Why, How, and When to File a Car Insurance Claim

After you’ve been involved in a car accident, it sometimes makes complete sense to file a claim with your insurance company. Other times, you might question what the right course of action is. That’s why we’ve put together the top answers based on decades of experience in the automotive world. If you’ve ever wondered whether you should file an insurance claim, you shouldn’t need to wonder after reading this.

While we are going to get more in depth about this later on, the basic answer is this: If you need to cover more damage than your insurance will increase after filing a claim, then file. Otherwise, our opinion is to avoid filing insurance claims at all costs, especially in most cases of small non-injury accidents. With that said, may insurance companies require you to at least notify them of accidents even if a claim is not filed.

Remember, if you need legal advice, consult an attorney. This article is not legal advice.

Now, let’s move right into your questions.

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Is There a Time Limit to File an Insurance Claim?

Car accident claims must be filed within a specified time period. Each state and insurance provider determines their own time frame. For example, you might have two years to file for personal injuries and three years to file for property damage. In other words, it doesn’t necessarily need to be done the second after the crash happens. This protects you if you agreed to let the other person pay you out of pocket, but they never did. Check with your state DMV and your insurance company to confirm.

How Much Does Car Insurance Go Up After a Claim?

This is the most important question to ask yourself. A few years ago, CBS did a study to find out what everyone wanted to know. Their results determined that filing a claim of over $2,000 could increase the premiums by up to 41 percent. If you were to make two claims in a year, you could expect the increase to go up to 93 percent! And that’s amid all those commercials saying your rates won’t go up.

What’s most critical is that the insurance company will continue to raise your rates for as many as three years following the claim. In most cases of small non-injury accidents, you will end up paying them the money back that they spent on your claim!

Will a Not-at-Fault Accident Affect Car Insurance?

Absolutely. Your car insurance company makes a living on predicting risk. To do this, they evaluate several things such as your credit, the car you are driving and how many accidents you’ve had. This determines the chance of accidents you’ll continue to have, in their minds. It’s been predicted that having a single not-at-fault accident can increase your rates by over $100 per year.

Nobody said this was a factual way to predict the future, but it’s what insurance companies do.

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Are You Required to File an Insurance Claim After an Accident?

There is no rule stating that you have to file an insurance claim following an accident, but as we discussed earlier, there are timeframes during which you must file a claim if you are going to.

If you choose not to get your vehicle’s damage fixed, you are supposed to report that to your insurance company. They need this information to determine the value of your vehicle and to avoid paying on pre-existing damage should you have another accident.

Most major companies require that you report accidents immediately, but not that you file a claim. Reporting the accident is different from filing a claim and it should be done right away. This leaves the door open for you to file a claim later if something arises you didn’t know about at the time, like an injury or damage you were not aware of.

Will Your Personal Policy Be Affected if the Accident Occurs in a Company Car?

If an accident report is filed, it will show up once the insurance company runs their Motor Vehicle Report. Typically, this occurs anytime you start a new policy or when your plan is up for renewal. The outcome here is highly situational and depends largely on the conditions of the accident. You will need to check with your personal insurance company to confirm, but chances are high that they will at very least be made aware of the accident during the process.

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Do You Need the Police for an Insurance Claim?

Filing a police report is a great way to ensure all the facts are recorded at the scene of an accident. If there is more than one car involved in the accident, there are injuries or it is unclear who is to blame, having an accident report could save you. If you were the only car involved in the accident, having a police report is unnecessary in most situations, but it could still serve to substantiate your story in the eyes of the insurance company.

What Happens if My Car Is Vandalized?

Having a comprehensive claim isn’t going to affect your rates in quite the same manner as a collision claim would. With that said, you still want the damage of your claim to be higher than your deductible before you file a claim. If the amounts are close, you need to weigh the notion that your policy dues might increase. Like we discussed earlier, you should still notify the company of new damages (and they might require that you do), but filing a claim is up to you.

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Signs You Should Not File an Insurance Claim

Now that you understand how the rates go up and your legal rights to file, let’s talk about some scenarios where you might avoid filing an insurance claim. These are our opinions – we are not attorneys and this article is not legal advice. If you need legal advice, talk with an attorney. Depending on the situation, your insurance company might require you to notify them of the accident but might not require you to file a claim.

1. Your vehicle is the only one damaged

If you are the only one involved in the accident and you have no injuries, there’s really no reason to file a claim. The collision will most likely be deemed your fault and you will pay a stiff penalty. Of course, if someone’s property was damaged like a building, pole, or sign, you need to address that accordingly.

Let’s say you back into your own mailbox after a long day at the office. The damage to your vehicle is $1,300. You have a $750 deductible. In that scenario, you are only going to receive $550 towards your repairs and then you will pay the price for the next three years. Is that worth it? Probably not.

2. Damage to other vehicles is minimal

If you touched bumpers with another vehicle because you weren’t paying attention, or if you had another form of minor non-injury accident, you might feel it’s best to handle the repairs privately. Exchange information with the other party and work something out to compensate them for damage – and keep a thorough record of all communications between you.

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Signs You Should File an Insurance Claim

There are reasons you should file an insurance claim. Consider these situations you might encounter. These are our opinions – we are not attorneys and this article is not legal advice. If you need legal advice, talk with an attorney. Depending on the situation, your insurance company might require you to notify them of the accident but might not require you to file a claim.

1. Injuries occurred

If you, your passengers or anyone else was injured in the accident, you must file an insurance claim. This is even more important if there’s a chance you were at fault. You don’t want to deal with the liability of medical bills or litigation without the layer of protection your insurance company provides you. If you get sued and you didn’t file a claim, you could be denied coverage and experience financial ruin.

2. Fault isn’t clear

If it isn’t immediately clear who was at fault, you will want to file a claim. This opens the door to representation from your provider. You don’t want to try to take on another insurance company on your own because they aren’t going to take you seriously. Let your company work for you and arrange your options.

3. There was a near total or total loss

If you lose more than you can cover, you will need to file a claim through your insurance company. Yes, your rates will go up, but you don’t have much of a choice if your entire Mercedes is crushed and you can’t afford to replace it out of pocket – or you don’t want to.

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4 Steps to Determine Whether You Should File an Insurance Claim

Here are the steps you want to take. They should help you determine the right path after an accident.

1. If the accident was serious or people were injured, file a claim. For minor damage and no injuries, get an estimate for repairs from a local mechanic.

2. Look into how high your rates would go up in your state if you are involved in an at-fault accident. Remember that this number will hit you for three years.

3. Compare the cost of repairs minus the deductible. If it is cheaper for you to file a claim, then go for it.

4. If you choose to file a claim, do so as soon as possible.

There might be times when you simply must file a claim. If you’ve suffered a total loss or there are injuries, don’t hesitate to take advantage of your insurance policy. We merely want to warn you against using your insurance to cover minor damage when you don’t need to.

Stay safe on the road.

The best way to ensure you don’t raise your insurance rates is to remain accident and incident-free. This not only protects you from rising insurance premiums, but it also keeps you safe. Just think of all the fun things you can do with the money you save on your car insurance every year.

Keep in mind that any reported accident is likely to appear on VIN Checks like the ones we offer at Dirt Legal. Feel free to use those services to check the history of your own car or one you intend to buy. We can also obtain new titles for cars, motorcycles, and almost anything with wheels. Click the links to learn more about our services.

We are not attorneys. This article is not legal advice. Cover image source