claim would affect your premium right away, regular inquiries could flag you as a frequent claimer.

It’s best to use insurance for its intended purpose—to protect against financially crippling situations. If you can pay out of pocket for a single-vehicle accident, it’s usually in your best interest to do so.

Filing a claim will increase car insurance premiums from 3% to 32% on average for three to five years in almost all cases. How much your rate goes up depends on several factors, like the claim type and amount, your insurance company, your claims history, your location, and whether or not you have accident forgiveness.... read full answer

The most significant factors affecting how much your rates go up after an accident are the claim type and amount. Accidents that you cause will raise your premium the most, especially if the damages are over $2,000. Although prices don’t jump as much when you’re not at fault or the incident was beyond your control, you’ll probably still see a rate increase.

It may seem unfair, but insurance companies are within their rights to raise your rates after a claim, even if the accident was not your fault. Insurers charge based on risk, and statistics show that you’re more likely to make additional claims if you’ve recently filed one.

Some insurance companies charge more than others after not-at-fault accidents, though. Progressive charges the most, raising rates by more than 16% on average. State Farm, on the other hand, doesn’t increase prices if their customer is not at fault.

You should file a claim with the other driver’s auto insurance company if you are not at fault for the accident and you have standard liability insurance but no collision coverage. Liability insurance pays for injuries and damage that a driver might cause to other people and property if at fault for a car accident. That means your liability insurance won’t be involved if you are not at fault. The other driver’s liability policy would cover the damage.... read full answer

But there are drawbacks to filing a claim with someone else’s insurance company. The other driver’s insurer will investigate your claim and confirm that its policyholder is at fault. And it’s typical for them to deny fault, especially if no police report was filed. If your claim is denied and you don’t have collision coverage, you’ll have to take the other driver’s insurance company to court, which could drag on for a while. Insurers know that the longer it takes and the more difficult it is to resolve a claim, the more likely it is that you will settle or drop it.

Things are a bit different if you have collision insurance, however. In that case, you can file a claim with either your auto insurance company or the other driver’s insurer. Filing with your insurer starts a process called subrogation. Your insurance company pays for your property damage and pursues compensation from the other driver’s insurance company after the fact. You may have to pay your collision deductible, but you could get that money back when your insurer settles with the other driver’s insurance company.

Collision insurance doesn’t cover your injuries, but if your insurance company is able to establish the other driver’s fault through subrogation, it might help get your medical bills paid by the other carrier. If the other driver was responsible for your property damage in an accident, they’re equally responsible for your injuries. Your insurance company will only pay for your injuries if you have medical payments coverage or personal injury protection.

If it turns out that the other driver doesn’t have insurance, you can make a claim through your uninsured motorist protection, if you have it. There is no deductible for uninsured motorist claims.