Out of pocket or file a claim?

September 15, 2009 10:35 AM

Car scratch costs $500 to fix. Should I pay out of pocket or make an insurance claim?

While pulling into a parking spot, I bumped into a car. This left some slight scratches on the left passenger side door of the other car, and some scratches on my front bumper. I left a note with my contact info and an apology, and the other car's driver took her car to two different auto body shops, both of which gave an estimate around $500 to fix the scratches on her car.

This is an amount that I could pay out of pocket, but since my finances are not great right now this would still entail some belt-tightening. Is it actually still worth it to pay this out of pocket, or should I do this through insurance now? I understand that insurance rates go up after a claim is made -- not to mention the inherent hassle of making the claim -- but I'm having trouble finding information that would let me gauge exactly how big that increase might be. I've sifted through Google and my insurance documents so far, and I've got nothin' conclusive.

My priority right now is just settling this with the other person (incidentally, I have no reason to suspect the other person might be out to screw me whatsoever). I do plan to fix up my own car scratch eventually, since my car is fairly new. But given that this is so cosmetic and that either way I'd end up paying some amount out of pocket anyway for fixing up my car (my collision insurance policy has a $500 out of pocket deductible), this really isn't a huge priority right now.

So, in short, if you were me, would you bother going through the claim process, or would you just suck it up and pay? I'm in Maryland, and my insurance is Geico, if that helps. This is also my first incident of any kind in five years of driving, so I'm a complete virgin to this. Anonymous because I'm paranoid: the throwaway email is [e-mail].

posted by anonymous to travel & transportation (12 comments total)

It's not obvious what the benefit of having the insurance cover it would be, since the deductible is equal to the out-of-pocket cost.
posted by odinsdream at 10:38 AM on September 15

I'd pay out of pocket, but I set my deductible high ($500) because it makes my insurance cheaper. I don't think you'll find reasonable estimates as to how much your insurance will increase.
posted by electroboy at 10:39 AM on September 15

Ask your agent to check the relative cost. If the deductible plus the inevitable increase over 5 years add up to more than $500, pay it out of pocket. Having this discussion with your agent is not the same thing as filing a claim.
posted by nax at 10:43 AM on September 15

Just reread the question (note to self, next time, read carefully). Since she has already filed a claim, your rates are likely to go up anyway. Next time have the other driver go to a body shop BEFORE she files a claim, then pay the her or the body shop directly, bypassing the insurance if it's under or close to the deductible. Totally not worth your rates going up.
posted by nax at 10:47 AM on September 15

It's not obvious what the benefit of having the insurance cover it would be,

He could get his own car fixed too, and still only pay the deductible. If that also costs a few hundred, it could be worth it.
posted by smackfu at 10:49 AM on September 15

If you can afford it, pay out of pocket. I'm not sure how much your insurance rates will increase, or if they will at all. But for something this small, it's not worth putting on the record. The thing is, if you file now and then have a second incident in the next couple of years, your rates will absolutely fly up. We ran into a situation like that; we hit a washed out section of a road and had to file a claim on that, and then a few months later my wife got sideswiped by a semi, and he never stopped and she wasn't able to read his plate as fast as he was going. Since our insurance couldn't collect from someone else our rates shot up. My advice would be to save the claims for when you get something more serious. (And yes, I know $500 can hurt. It would for me, that's for sure.)
posted by azpenguin at 10:51 AM on September 15

In MA anyway, out of pocket is usually cheaper in the long run. From what I remember of an incident a few years ago, a minour incident would have gone against my otherwise good driving record, and even though no points were assigned and I was not at fault - if there ws an expense paid out by my insurance it negated my good driving record: meaning that the $300 paid out was a one time fee, whereas the rise to my insurance premiums would have been around $1100 before the premiums would have returned to pre-incident rates. So... $300 now, or $1100 over the course of 4 years...
posted by Nanukthedog at 10:52 AM on September 15

smackfu: They indicated they weren't interested in fixing their own car. Though, valid point, that would be a benefit.
posted by odinsdream at 10:52 AM on September 15

Honestly, if I was the person you hit I'd be more inclined to file with your insurance. That way I can be sure that my rental car costs will be covered while my car is in the shop. Are you planning on also paying for their rental car? I've been in that situation before where the person wanted to pay directly, and it was so much back and forth with body shop quotes that I just told him to forget it and filed a claim with his insurance.
posted by Burhanistan at 11:51 AM on September 15

follow-up from the OP

"The other person has NOT filed a claim -- we agreed that she would go directly to the body shop to get a cost estimate, and then afterwards I'll decide whether the claim is worth filing or I just write her/the body shop a check.

The $500 out of pocket deductible is for the collision insurance part of my package, which as far as I know only covers the damage to my car -- not the other person's car. If a claim was filed, I think that the damage to the other car would be covered by the liability insurance part of my insurance package, and I haven't been able to find whether there's a deductible for that and how much it might be.

It would be nice to fix up my own car, I just can't spare the extra money right now if it's on top of whatever I'd have to pay for the other car's scratches. In a few months, however, it's definitely doable.

Thanks muchly for your advice, guys."

posted by jessamyn at 11:53 AM on September 15

The deductible doesn't come into play when you're fixing someone else's car with your insurance, only when you're fixing your own. The thing you have to worry about is your rates going up, which they wouldn't do until your policy renews, and if it really is right around that $500 mark, it might not even happen ($500 is usually the threshold for deciding to raise rates because of a claim, and you may qualify for accident forgiveness based on your insurer and policy).
posted by scarykarrey at 12:25 PM on September 15

What I would do is pay out-of-pocket for the other person's car, and just not worry about cosmetic issues with my own car. But that doesn't necessarily help you decide what you should do. Perhaps take a step back and think about the decisions you made when you got this insurance policy. Insurance is hedging your bets -- hedging against the risk that you will incur bills bigger than you can pay. You insured yourself against costs that are more than you can afford. That's how you chose your limits and your deductibles. If you really can't afford this out-of-pocket, file the claim. If you can afford this out-of-pocket, pay for it without filing a claim (and when times get better for you financially, increase your deductibles to reflect what you can reasonably pay out-of-pocket).

BTW, you don't have to wait to find out what your deductibles, etc., are; it's not on your insurance card but it's in your policy (you have an electronic or printed version somewhere, I bet.)
posted by Houstonian at 2:40 PM on September 15