Should You File an Insurance Claim For That Body Shop Work?
Filing an Insurance Claim For That Body Shop Work
You don’t always have to file an insurance claim after an accident. Yes, in some situations, you’re legally required to file. In others, it’s not mandatory, but filing may be your most cost-effective course of action. And sometimes it’s better to pay for collision repair out of pocket because it will cost less—now or in the long run—if you don’t file an insurance claim to cover the body shop work.
In this article, we’ll discuss the legalities, the pros, the cons and the basic arithmetic of insurance claims (it’s easy stuff). First, let’s cover the situations in which you are legally required to file.
When are You Required to File?
Make sure you always report an accident to your insurance company when other drivers are involved. If you are at fault for the accident, you’ll likely need the insurance payout to handle all the costs. If you are not at fault, you may need your insurance agent’s expertise in navigating whatever claims result from the accident. In either case, your insurer should be brought into the loop.
Reasons You May Not Want to File
When an accident report is filed with the police or when you file an insurance claim, there’s a good chance it will drive up your insurance rates. Also, it’s logged into a database of vehicle histories, and the information will later be available to potential buyers, should you ever decide to sell your vehicle. An accident report will almost certainly have a negative effect on your car’s resale value, but if no injuries and no other vehicles are involved, you don’t have to report the accident in the first place. So, when should you file, and when should you pay out of pocket?
The first consideration is the cost of the collision repair compared to the amount of your deductible—the money you have to pay out of pocket in order for the insurer to cover the rest of the cost.
Let’s take an easy example: If your deductible is $500 but the repair bill is only $250, there’s obviously no reason to file a claim because it will cost you $250, either way, so why risk driving up your rates?
It can get a little more complicated. For example, if you have a $1,000 deductible, and the repair cost is $1,500, it may at first seem wise to make a claim, to save yourself $500 right now. But here’s the thing: if your insurance company raises your rates, so that your monthly premium goes higher—it will stay higher for three years. An accident can increase your rates by as much as 86 percent and add up to literally thousands of dollars out of your pocket over that three-year period.
Your insurance policy papers will tell you how much your deductible is (and if you don’t have it handy, you can ask your agent; there’s no penalty for making a phone call to them, and most agents will give you genuinely good advice on whether or not to file the claim without they, themselves, reporting anything to the insurance company), so the first step is to confirm the amount of your deductible.
Next, get a repair estimate so you can compare the amount to your deductible. If you’re considering paying the repair cost out of pocket, this will show you what you’re dealing with in terms of immediate payout. At this point, you may want to call your agent again and get an idea of how much your premiums may increase as a result of the accident. This will tell you how much the claim will cost you over the next three years, in addition to the initial out-of-pocket payment.
Of course, not everyone has the cash in hand to deal with the immediate repair costs, so that can complicate the situation, as well. If it’s not major collision repair—meaning that there is no engine or frame damage, APR can usually save you a lot of money compared to other shops when you bypass insurance, so be sure and get an estimate from us.
Liability Insurance Coverage
If you’re at fault for an accident, liability insurance pays for damages and injuries to the other party, but not for any damages to your vehicle. If you live anywhere but Virginia or New Hampshire, state law requires you to carry liability insurance. If you have an accident in which no one is injured and no other vehicles or property are damaged, you’ll definitely have to pay for the repairs to your vehicle, so there’s no reason to report it to your insurance company.
Save Time and Money
If paying for collision repair out of pocket is an option for you, you can save both time and money by handling it without an insurance claim. Not only could the repair process be cheaper than your deductible, but avoiding a claim can help maintain your car’s resale value and keep its accident history clean. At APR, we specialize in out-of-pocket repairs, and because we don’t spend as much time as a lot of shops wading through the red tape of insurance claims, our pricing is extremely affordable. Give us a call when you need help. We’ll help you make the best of a tough situation.