Car Insurance Claims

It is worth it to file a car insurance claim if you were injured, the cost of the damage is more than you can afford to pay out of pocket, or another driver was at fault. On the other hand, it's probably not worth filing a claim for minor property damage, especially if the cost is close to your deductible. Since filing a car insurance claim may lead to a premium increase in the future, it's important to weigh the costs and benefits before deciding.

When It's Worth It to File a Car Insurance Claim

• The other driver was at fault and you're filing a claim with their insurance company.
• Your property was damaged and the cost of repairs is significantly higher than your deductible.
• You were injured in an accident.

It's important to note that filing a claim with the other driver's liability insurance will not cause your rates to increase. Additionally, it's usually a good idea to file an insurance claim if you're hurt. Even seemingly minor injuries may be more serious than they first appear, and medical bills can quickly add up.

On the other hand, if another driver was not responsible and your vehicle is only slightly damaged, it's probably best to pay out of pocket rather than risk a future rate increase. For instance, if you have a $200 comprehensive deductible and a deer caused $300 in damage to your car, filing a claim won't be very beneficial. But if the deer caused $1,200 in damage and you don't have a lot of savings, filing a claim is worth it for your specific situation.

To learn more, check out WalletHub's guide to car insurance claims.

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.

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.

Car insurance companies pay out claims by sending a check to the person who filed the claim or paying the mechanic directly. It typically takes about 30 days for an auto insurer to pay out a claim, but the exact timeframe can vary depending on the policyholder's state and the circumstances of the claim.

Most car insurance policies state a maximum amount that the insurer will pay for different types of claims. Once those limits are reached, you're responsible for covering the remaining expenses. In order to ensure that you get a fair settlement, make sure to document all expenses related to the claim, including medical bills and auto repair estimates.

To learn more, check out WalletHub's guide to car insurance claims.

Fault affects car insurance claims by determining which driver's insurance company will cover the damage. In most states, the at-fault driver's liability insurance will cover everyone else's medical bills and vehicle repairs, and the at-fault driver will have to use other types of insurance to pay for their own expenses. No-fault states are a notable exception to this rule, since they require each driver to cover their own medical expenses after an accident, regardless of fault.

How Fault Affects Car Insurance Claims 

• If you are at fault, you have to file a claim with your own insurer to cover your expenses.
• If you are not at fault, then you'll file a claim with the other driver's liability insurance, though you can use your own insurance as well.
• If you live in a no-fault state, you have to use your own insurance to cover your medical bills, regardless of who is responsible for the accident.
• Fault can be shared, which may limit damages.

When a car insurance claim is filed after an accident, an insurance adjuster will investigate and make a determination of fault. If the adjuster determines that multiple people are at fault for the wreck, then the claim will be affected by your state's negligence laws. For example, some states do not allow you to collect damages after an accident if you did anything to contribute to it. Other states allow you to collect reduced damages based on your share of fault.

To learn more, check out WalletHub's guide to car insurance claims.

To negotiate a settlement with an insurance claims adjuster:

1. Start by filing a claim and sending a completed proof-of-loss form to your insurer as soon as possible, if you haven't already done so.
2. Wait to receive the insurance adjuster's settlement offer (exact timeframes vary by state).
3. Make a counteroffer if you are not satisfied with the adjuster's offer.
4. Provide the adjuster with any evidence or documentation supporting your counteroffer.
5. Reach a final settlement and put it in writing.

The best way to make the negotiation process move smoothly is to document your property damage and medical expenses as much as possible. The more evidence you have, the better your chances are of having your claim settled. Generally, bodily injury claims are more complicated to settle than property damage claims.

You should also remember that insurance companies don't always operate with your best interests in mind. So, don't feel obligated to accept the first settlement offer that they make, especially if you know that you're entitled to more.

If negotiations are unsuccessful, you can consider hiring an attorney to help you through the process. But if you think the insurer is acting in bad faith, then you should report them to your state's regulator.

An insurance claims history report is a list of all the car insurance claims an individual has filed over the past 5-7 years. Most car insurance companies will check a driver's insurance claims history report before issuing a policy in order to assess their risk.

