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When does it make sense not to file a claim after an accident?

Posted on Aug. 4, 2017

If you ever find yourself in a car accident of some kind and have no idea what the best course of action to pursue next is, don't worry; that's a totally reasonable reaction to have. Even something as straightforward as 'call the insurance company and file a claim' doesn't always occur to people immediately.

 

And if it doesn't (and you find yourself here instead), that could actually be a blessing in disguise.

 

Calling your insurance company is a sensible thing to do after an accident, and often the right thing as well. But in some cases, the call 'n' claim won't actually be the optimal move. In fact, it could actually be pretty detrimental to your finances and standing with your insurer under the wrong circumstances.

 

Lets take a look at when you shouldn't file a claim with your insurer. Keep in mind that some of these scenarios may overlap, and if they do, you should figure out which supersedes which and go with what allows you to secure the lesser of two evils.

 

When you shouldn't file a claim

 

If the repair cost is cheaper than/close to the deductible

 

This is sort of like two scenarios rolled up into one, but the principle is the same, so just go with it.

 

First is when the repairs you would be paying for the accident are outright cheaper than your deductible. This is a no-brainer; of course you go with the cheaper option!

 

Where it gets a little more complicated is when the repair costs aren't that much pricier than the deductible. In a vacuum you'd obviously still want to just choose whatever is cheapest, but that's not how insurance claims work. Every time you make a claim, you risk seeing the price for the monthly premiums you pay go up. These potential payments could offset whatever you'd stand to save by choosing the deductible.

 

Imagine you're in an accident where self-orchestrated repairs would cost you $2,000 while your insurance company would take care of it in exchange for a $1,000 deductible. If you could see your insurance going up more than $28 a month* as a result of the accident, then you should probably forego making a claim.

 

If you were the only driver/vehicle involved

 

The silver lining to getting in an accident where only you or your car is affected is that you don't have to deal with a third party. Whether you've accidentally backed into a street sign, messed up your mirror on a sharp turn, or anything of that nature, it's all your problem. All you have to worry about is your own well-being, and any repairs that may be necessary.

 

Now, just because you've gotten into a self-contained accident, it doesn't mean you should rule out making a claim without hesitation. The principle from the previous subsection still applies: follow the money. If it's really going to set you back a lot to clean up the mess yourself, then let your insurer jump in and help. Otherwise, keep it to yourself.

 

If your record is already badly blemished

 

When it comes to past offenders and their insurance premiums, things can escalate pretty quickly. Just one additional violation can send your rates skyrocketing.

 

Depending on what you did to cause the accident, it could could be in your best interests to pass on a claim if you've already got some past offences sitting on your record. Convictions generally stop being factored in three years after the fact, so that's the timeline you're working with.

 

If negligence led to the accident

 

In a situation where negligence on your part as a driver led directly to an accident occuring, you may want to keep that information from your insurance company. This could refer to a situation where you were knowingly driving with defective parts, drove in inclement conditions when your car wasn't equipped for it, etc.

 

Bear in mind that there are limits to this advice. In truly severe cases and for incidents where other parties are also involved, you'll probably have to involve your insurance company. Sometimes you just can't hide an accident without facing worse consequences.

 

If you have accident forgiveness

 

Accident forgiveness is a benefit some insurers offer that usually applies to your first accident or offence. It's basically a guarantee that you're rate won't go up for reporting and claiming damages for what you did. One could even equate it to a 'get out of jail free' card.

 

Except you are paying for it. To have accident forgiveness worked into your policy, you'll nearly always have to pay extra. For some, it's very worth it; for others, not so much. In any event, it's a nice safety net to fall back on for a first-time offender.

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