Insurance Claims: When and How to File One

Dealing with car damage can be stressful, but insurance claims provide a way to recover financial losses. Knowing when and how to file a claim helps in making informed decisions that protect you financially. Here’s a guide on car insurance claims, when to file one, and instances when you might avoid it.

What Is a Car Insurance Claim?

A car insurance claim notifies your insurance provider that you need to use your policy to cover expenses resulting from damage or loss. It’s your way of requesting financial assistance to repair or replace your car following a covered incident. The process typically starts with a phone call, online form, or insurance app submission. Filing a claim helps recover the costs associated with accidents, theft, vandalism, or other covered situations.

The specific circumstances surrounding your claim will depend on the types of coverage in your policy. Common coverage types include:

Liability Coverage: Required in most states, it covers damage to other people or their property when you’re at fault.
Collision Coverage: It helps repair or replace your vehicle after an accident, regardless of fault.
Comprehensive Coverage: This covers non-collision damage, such as theft, vandalism, or natural disasters.

When Should You File an Insurance Claim?

You should file an insurance claim whenever an incident occurs that your policy covers, especially if the costs exceed your deductible. Here are some key situations when filing a claim is advisable:

When Repair Costs Exceed Your Deductible
If the repair costs are higher than your deductible, filing a claim saves you money. For instance, if your car sustains $1,500 worth of damage and your deductible is $500, filing a claim will cover the remaining $1,000.
When You Cause an Accident or Damage Someone Else’s Property
If you’re at fault in an accident, it’s best to file a claim, even if the damage appears minor. Your insurance company can coordinate with the other party’s insurer to settle the claim, ensuring that the legal and financial responsibilities are addressed properly.
When You’re Hit by Another Driver
Regardless of who’s at fault, start the claims process right away. Gather as much information as possible at the accident scene, including the other driver’s insurance details and witness contact information. Document the damage with photos and videos.
When Someone Gets Injured
Filing a claim promptly is crucial if injuries occur. Medical costs can add up quickly, and your insurance needs to assess the situation accurately to cover expenses. Even if injuries seem minor, symptoms may appear later, making it risky to avoid filing a claim.

Is There Ever a Time You Shouldn’t File an Insurance Claim?

While insurance claims offer financial and legal protection, there are times when you might consider skipping the process:

When the Damage Is Minor and Involves Your Own Car
If the damage costs less than your deductible or is minimal, you might choose to pay for repairs yourself. For example, fixing a small scratch or dent can be more affordable than filing a claim that could raise your premium. However, you should still document the damage and consult your insurer before deciding.
When You Don’t Have the Appropriate Coverage
Not all types of damage are covered under every policy. For example, collision coverage is needed to claim repairs if you’re at fault in an accident, while comprehensive coverage covers non-collision incidents like theft. Without the right coverage, you’ll need to pay out-of-pocket.
When Minor Damage Involves Someone You Know
If you accidentally cause minor damage to a friend’s or relative’s car, you might decide to handle the repair costs privately. However, settling such matters without insurance may not always be the best approach, especially with strangers.

How Will an Insurance Claim Impact Your Premiums?

Filing a claim may lead to an increase in your car insurance premiums. Even when you’re not at fault, insurers may consider you a higher risk after an accident. Data indicates that drivers who file at-fault claims typically see a 41% average increase in premiums for full coverage policies.

However, some insurers offer accident forgiveness, which means your first at-fault accident won’t increase your rates. This option may come as part of your policy or be an add-on feature. If your rates increase after filing a claim, comparing quotes from other insurers could help you find a better deal.

What Happens If Another Driver Files a Claim Against Your Insurance?

If another driver files a claim against your policy, your insurance company will investigate the incident to determine who was at fault. They will review police records, gather statements from involved parties, and assess damage reports. If you’re found at fault, you may need to pay your deductible and could see an increase in your premiums during the next renewal period.

Conclusion

Filing a car insurance claim helps recover financial losses after an accident or covered incident. While it’s important to file a claim when significant damage or injury occurs, you should evaluate whether filing is worthwhile for minor incidents. Understanding your policy, knowing when to file, and being aware of how claims impact your rates will help you make smarter insurance decisions.

Choosing when to file a claim depends on the situation, your policy, and the potential costs involved. Always weigh the benefits against the drawbacks to protect both your finances and your insurance standing.