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.
When Not to File an Insurance Claim
- After a minor single-car accident, when there’s little damage.
- After an accident with another driver resulting in no injuries and minimal property damage.
- If the cost to repair your car is less than your deductible.
- 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.
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