If you find yourself involved in a minor car accident, you might think you should file a claim. After all, that’s what insurance is for, right? When a serious accident happens, it's a given that you should contact your insurer to deal with this.

However, what should you do after a minor car accident or fender bender? There are some situations in which paying for damages out of pocket may save money in the long run.

You should know that filing a claim can lead to higher insurance rates, even if your claim is denied. Worst-case scenario, if your history has multiple severe accidents and traffic violations, your policy could be denied renewal.

We've compiled the most important things you need to know about when to file a claim:

3 situations when you should pay out of pocket for a car accident

Deciding to file a claim or pay out of pocket isn't easy. You need to evaluate many factors like accident severity, injuries, your deductible and your claim history.

Paying for accident damages yourself may be a smart move if any of these situations apply to you:

1. You have recent accidents or tickets on your driving record

Insurance carriers use driving violations to justify raising premiums. This is especially true if you’ve filed claims recently. Premium increases can occur after a single claim.

At-fault accidents and traffic tickets affect your driving record and premium rates for an average of three years. If you file several claims or received several tickets within the last few years, your rates will be considerably higher than your accident-free counterpart. Drivers who have already filed a claim in the last three years should consider paying for accident costs themselves.

2.The only person involved in the accident is you

If your car was the only thing damaged in an accident, consider trying to avoid a claim. Take your car to a reputable collision repair shop and ask for an estimate. If the cost estimated by the repair shop is less than your car insurance policy deductible, you should probably pay for it yourself.

3. Damage to your car was minor

For minor or negligible accidents, like a dent or a broken tail light, consider paying out of pocket. In the event that your deductible cost is higher than the cost to repair your car, you'll not only pay more than necessary to fix your vehicle, but your premium may also increase.

4 scenarios where you should file an accident claim

We recommend filing a claim if your accident meets these criteria:

1. The damage to your car is severe and expensive

Is the cost of your claim substantially larger than your deductible? If it is, and you have collision coverage, you’ll want to file a claim.

For example, you have a $500 deductible and you cause an accident worth $3,000 in damages. You have two options:

  1. Spend over $3,000 out of pocket.
  2. File a claim and pay a $500 deductible. Your insurance premiums will likely rise. But if your driving history isn't bad, your higher rates won't likely cost you more than the $2,500 difference.

If you file a claim, be aware that causing another accident within three years may raise your rates even further.

2. Other drivers or people were involved in the accident

If your accident includes other vehicles or property, you should file a claim. The damage you cause may be more expensive than you realize. That can come back to hurt you. If you're involved in a fender bender, you have two options:

  • File a claim and let your insurance handle everything, from liability to injuries.
  • Pay for the damages yourself, but risk further complications like lawsuits.

As a post-accident precaution, you should exchange insurance information with the other driver, contact the police, notify your insurer and take photos of the damage. The photos and police report will be important documentation when the insurance companies ask for more details about the accident.

When you choose to pay for the damages yourself, you're at the mercy of the other person. They may inflate the repair costs or end up demanding more down the road. If you file a claim, your insurance company negotiates for you and protects your liability.

3. You or someone else got injured in the accident

If there's even the smallest chance you or someone else involved in the accident is injured, file a claim. In the event that an injury appears days after the accident or turns out to be worse than initially thought, you may have to fork over much more than you thought. You also risk having a lawsuit on your hands.

Filing a claim can be particularly helpful if you're not sure who's at fault for the accident. This can help insurers decide who is responsible for the damages. If you decide to pay out of pocket and keep the accident private, the other driver may come back and ask for higher compensation later. It's better to be safe than sorry.

4. Accident forgiveness is included in your insurance policy

Some insurance carriers offer accident forgiveness. It's a policy add-on that prevents your rates from rising after an at-fault accident. If your insurance plan includes accident forgiveness, you can file a claim without hurting your premium.

A few insurance companies already tack accident forgiveness onto their customers' policies when they sign up. Others charge extra to add accident forgiveness. Some insurers may require a certain amount of accident-free time behind the wheel to qualify. Check your insurance plan to see if you already have accident forgiveness and contact your provider to find out if you qualify for the add-on.

Will filing a claim increase my car insurance rate?

Your rate increase after filing an accident claim depends on your insurer, whether you’re at fault, the severity of your accident and your driving record.

According to QuoteWizard research, if you’re deemed to be not at fault for an accident, your premium rates increase by an average of 3%. However, if you are involved in an accident that resulted in $3,000 worth of bodily injury, your rates can increase by an average of 55%.

Type of accident or violation Average percent increase after an accident or speeding ticket
One not at-fault accident 3%
One speeding ticket 18%
One speeding ticket with $3,000 in property damage costs 44%
One accident with $3,000 in bodily injury costs 55%
Two accidents with $3,000 in bodily injury costs 81%
Two accidents with $3,000 in bodily injury costs each 95%
Note: Average rate increases are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

Which insurance companies increase rates the most after an accident?

Auto insurance company Premium increase after an accident
Allstate 38%
Progressive 38%
Farmers 32%
Liberty Mutual 23%
American Family 18%
Travelers 16%
State Farm 12%
Safeco 12%
Nationwide 10%
Note: Average rate increases are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

What do you need to know about fender benders?

What is a fender bender?

A fender bender is a minor car accident with little damage to either vehicle. The term refers to the fender, or the frame of the wheel well. It's now synonymous with a small accident that causes superficial damage. A fender bender can refer to more than just the fender. For example, denting a vehicle bumper qualifies as a fender bender.

What should you do after a minor accident or fender bender?

Most states and insurance companies have time constraints when dealing with car accidents. The statute of limitations for filing a lawsuit is typically between one year to 10 years. The time limit that you have for filing a claim will depend on your insurer and the severity of the accident. Most insurers do not outline a specific timeline but some will clearly detail the time limit in your policy document.

You might be tempted to call your insurance agent and ask for advice on filing a claim. They can use a surcharge schedule to estimate how much your premium will increase after a claim. But be warned: some insurance companies require agents to report when customers ask questions about filing a claim. As unfair as it seems, your insurance carrier can raise rates because of it.

If there is any doubt about how severe damages are or if someone is injured, file a claim. Facing an insurance rate increase is a pain, but it's substantially better than dealing with the legal issues that could arise from an accident.


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