Not only car insurance policies and their terms and conditions can be confusing, but making an insurance claim or skipping it can be a difficult decision to make as well. If you think that in any car accident, claiming auto insurance is the right thing to do, then this article is for you. Sometimes saving a few hundred dollars can result in you losing thousands of dollars in the long run. While there’s no doubt auto insurance policies should be used to prevent paying for car repairs from your own pockets, there are some cases when you should skip filing for a car insurance claim.
So let’s say that you get in a minor accident, or perhaps a little serious one that results in your car’s bumper getting damaged. Should you file a car insurance claim and get the insurance company to pay for the repairs, or should you pay for the damages yourself? Let’s take a look at the long but detailed answer.
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Should You File a Car Insurance Claim for Bumper Damage?
Insurance Policies to Claim:
Depending on the type of accident and the person at-fault, there are different auto insurance policies you can claim. These policies are liability insurance, collision damage waiver, and uninsured motorist protection plan. Let’s get into the details.
Liability Insurance:
If you get in a car accident that results in the bumper damage of your car, and the accident was the other driver’s fault. Then you should claim the at-fault driver’s liability insurance policy to pay for the cost of repairs, and injuries (if any).
When you claim someone else’s liability insurance, your insurance rates do not hike. But this can only be done if the accident was the other driver’s fault. So if you are not at fault, claim the at-fault driver’s liability insurance even if the cost of repairs is minimal.
Collision Damage Waiver:
Collision insurance is the most important optional auto insurance policy you can get. This policy is claimed when the accident is your fault and it covers the cost of car repairs needed after the accident.
So if you get in a car accident, you can claim your collision damage waiver to pay for the cost of bumper repair. Here’s something you might not know; you can also claim collision insurance even if the accident was not your fault.
If for some reason the driver at-fault does not have liability insurance, you can claim your collision insurance to pay for the repairs. There are some issues with this which we’ll discuss later in the article.
Uninsured Motorist Plan:
Depending on the state you live in, uninsured/underinsured motorist insurance could either be optional or mandatory. This policy is exclusively for cases when the driver at-fault is either uninsured or underinsured. With over 32 million uninsured drivers in the US, this policy is very crucial to have.
There are two elements in uninsured motorist protection plans; one for bodily injury that pays for the medical treatments while the other is for property damage for the car repair costs.
Now that you know what policies can be claimed for bumper damage, let us look at all the reasons when and why you should not claim some policies and how they can help you save thousands of dollars in the long run.
Why Not Claim Insurance Policies?
While it may sound counterintuitive, not claiming your auto insurance policies for things like bumper damage makes a lot of sense in some cases. Not only making a claim is a complicated process, but there are also some major repercussions involved as well.
Firstly, you will need to pay the deductible amount before you get the claim amount. A deductible is an amount you need to pay before the insurance company pays the rest of the claim amount. You can set the deductible amount, and it usually ranges from $100 to $1000.
Here’s the catch; If the total cost of repairs is under the deductible amount, you cannot make an insurance claim. Let’s say the cost of repairs is around $1,300 and your deductible is $1,000. Then you’ll have to pay $1,000 and the insurance company will pay $300 only.
Here’s why sometimes you should avoid claiming auto insurance for minor accidents and damages such as bumper damage. If the cost of repairs is slightly above the deductible amount, it is better to entirely pay from your pocket.
As mentioned above in the example, just for $200 or $300, making an insurance claim would result in increased auto insurance rates for at least three to five years.
If the expenses are higher (say deductible is $500 and the total cost of repair is $1,500), then making an insurance claim is the right thing to do. But if the out-of-pocket cost is not too much, it is better to avoid filing claims for bumper damage.
Car insurance is already getting very expensive. Take a look at Indiana. It is very difficult to search for car insurance quotes in Indiana and get great policies at affordable prices. The added requirement of getting uninsured motorist coverage with a liability policy adds to the cost as well.
Losing No-Claim Bonus:
When a policyholder does not make any insurance claims during the policy period, they are given a no-claim bonus. This is usually a 4%-5% discount on the policy renewal price and with each subsequent year or no policy claims, the discount increases.
Some people can get as much as 25% to 30% off on the insurance policy renewal price if they have not made any claims for multiple consecutive years. So you need to keep in mind that making an insurance claim would also make you lose no-claim bonuses.
Consider all these factors; the hassle of making an insurance claim, going through the investigative process, then paying the deductible, getting your insurance rates hiked up because of the minor accident, and losing no-claim bonuses for bumper damage. Is it worth it?
Conclusion
After doing some research, it seems that filing a car insurance claim for bumper damage is not worth it. The repairs are usually not that expensive, and they will likely raise your rates. If you have a high deductible, it might not even be worth it to file a claim. Filing a claim could also lead to an increase in premiums. Ultimately, the decision of whether or not to file a claim for bumper damage is up to you. You will need to weigh the cost of repairs, your deductible, and your insurance rates to make the best decision for your situation.
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