If your car has become damaged in an accident, through vandalism or from another cause, filing a claim with your auto insurance company isn’t always the best course of action. For example, if your deductible is more than the cost of the damage, it’s a good idea to pay for the repairs yourself and not report the claim. Each time you do decide to file, even if the damage is less than your deductible, the report goes on your insurance record. Although small claims don’t affect your individual premium, insurance companies use information from policyholders to establish the overall premium rates they charge their entire customer base. The more accidents reported, the higher the premium rates the company charges.
Legally, you aren’t required to report an accident to your insurance company. The reason your company requests that you report every accident is so that it can protect itself against possible fraudulent claims. Documenting each accident helps an insurer spot a current claim for damages that really happened in an earlier accident.
If you already have a speeding ticket on your record, and your car is damaged at a later time, you have another reason to think twice about filing a claim with your insurer. That’s because in some states, if you file a claim for an at-fault accident and you have been previously ticketed, you may not be able to renew your auto insurance policy.
However, if there’s another car involved in the accident, or someone else in the car with you at the time, it’s important to report the accident. You never know if the passenger or other driver will file a claim on your insurance, and you should report the accident to make sure that your side of the story is documented with both the police and your insurer.
Another reason to report an auto accident involving another car or passengers is that injuries are not always immediately apparent. Your carrier should have a report on file in the event you, or someone else involved in the accident, sustain injuries that show up the next day and which require medical treatment.
While you should always consider carefully before you file an auto accident claim, you should never stockpile comprehensive claims. It may seem logical to file a number of small damage claims together; however, insurers watch for excessive repair estimates for comprehensive claims and your carrier may question the validity of the claim.
There is a growing trend toward nonrenewals and tighter restrictions on what is covered across the industry. Save your car insurance for expensive damage, and plan ahead so you can pay for the smaller repairs yourself.