Motorists who are involved in an automobile accident often have questions about whether or not they should file a claim with their automobile insurance company and when they should file the claim. If you have been involved in an accident, you may not want to put in a claim because you think that your insurance rates will go up. However, even if filing a claim causes your rates to go up, not filing a claim can have undesirable consequences.

Understanding Insurance Policy Language

If you've been in an accident, it's critical that you know what your insurance policy requires you to do, because it could make it easier for you to decide whether or not to file a claim. The policy might require you to file a claim. For example, most car insurance policies make very clearly that you must notify your insurance company of any "occurrence" or "event," like an accident, that might lead to a claim being made under your policy. In other words, if there's any possibility that you or someone else could ask for payment from the insurance company, you have to notify the insurance company.

Also, many insurance companies require you to notify them in a specific manner, which is stated in the insurance policy or as required by state law. For example, your policy may require you to provide written notice of the accident on a particular claim form. Time limits for giving such notice to the insurer vary from policy to policy, depending on the kind of risk covered by the policy.

What happens if you don't file a claim? The worst case scenario is that the insurance company cancels your policy because you didn't do what the policy required. Remember, an insurance policy is a contract, and if you don't do what you agreed to do, then you've violated or "breached" the contract, which could allow the insurance company to cancel your policy.

The insurer could refuse to provide you with coverage if something does in fact come up that you weren't expecting. For example, let's say you were in accident with another car. Both cars appear to have very little damage, maybe a small dent in a bumper or a little scratched paint. Also, neither you nor the other driver feels any pain. So, you and the other driver agree to pay each other's damages and you don't file a claim.

Now, lets say that a few weeks later, the other driver calls you and says that he has thousands of dollars in damage and he's having neck and back pain. Or, you have more serious car damage or you start having pains. Because you didn't file a claim, your insurance company could refuse to pay the other driver's damages (and yours, too), leaving you to pay for it all out of your pocket.

What if the other driver files a claim with his or her insurance company? That insurer would pay his or her claim, and then come after you to recover what it paid. If you filed a claim, your insurance company would repay the other insurer; if you didn't file a claim, again, you could have to repay the other insurer out of your pocket.

In such scenarios, you might be able to file a claim with your insurance company as soon as you realize that the other driver is looking for more than what you originally agreed to. You need to do so as soon as possible, though. And, if you do, and the insurance company denies coverage because of your failure to file a claim sooner, it would be a good idea to contact an attorney to discuss your options, such as filing a lawsuit against your insurer.

Gathering Information and Reporting the Accident

If you are involved in an automobile accident, there are certain steps you should take at the scene of the accident. One of the steps is exchanging information with the driver of the other vehicle involved in the accident. This information includes the driver's name, address, telephone number and the name of his or her automobile insurance company.

After the accident is over and you have returned home, one of the first things that you should do is to call your insurance agent and report the accident. While you don't have to file a claim just then, your agent can provide information to you about the claims process and answer any questions that you may have about your insurance coverage. You should also review your insurance policy to see what you are required to do under the policy.

Rate Increases

As you probably suspect, if you or the other driver makes a claim against your policy, or if your insurer has to repay the other driver's insurance company, because of damages caused in an accident, expect an increase in your insurance rates.

So, how can you protect yourself without filing a claim and risking increased rates? The best thing you can do is to get the other driver to agree to and sign a settlement agreement in which he or she agrees that the money he or she receives from you is payment for all claims against you arising from the accident. The wording of such an agreement or "release" is absolutely critical, so be certain to research it carefully, or get some help from an experienced insurance lawyer.

Just You?

If you're involved in a single-car accident, such as when you lose control on a wet road and side-swipe a guard rail or tree, for example, your decision on whether to file a claim might be easier. You might not want to file a claim if:

  • You're unhurt and reasonably sure that some type of injury won't show up in the near future, or you can afford to pay for any medical care you might need.
  • There's little or no property damage, or you can afford to pay for any damage. For example, did you damage a homeowner's lawn? Can you pay for it and will the homeowner sign a release?
  • You can afford to repair your car, and the cost of the repairs is less than your deductible.

Even if you can answer yes to these things, your insurance rates still might go up. If the police show up at the scene and give a ticket or citation, maybe for speeding or failure to control your car, that ticket will show up on your driving record as "points" on your license, which many insurers use to help determine your insurance rate and any increases in premiums.

Nonetheless, there may be times when you file an insurance claim without risking a rate increase. If you have the right insurance coverage, you can file a claim for damage to your car that's caused by certain things. This coverage is called "comprehensive" coverage, and you probably have it if you have a new car or if you're financing your car (because the lender wants to make sure that car's value doesn't decline in case it has to repossess it). Generally, your insurance rates won't go up if you file a claim because your car was damaged by:

  • Weather phenomena, like hail, lightening, and wind storms
  • Natural disasters, like earthquakes and floods
  • Vandalism
  • Hitting an animal, such as a deer

Questions for Your Attorney

  • If I call my insurance agent to report an accident, will this be considered "filing a claim" with my insurance company?
  • Can the time limitations be different for filing a claim for uninsured motorist coverage and for filing a claim for liability coverage?
  • If I failed to file a notice of claim about the accident, can I file a later notice that I have been sued by the other driver?
  • Someone told me just calling my insurance agent about damage to my car could make my agent consider raising my rate or cancelling my policy at the next renewal date. Can he do that?
  • I was in an accident and the other driver and I agreed not to file insurance claims and to pay for each other's damages, which, at the time, we both agreed would probably be less than $500. The other driver is now claiming $1,500. Isn't our agreement on $500 an enforceable oral contract?
  • How much will you charge to write a release-settlement agreement so that I can settle another driver's damages without filing an insurance claim?

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