Here’s Why You May Not Want to File an Auto Insurance Claim After a Minor Accident

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Do you always need to file a claim with your auto insurer when something happens to your car? Not necessarily. Read on to see why. 

The whole purpose of having auto insurance is to protect yourself in the event that your vehicle is damaged. An accident could, for example, result in $8,000 worth of damage to your car. If your auto insurance company picks up that entire tab minus a $500 deductible you have to pay, it could spare you from having to go into debt to the tune of $7,500.

But while there are plenty of situations where it pays to file a claim after a car accident, you may want to avoid doing that for an incident that was truly minor. Here’s why.

You may not get any money from your insurance company

You may be familiar with the concept of deductibles in the context of health insurance. If your health plan imposes one, you’ll need to spend a certain amount of money before your insurer picks up the tab for your healthcare services.

Auto insurance works similarly in that each time you file a claim against your insurance policy, you’re required to pay a deductible. Your insurer will then pick up the rest of the tab for your repairs, provided your claim is approved.

So, let’s say you have a $500 deductible and your car sustains $2,000 worth of damage. In that case, you’d spend $500, but your auto insurer would pay the remaining $1,500 for an approved claim.

In some cases, though, you may be looking at minor damage that costs less than your deductible, or costs the same. So in that case, there’s no sense in filing an auto insurance claim because you’re not going to get any money out of it.

For example, say another car sideswipes you and destroys your passenger-side mirror only. If the cost of replacing that mirror is $300 and you have a $500 car insurance deductible, it wouldn’t make sense to file a claim because you wouldn’t be getting any money in that scenario.

You don’t want your insurance costs to rise

Forbes Advisor found the average cost of car insurance is $2,150 for full coverage this year. That’s not a small amount of money.

The problem with filing a claim against your auto insurance is that it could result in higher premiums when your policy comes up for renewal. So if you’re looking at getting a very small payday from your insurer after meeting your deductible, then it may not make sense to file a claim after a minor accident.

Let’s say you got sideswiped by another driver and your passenger-side door got scratched up, but not dented. A body shop might quote you $550 to get it fixed. If you’re looking at a $500 deductible, it means that filing a claim won’t put more than $50 back in your pocket.

But what if you file a claim for that incident and get reimbursed your $50, only to then have your annual premium rise by $60 the following year? In that situation, you’re down $10.

Of course, this isn’t to say that filing a single claim will always and automatically result in a rise in your premium costs. But if you’re talking about getting very little money from your insurer, then you may want to consider not filing a claim.

Auto insurance is an unavoidable expense when you drive a vehicle. And while it’s important to have coverage, that doesn’t mean it always makes sense to file a claim against it.

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