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Before Filing a Car Insurance Claim

You have a great relationship with your insurer. Your rates are low, because you have a good driving record and have never filed a claim. Then all of a sudden something happens to your car and you need to file. But you are terrified at the effects filing will have on your rates. Here's what you need to know before filing a car insurance claim.

Many Drivers Hesitant to File

Have you ever had a minor fender bender or otherwise sustained minor damage to your vehicle but were afraid to file a claim because you didn't want your rates to go up? If no other party was involved, a lot of times drivers will just keep quiet, often never even getting the damaged fixed at all. The only trouble with that sort of decision making is the question of the point of insurance. Why pay all that money for your policy if you are never going to use it? Auto insurance rates have gone steadily up, and a big part of the reason for that is the ever increasing cost of working on a car. Many people are too scared to file a claim because they can't afford a rate increase, so they just ignore the damage and move on.

But there comes a point when we need to recognize that filing a claim is not always a bad thing. Our auto insurance is there for our protection. If you get to a place where you need to make a repair and cannot afford to pay for it, it just makes good financial sense to go ahead and file a claim. We all would love to get that accident free discount forever and ever, but that's not the way things work for most drivers. And this is exactly why we have car insurance.

After a Car Accident

After a car accident, the first part of the claims process is pretty simple. An adjuster will be signed to the claim, and may talk to both drivers involved in the accident to get both of their perspectives on what happened. The adjuster may also consult police reports, and will likely look at both cars as well. At this point, the adjuster will work on your behalf to ensure that repairs are done and that payment is made.

What happens after that claim is opened can vary based upon the situation. One variable that can significantly alter your next move is whether or not you were at fault in the accident. If you were at fault in the accident, you could experience a rate increase, or you may be let go altogether by the insurance company. This could occur in one of two ways. You could be cancelled, which means the car insurance company drops you completely (although by law they do have to give you some notice). Or, you could be non renewed, which is not as severe but still not very pleasant. Non renewal means your company is letting you know that they will not take you back as a customer once your current policy expires. Generally speaking, there are only a few reasons why a company would ever cancel a policy holder. One is for nonpayment; another is for fraudulent application; and the third is for a suspended license. So, most of the time a driver would be non renewed. But there are times when cancellation can happen, like when there are late payments on the recent record of the driver.

Ask About Penalties before Buying

Ideally, a driver and policy holder will already know exactly what the penalties for at fault accidents are before it comes time to file a claim. This brings us to another point to think about before you file a claim. In fact, this is something to do before you even buy a policy. Ask the insurance company you have chosen to work with what their punishment policy is, so that you know. If it seems too harsh and it makes you uncomfortable, it may be worth paying a few dollars more to have a more lenient policy to lean on with a different carrier.

You can easily do a little bit of research ahead of time and find out what you need to know. Consumer groups have information such as companies' rate of renewal, which can be an indicator of this type of problem. Working with a very stern company and starting off with a good rate may seem fine at first, but be prepared for steep increases in your rates if anything should happen. Take all the time to explore the facts and do not rush into a decision. Make sure the auto insurance company you have chosen is the right one before you file a claim.


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