LexisNexis generates the most common claims history report from its “C.L.U.E.” database, which stands for Comprehensive Loss Underwriting Exchange. Since drivers might forget or misrepresent their claims, C.L.U.E. is a centralized source of information that insurance companies can rely on.

• Previous claims that insurers have paid
• Previous claims that insurers have denied
• The policy number and insurance company associated with each claim
• Information about specific vehicles
• Serious inquiries you have made to agents or adjusters
• Your name
• Your address
• Your date of birth
• Your SSN

Claims history reports may also include information about homeowner's insurance claims. You can request a free copy of your insurance claims history report once a year. For more information about getting a copy or disputing an error, check out WalletHub's complete guide to C.L.U.E. reports.

No, you do not have to file a claim after an accident. Most car insurance companies require you to report accidents as soon as possible, but reporting an accident does not automatically mean that you are going to file a claim.

If you're trying to decide whether or not to file a claim, it's important to know how long your state allows you to wait. Depending on your state, you may have 1-6 years to file a bodily injury claim or 1-10 years to file a property damage claim.

Even though you don't have to file a claim immediately after an accident, it's typically in your best interest to do so. The longer you wait to file a claim, the more difficult it will be to investigate, which lowers your chances of receiving a settlement.

To learn more, check out WalletHub's guide to car insurance claims.

Yes, you should file an insurance claim for bumper damage if the cost of repairs is significantly higher than your deductible or another driver was at fault. If the bumper damage is minor and you were responsible, you can pay for repairs out of pocket without filing a claim.

Why You Shouldn't Always File a Claim for Bumper Damage

Filing a bumper damage claim with your insurance company might not always be the best idea.

• Filing a claim will cause a premium increase of 12% to 45%, on average, depending on the type of claim, dollar amount, and insurance company.
• It might not be worth filing a claim if the cost of repairs is only slightly more than your deductible.
• You might not be able to file a claim at all if the cost of repairs is less than your deductible.

Types of Insurance That Cover Bumper Damage

You can use collision insurance to pay for bumper damage if it's the result of an accident you caused, or comprehensive coverage if the damage was caused by something out of your control.

If another driver was at fault in a crash that resulted in bumper damage, it's best to file a claim with their property damage liability coverage, which won't require you to pay a deductible.

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.

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.

You can make an insurance claim for damage you caused to your own car if you have collision and/or comprehensive coverage. If you have a liability-only car insurance policy, however, damage that you do to your own car won't be covered. Liability insurance only pays for the other driver's damages and injuries.

Unlike liability insurance, collision and comprehensive coverage are not required by law. But you were probably required to carry both if you leased or financed your car. Collision insurance covers damage to your car resulting from an accident, such as a collision with another vehicle, rolling or flipping your car, or hitting an object like a telephone pole or tree. Comprehensive coverage pays for damage caused by events outside your control, like vandalism or falling objects.

Both usually come with deductibles, which you'll have to pay before the insurance company covers the rest of the bill. Also, even if you have “full coverage,” insurance won't pay for your own negligence. If you didn't close your windows before it rained, for example, you're going to have to pay for it yourself.

Should I make an insurance claim or pay out of pocket?

It might make sense to skip filing a claim and pay out of pocket if you damaged your own car and no one was injured, especially if the damage is close to the cost of your deductible. If you make a claim, it will go on your insurance record and your rates will go up. Drivers who make a single claim of $2,000 or more can expect their premiums to increase by an average of 20% to 40% for three to five years.

Let's say you backed into your mailbox, causing $700 in damage, and you've got a $500 deductible. That means the insurance company is only going to pay $200 of the cost. It's probably in your best interest to pay the entire bill yourself since what you'll pay in higher premiums over the next three years will likely be more than the extra $200 out of your pocket now.

If you've filed other claims in the past three years, it's definitely worth checking the numbers before you file another for damage you've done to your own car. Multiple claims will result in significant premium increases—two in one year could nearly double your rate. You could even be dropped by your insurer, depending on your history and other relevant factors.

You may feel that you should always file a claim because that's what insurance is for, but insurance is really meant for major damage. Although nobody wants to pay for repairs out of pocket, a small claim is usually not worth filing.