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What is an insurance claim and when should you file one?

A young woman sits in front of a laptop looking at her insurance papers.
Jamie Grill/Getty Images
A young woman sits in front of a laptop looking at her insurance papers.
Jamie Grill/Getty Images
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Although having a car accident can be scary, it’s reassuring to know that your insurance company should stand by you to help with the financial aspects of the collision. After all, this is why you stay current on premiums: so that you can contact your insurer after an accident and begin the process of getting a payout for damage or injuries. This process is called filing an insurance claim, and it is helpful to understand how the process works.

What is a car insurance claim?

An auto insurance claim is essentially your way of notifying your insurance provider that you’ll need to use your policy to cover expenses. The auto insurance claim process varies from provider to provider, but it usually starts with a phone call or filling out an online form.

It’s important to note that you should file a claim as soon as possible after your accident. You may even be able to do it while you’re still at the site of the accident. You should file a claim whenever something happens that your policy would cover. So, for example, if you have comprehensive coverage and your car was vandalized or stolen, you would file a claim for the related loss.

Really, when you’ll file an auto insurance claim depends on the types of coverage you have. So let’s look at some of the most common coverage types:

  • Liability coverage: This steps in when you cause an accident or do damage with your car. Most states require you to have bodily injury liability coverage if you hurt someone else and property damage liability coverage if you damage someone else’s car, fence, mailbox or other property while you’re behind the wheel.
  • Collision coverage: While your liability coverage can pay toward fixing someone else’s car if you’re at fault in an accident and their liability coverage can pay toward fixing yours if they’re responsible, you may still require insurance to step in with paying for repairing or replacing your vehicle regardless of fault. That’s where collision coverage steps in.
  • Comprehensive coverage: Usually, comprehensive covers damage or loss to your vehicle not caused by an accident, or damage that occurs when the car is not moving. This includes theft, vandalism or a fallen tree branch that smashes your windshield. Comprehensive also covers you for hitting a deer.

The more coverage you add to your policy, the more you’ll pay. But you’ll also be protected against more risks, which means your car insurance claim can pay for issues so you don’t have to.

When should I file a car insurance claim?

Generally, there are more cases when you should file an auto insurance claim rather than skip it. Here are a few key examples:

When you’ll save money

You should consider filing a car insurance claim whenever your out-of-pocket costs would extend past your deductible. Reminder: your deductible is the amount you’ll pay for certain auto insurance coverage types to kick in. For example, if you do serious damage to your car — say, you back into something large and do $1,500 of damage. If you have a $500 deductible, you’d really be receiving $1,000 for your auto insurance claim.

When you caused an accident or damage to someone else’ car or property

If your accident caused damage to anything other than your own car, it’s important to file a claim. If the damage is minor, it might seem like something you can work out with the other driver or property owner. However, it’s often safer to connect with your insurer and file a claim through the proper channels. Your insurance company has claim agents who can work with the agents of the other person’s company to ensure that the rights and responsibilities of each party are taken into consideration.

When someone hit your car

If someone else hits your car, no matter who’s at fault, you should begin the claims process as soon as possible. If possible, gather as much information from the other driver as possible, including information on their vehicle and their insurance policy info. Get the contact information of any witnesses who are willing to give it and take photo and video evidence of the damage if you can. Keeping an accident checklist in your glove compartment can help prompt you if you’re shaken up by the incident.

When people were injured in an accident

In an accident with injuries, it’s even more important to file a claim as soon as possible. Your insurance company will need to have a full picture of any medical costs involved in the accident so it can properly determine the payout amount it will provide. Even if it appears that no one is hurt in the immediate aftermath, those involved may later discover that they require medical attention, which can make skipping a claim risky.

Is there ever a time I shouldn’t file an insurance claim?

Even though it’s almost always a good idea to go through the insurance claim process for the financial and legal protection it provides, there are a few times you may consider skipping it:

When the damages are extremely minor

If you’re in a fender bender that leaves little damage to either car, you may not want to file a claim since it might increase your premium rate, no matter who is at fault. But be cautious here. If it’s truly a minor bump — say, you hit your brother’s car when backing out of your parents’ house and left a small dent in his bumper — you might be justified in skipping it. But generally, unless you can come to an agreement with the other person immediately, it may be beneficial to contact your insurer.

When you damaged your own car

Here you have a little more leeway. If you’re in a one-car accident that leaves your car with minor damage and you are able to get that damage fixed for less than your deductible, it may make more sense to pay for the damage yourself and pass on a potential premium-raising claim. However, if the damage is significant, you should consider contacting your insurer to get help paying for repairs.

How will an insurance claim impact my car insurance rates?

Even if you are not at fault in an accident, you may see your premium rise after you make an insurance claim. Why? Insurers are in the business of assessing risk and it’s possible that they may consider you a higher-risk driver once you are involved in an accident, regardless of the circumstances.

But this isn’t always the case. Many insurers offer accident forgiveness. What this means exactly varies from insurer to insurer, but in general, it means your rates won’t go up after your first at-fault accident. Some insurers charge extra for this option while others include it in the basic policy. It’s worth considering looking for an insurer with this option if you have a clean driving record to date.

Frequently asked questions

Written by
Kacie Goff
Personal Finance Contributor
Kacie Goff is a personal finance and insurance writer with over seven years of experience covering personal and commercial coverage options. She writes for Bankrate, The Simple Dollar, NextAdvisor, Varo Money, Coverage, Best Credit Cards and more. She's covered a broad range of policy types — including less-talked-about coverages like wrap insurance and E&O — and she specializes in auto, homeowners and life insurance.
Edited by
Insurance Editor