16 Mar When to File a Claim and When to Pay Out-of-Pocket

After an auto accident or other damage to your vehicle, you usually have the choice of filing a claim with your insurance company or paying to repair the damage out of pocket on your own. While the choice is yours, no matter what happened, there are some circumstances where one option is better than the other.

How can you determine which course of action is the right one? Here are some questions that you need to ask yourself before filing a claim.

Who Was Involved in the Accident?

If you were in an automobile accident with another vehicle, then you’ll want to file a claim, as well as get a police report. It’s up to your insurance company to determine who was at fault, and from there, see whose policy covers the repairs. Plus, if it’s found that you caused the accident, you could be held liable for any injuries to the other party. This isn’t something that you want to do out of pocket. It’s best to have the protection provided by your insurance company in place just in case things get expensive. After all, this is why you pay for insurance.

Was Your Car the Only One Damaged?

Single-car accidents happen all of the time. You might accidentally back your car into the garage door or a pole on a slippery, icy day. No matter the damage, you’re the one liable for the accident because you were behind the wheel, and your car was the only one involved.

Do you need to file a claim with your insurance for these types of accidents? The answer to that question is: it depends. If the damage was extremely minor and will cost less than your deductible to repair, then feel free to pay out of pocket. However, if your vehicle is heavily damaged, you should file a claim, pay your deductible, and be ready for the higher insurance premiums going forward, depending on your chosen insurer, of course.

Should You Alert Your Insurance Company if You Pay Out of Pocket?

This is another question where the answer is “it depends.” If you’re in an accident with another vehicle and choose to pay out of pocket, then you need to let your insurance company know what happened. This way they have a record should the other party come back at you for additional damages or injury claims.

On the other hand, if your car was the only one involved and the damage was extremely minor, you don’t necessarily need to contact your insurance company at all. You can, and they’ll make a note of a “zero payout” incident, which shouldn’t cause your insurance premiums to rise, unless you have a habit of these types of accidents.

With that said, if the damage is a little more extensive but still under your premium deductible, you do want to inform your insurance company. Once again, they’ll note this as a “zero payout” accident. The consequences here are if you don’t let your insurer know and the damage causes additional problems down the line, they may choose not to cover the later issues if they were not informed about the initial accident.

As you can see, there are definitely circumstances where paying out of pocket makes sense following an accident; however, more often that not, filing a claim or at least informing your insurance company about an incident is more beneficial.

Need helping deciding whether or not to file a claim? Contact our knowledgeable team at Spivey Insurance today.