Should you call your insurance company after a minor accident?
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Getting into a car accident can be scary, no matter how minor or major the damage is from it. Fortunately, your car insurance can help cover your financial responsibilities. But if the accident does not result in major damage or injuries, you might wonder, “Should I call my insurance company after a minor accident?” After all, filing a claim on your car insurance can sometimes result in higher car insurance rates, especially if you’ve been in an accident recently.
But when it comes to whether you should call your car insurance company after minor car accidents, the short answer is yes — it is always a good idea to let your insurance company know when you have been involved in a collision. However, you might choose to pay for the repairs out of pocket, depending on the circumstances.
When might someone consider paying out of pocket
Paying out of pocket for a car accident always comes with a certain level of risk. With that being said, using insurance may not always be required. Not using insurance to cover an accident means that your premium should not increase due to a claim, which is a major benefit. Here are some types of accidents where using your car insurance may not be necessary:
An inexpensive accident with just you or your car
If you get into a very minor collision that does not involve any other drivers, you can probably get away with paying for any damage out of pocket. An example would be driving into an object and getting a dent in your bumper or a crack in your windshield, but there is no other person injured or extensive damage caused. In this case, your insurance policy deductible might be higher than the cost of repairs, so filing a claim wouldn’t be financially beneficial.
Very minor accident with one other driver
The other situation where it might make sense to pay for accident damage out of pocket is if you get into a very minor collision with another driver. A classic example is getting rear-ended at a stop sign or brushing up against another car in a parking lot. Assuming the damage is minimal and both drivers agree on who was at fault, not using insurance could make sense.
However, insurance professionals generally only advise avoiding insurance in this situation if you can trust that the other driver will not file a claim without you knowing. If you feel any hesitation, it may be worth contacting your insurance company to avoid surprises down the line.
When you need to contact your insurance company
Car insurance is designed to protect your finances in the event of an accident, whether you cause a collision or get hit by another driver. While you might be able to get away with not contacting your insurance company after some accidents, more often than not, you will need to notify them. Here are some situations where you should contact your insurance company:
Someone was injured
If you or the other driver involved in a collision are injured, you need to contact your insurance company. The bodily injury liability portion of an insurance policy typically covers injuries to the other driver in an at-fault accident. Personal injury protection or medical payments coverage, if available on your policy, could also help cover injury-related costs for you or passengers in your vehicle. Medical bills after an accident can be expensive, even if the injuries are minor. Using your insurance could save you a lot of money that would otherwise come out of pocket.
You do not trust the other driver
If you get into an accident and you do not trust the other driver’s account of the incident, make sure to report the accident to your insurance company. An example of this would be if you and the other driver cannot agree on who caused the accident or if you suspect that the driver may fake an injury to get more money from your insurance company in the future.
The costs will be expensive
In the event that you get into an accident with major damage that will likely result in expensive repairs, let your insurance company know. Your property damage liability (PDL) should cover the other driver’s vehicle repairs if you are at fault, up to your coverage limit. Similarly, if you are involved in a collision where another driver is at fault, their PDL should kick in to cover your vehicle’s damages up to their coverage limit. If you are in an at-fault accident, the costs to repair your vehicle can be extensive without insurance coverage. Full coverage, which generally means comprehensive and collision coverage are also on your policy, can help cover repair costs to your vehicle in these scenarios.
Things to consider before paying for an accident out of pocket
If you decide to pay for an accident out of pocket, you should consider a few things first. Even if a collision is minor and there are no injuries, that does not automatically mean that avoiding insurance is the right move. Here are a few things to think about:
Make sure the damage estimate is correct
First, make sure that the estimated repair cost for any damages is accurate. Do not rely on a quick search to see what a certain repair might cost. Instead, go to a local body shop and have a mechanic give you a quote after examining the vehicle in person. The damage estimate may be significantly higher than expected. There could be internal damage that you can’t physically see, which might lead to more extensive costs. You’ll want this evaluation as soon as possible, to avoid any challenges with filing a claim should you decide to move forward with filing one.
Make sure you trust the other person
Before you decide to pay for an accident out of pocket, it is important to make sure you trust the other driver involved. You might both decide to cover the collision out of pocket, but there is no guarantee that the other driver will not file a claim later. If you have any doubts, it is a smart idea to contact your insurance company for peace of mind.
You might have accident forgiveness
Some drivers have accident forgiveness included in their car insurance policy. With accident forgiveness, your rate with your current insurance company may not increase after your first forgiven accident. If you have first accident forgiveness, you might decide to contact your insurance company and file a claim, as it should not have any impact on your premium.
If you get a new quote, you may have to disclose the accident
When you get a car insurance quote, you are typically asked to disclose any recent accidents or traffic violations you previously had. A pending or open claim with your current insurer could jeopardize your ability to get coverage with a new company until that claim is resolved. If you filed a claim, your accident might still impact your quotes with other companies because that accident was only forgiven by your current insurer. It may also prevent your eligibility to get accident forgiveness with another company for a few years.
Frequently asked questions
No, your insurance premium should not increase if you decide to pay for accident damages out of pocket. However, if the other driver decides to file a claim without you knowing, your insurance rate could increase.
Insurance companies typically learn your accident history by examining your driving record or tracking loss data, which includes the insurance claims you make and the paid claims. If you don’t file a claim for an accident and the police aren’t called to the scene, it’s unlikely that your insurance company will find out about the accident. However, if you file a claim for the damages or law enforcement is called to respond, your insurer will likely find out that you were involved in an accident.
As of 2019, the average cost of a property damage-only car accident was $4,600, according to the National Safety Council (NSC). However, the true cost of repairs will depend on the severity of the damage, the type of vehicle and where you live.
If your car insurance rate increases after an accident, you can take steps to lower it. The easiest way to lower your rate is often to shop around and get quotes to find out if you can lower your rate by switching to a different provider. It may also benefit you to consider raising your deductibles, which can, in turn, lower your premium. However, it’s important that you choose a deductible that you can afford to pay out of pocket, so make sure that the deductible you’re choosing makes sense with your budget. Your insurer may also offer discount opportunities, like a discount for taking a defensive driving class. Taking advantage of the discounts you qualify for can also help to lower your rate in many cases.
Correction, Feb. 10, 2023, 2:30 pm ET: The previous version of this article contained inaccurate references to how insurance does or does not offer coverage in a claims scenario, and also included inaccurate references to variables worth considering before using insurance to pay for a car insurance claim.