Can I pay for my own repairs without filing a claim?
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UPDATED: Mar 13, 2020
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Auto insurance is designed to pay for damage that you cause to another person’s property or home; it can also pay for damage to your own vehicle if it sustains damage in an accident. In some cases, however, individuals do not wish to file a claim to pursue damage. Filing a claim may cause a person’s insurance rates to increase, or the damage may be too minor to bother with a claim. Depending on your circumstances, you might not need to file a claim at all; you may also wish to report the accident to your insurance but pay for damage out of pocket.
Why not to file a car insurance claim?
There are three main reasons why you may not want to file an insurance claim:
You are not at fault for the accident
If someone else rear-ends you or hits your vehicle while parked, for example, you are not responsible for paying the damage to your vehicle. In this case, you can file the claim directly through the other person’s insurance company. Of course, you may still want to file the claim with your company as well. Your insurer will probably be faster in settling your claim.
You don’t have the appropriate coverage
If you’re involved in a single-car accident and you only carry liability coverage, your insurance would not be able to pay for your damage. In this case, you would not need to file a claim. If anyone else’s property was involved in the accident, however, you would still need to report the accident to your insurance company; damaged property might include trees, guard rails or telephone poles.
The damage is less than your deductible
Whenever you use your collision or comprehensive coverage on your policy, you are responsible to pay a portion of the repairs yourself. This portion is called the deductible and is due to the repair shop at the time repairs are completed. If your deductible is higher than your repair cost, or if the repairs cost just a few hundred dollars more, then you may not want to file a claim.
Even if all of these factors apply to you, you may still want to report the accident to your insurance company. A claim should not affect your rates unless the company actually pays for the damage. This means that simply filing a claim should not cause your rates to increase: The insurance company would need to issue settlement first.
Also bear in mind that car repairs can be very costly, and even minor damage can cost a substantial amount. Modern vehicles are constructed primarily from plastic and fiberglass parts that must be replaced rather than repaired when they sustain damage. Even a small hole in a bumper could cost well over $1,000. Before you decide that an accident is too minor to report, be sure to obtain several estimates and verify how much your repairs will cost.
Although it is within your rights to pay for your own damage, there are a few occasions where you should consider filing a claim:
If you are at fault
Any time you cause damage to another person’s property, you should always report the claim to your insurance. Even if you agree to pay for the other person’s damage out of pocket, you should alert your insurance company about the incident. This prevents the other party from filing a claim against your policy when you have already handled the damage.
If there is substantial damage
Even if your vehicle is not covered by your insurance policy, you should still contact your insurer any time your vehicle is at risk of being a total loss. This will ensure that your vehicle is removed from the policy if you no longer use it, and your insurance company will be able to provide you with necessary paperwork for the DMV.
If you are making payments on the vehicle
Cars with liens against them must be repaired fully in the event of an accident. It’s imperative to maintain good records about these repairs in order to provide the information to your lien holder. The easiest way to maintain these records is by filing a claim; this will also guarantee that the vehicle is repaired to your satisfaction.
While you are never required to file a claim to have your repairs completed, using your auto insurance is often a wise financial choice. Even if you don’t pursue the claim for settlement, it’s always a good idea to let your insurance company know whenever an accident has happened in case their services become necessary later.