If you're in a serious car accident, you'll need to tell your insurance company — and you'll want them to cover the cost of the mishap. Those bills will probably far exceed your deductible on the policy.
But there are times when you don't need to involve your car insurance company at all. In these cases, you can cover the cost yourself. Here are three situations when you might not need to file a claim.
1. The damage cost is close to your deductible
If you're in an accident with someone else, the liability portion of your insurance policy will cover any damage you cause to the other vehicles. The collision portion (if you have it) covers damage to your own car.
But you'll need to pay a deductible before the coverage kicks in on the collision portion. If the damage to your car costs less than your deductible or just slightly more, you should handle the repairs out of pocket. Filing a claim generally causes your insurance premium to increase.
However, before going the pay-it-yourself route, you should confirm whether the estimate of the damage is accurate.
Repairing the damage from even a minor fender bender can be pricier than many car owners expect. If you trust a local auto body shop, get a written repair estimate and discuss whether anything can cause the cost to increase.
If the final bill is high and you decide you want to file a claim, you might not be able to. Most insurance companies require policyholders to report accidents within a certain time frame. Check your policy for more information.
2. Only two drivers are involved in the accident
If you're in an accident with one other driver, you can both agree to not involve the insurance companies. You might do this if determining fault is easy to do, no one is injured and the damage appears to be minimal. But there are several reasons to be cautious about going this route.
For one, the other driver can change their mind and contact the insurance companies. This may happen if they start experiencing pain hours or days after the collision. The car damage could also be costly to fix, which is another reason to call the insurers. Even seemingly minor fender benders are notorious for being far pricier to fix than most drivers would expect.
3. You've filed claims for other accidents
Filing too many claims through your insurer can cause your rates to soar, possibly costing you hundreds if not thousands over the years following the claim.
The impact of making a claim varies by the state, the insurer and how long it's been since you submitted a claim, if at all. But the hikes can be hefty.
The upshot here? It's usually best to involve the insurance company unless you're positive the damage to your car is minimal or you were the only driver involved. You might also consider covering the repairs yourself if you've filed a lot of claims in the past.
ValuePenguin researched rates in multiple states for a 30-year-old man who drives a 2014 Toyota Corolla and files a claim with his insurer. We found his rates would increase by more than 30% after an accident that involved injuries and car repairs.
But the hike was only slightly less — under 25% — with accidents that involved only property or vehicle damage. So if his annual premium was $1,000 before the accident, it could increase to $1,230 after an accident that involves car repairs.