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Should I settle an auto accident without insurance?

The lowdown...
  • Car insurance makes it more affordable to pay for accident-related expenses in most cases
  • There are specific instances when you be better off settling car accident expenses without involving insurance
  • Car insurance premiums can increase because of even a single accident in some cases
If you are involved in a serious car accident, there may be no doubt in your mind about filing an auto insurance claim. This is because your insurance benefits may be necessary to pay for liability-related expenses, your vehicle repairs, medical bills, and other related expenses.

However, if you are involved in a minor accident, you may be thinking about settling the matter privately without filing a claim.

There are instances when it makes sense to settle a matter privately between the two drivers, but there are also risks associated with doing so in some cases. With a closer look at the options available to you when you are involved in an accident, you can better determine if you should file a claim with your provider for your most recent accident.

With a closer look at the options available to you when you are involved in an accident, you can better determine if you should file a claim with your provider for your most recent accident.

Read on to learn more about your options if you are in an auto accident and make sure to use our free insurance comparison tool above!

Understand Your Options If You Are Involved in a Car Accident

AdobeStock_84476023-1600x1600 (4)The two primary options available to you when you are involved in an accident are to file a claim or to pay for the expenses out of your own pocket. If the other party admits fault, he or she may agree to pay your own expenses for the accident.

On the other hand, if you are at fault, you may need to pay for the expenses for both parties out of your funds.

If you file a claim, you may still have some financial responsibility. For example, each time you file a claim, you may need to pay your insurance deductible. The typical deductible may be $500, but the range is often between $250 and $1,000 or more. Your insurance benefits may pay for the remainder of the expenses up to your coverage limits after you have paid the deductible.

– What to Expect From the Claims Process

The claims process sounds complicated and stressful, but most insurance companies have an excellent process that is streamlined for your convenience.

Claims can usually be filed with a phone call to the customer service department or through an online submission, and both options may only take a few minutes to complete.

You will need to make your vehicle available for the claims adjuster to inspect before the claim can be settled. As long as your policy includes relevant coverage, you should reasonably expect your claim to be settled properly. If it is not, you may need to pursue arbitration, reach out to your state’s insurance department, or work with a lawyer who specializes in this area of the law.

Learn What Could Happen to Your Insurance Rates

Filing a claim against your car insurance policy may be necessary in some cases and optional in others, depending on the extent of the damages and your own financial status at the time. If you choose to file a claim, your insurance premium could increase significantly in some cases. Insurance companies review your driving history thoroughly when determining your insurance rates.

There are other factors that affect the price of an auto insurance premium as well. These are a few other factors that affect the cost of your insurance:

  • The vehicle you drive
  • Your age and gender
  • Where you live
  • If you qualify for discounts
  • Your average mileage

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When It Makes Sense to Avoid Filing a Claim

If you are in a position where filing a claim may be optional, you should carefully analyze the situation to determine the best course of action. There are certain situations when it may be more beneficial to pay for the expenses on your own and to avoid filing a claim.

– When Your Vehicle Has a Low Replacement Value

AdobeStock_48049389-1600x1600If you file a claim, your insurance company will analyze its current market value in relation to the repair cost. If your vehicle is older and has many miles on it, there is a good chance that it has a relatively low replacement value. You can obtain repair quotes from several mechanics to determine the cost of repairs, and you can research market value online.

If your vehicle’s market value or replacement value is close to the cost of repairs, it may not make sense to file a claim. In fact, your insurance company may total the vehicle out, and you may be forced to purchase a new car as a result.

– When Your Repair Costs and Deductible Are Almost Equivalent

Your insurance deductible can also affect how beneficial it is to file a claim on your car insurance policy. Consider if you have a $1,000 deductible and your vehicle repairs are only $1,100.  However, if you file a claim, your premium may increase by more than $100.

Remember that an accident may remain on your driving record for several years. This means that it can cause you to pay a higher premium for years.

– When You Trust the Other Party to Pay for the Damages

AdobeStock_62082716-1600x1600There may also be instances when the other person causes an accident. He or she may not have insurance or may not want to file a claim for a variety of reasons.

While you may agree on the spot to not file a claim, you should still obtain the individual’s insurance information and file a police report. These steps will protect you in the event the other party decides not to pay for the damages after all.

– When You Could Lose Your Coverage

If you have several accidents or moving violations on your record currently, there is a good chance that your insurance company may cancel your coverage if you report another accident. When this happens, it can be difficult to find another provider who will issue a policy to you. Without coverage, you may not be able to drive legally. If you stand to lose your coverage, it may be best to avoid filing a claim if possible.

When this happens, it can be difficult to find another provider who will issue a policy to you. Without coverage, you may not be able to drive legally. If you stand to lose your coverage, it may be best to avoid filing a claim if possible.

One of the primary purposes of your coverage is to pay for your expenses if you are involved in an accident or if you have another type of loss event. However, there are instances when filing a claim can actually be detrimental. If you have been in an accident recently, carefully analyze these points so that you make the best decision for your unique circumstances.

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