September 25, 2010

Knowing Whether To File An Auto Insurance Claim

With most auto insurance quotes, it is recommended that even the most minor fender benders should have an auto insurance claim filed with the insurance company for "further investigation." Sometimes it is best to use common sense when reporting inconsequential damage to an insured auto. Of course, if there is serious property damage or bodily injury, the incident should be reported unequivocally. Additionally, in the event of a natural disaster or theft the pendulum swings the other way, and more than likely, the incident should be reported. However, sometimes there are extenuating circumstances and conditions that require sagacious discernment and a serious consideration of the alternatives before reporting every minor incident.

For example, if an insured is accidentally backs into a mailbox and there is not any property damage to the mailbox, it is often best not to file an accident report. Another "what if" case scenario: a car involved in a fender bender where the only damage to the car is a small dent in the right fender; there was not another person or vehicle involved. It may not be in the best interest of the driver to report the incident to the insurance company. First, consider the deductible; if it will cost less to repair the car, it is not in anyone's best interest to report the incident to the insurance company. Furthermore, although the insurance company does not lose any money because the damage was less than the deductible, the incident will be on the insured's driving record typically for three years. This issue alone may not result in increased rates, but in combination with a moving violation or other incidents involving impropriety damage, or even a no fault accident, the insured's risk factor will be implicated. Basically, the driving record does not take into account the fact that it was a minor incident, but the fact that there was an incident.

However, in the event of a natural disaster such as hail, the incident should be reported immediately; the insured cannot be adjudicated in the imaginary court of right or wrong; the insured is not at fault. Unfortunately, if the insured failed to take normal and rational precautionary steps to protect the vehicle, there may be negative consequences. In the same respect, theoretically, a theft should be immediately reported, but again if the owner failed to secure the vehicle, especially in a high risk area the situation could conceivably backfire when the auto insurance claim is filed. Therefore, after receiving auto insurance quotes, use common sense in reporting minor incidents and accidents to insured vehicles, especially when damage is less than the deductible before filing an auto insurance claim.