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Should You File a Car Insurance Claim?

Read This Before You Make Your Claim Decision

Someone backs into your car in a parking lot. Or you trade paint with a too-close car. Maybe you bump into the rear of another vehicle on a rain-slick highway. Fender benders happen every day. You can’t always prevent these accidents from occurring, but you usually can control what happens next.
In some cases, you may opt to settle the damage of an accident without involving your insurance company. Maybe you are worried about a potential rate increase, or it is the other driver’s preference. Or maybe the cost of repairing the damage is less than the deductible. Before going that route, here are three factors to consider.

Legal and Contractual Requirements

The law is clear. In Washington, all accidents must be reported to the police if an injury or death occurs or the property damage exceeds $700. (In Idaho and Oregon, the property damage limit is $1,500.)

This can be handled at the scene if law enforcement is called or by filing a collision report up to four days later.

Insurance companies contractually require that you notify the company of any accident even if you’re not at fault. Usually you need to make this notification promptly although the time limit may vary.

There are some exceptions. For example, a single-car accident on your own property, such as knocking off a mirror while backing out of your garage, doesn’t need to be reported to the authorities.

If you fail to report an accident and you or the other person files a claim later, this may be grounds for the claim to be denied. The insurance company also may increase your rates or decide against renewing your policy in the future.

Realize that notifying your insurance company isn’t the same thing as filing a claim, the step of actually asking for reimbursement for the accident. By making the notification, you’re also getting a chance to get advice from your insurance agent.

Reasons to Settle

There’s a reason that parties sometimes settle without filing an insurance claim. One study found that insurance rates increased 41 percent for at-fault drivers who filed a claim for $2,000 or more. That can add hundreds of dollars to your insurance premium.

If you’re clearly at fault or you have had several at-fault accidents in the past, you may prefer to settle an accident without involving insurance companies.

In general, always file a claim with your insurance company if there has been an injury or the property damage is significant.

It’s important to note that people involved in an accident may feel fine initially, but injuries can become apparent within a couple of days. And what appears as just cosmetic damage to a vehicle may cost more to fix than it appears. Keep in mind that in Washington state, you have up to three years to start a claim from the date of the accident.

Stay Covered

If you do decide to work with the other party on a settlement without filing a claim, make sure that you keep yourself covered.

Meticulously document everything. Obtain accurate contact information with the other parties involved, including any potential witnesses. Get driver’s license numbers and license-plate numbers. Take notes on the accident, and take pictures of all the damage. Get a copy of the police report if one is filed.

When you are looking to repair the damage to your vehicle, get two or three estimates from a mechanic or body shop and share them with the other parties.

Keep track of all conversations in case the dispute ends up in court. Be wary if the other party stops returning your messages or wants to do the repair work themselves.

If you receive a payment, make sure that the check, even a certified one, clears before repairing your car.

If you make a payment to the other party, make sure that you get a legally binding document that releases you from liability. Make sure the document contains the settlement, terms for the deal — if either a lump sum or multiple payments — and signatures of everyone involved.

– Written by Jim Davis

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