Car insurance: do we dare to use it?

July 25, 2011 3:56 PM

My car got dinged up. Do I pay out of pocket or use my insurance?

My wife was driving my car and it hit a concrete pole. The estimate to fix the damage is from $1000 (to make it legal) to $2000 (to completely fix it).

We know if we use the insurance the premium will go up, but we're not sure by how much. We do have the money to pay out of pocket, but either amount is pretty significant. I think my deductible is $500.

Any advise? Thanks.

posted by Fister Roboto to Work & Money (7 answers total)

You might need to bounce this off someone who can give legal advice in your jurisdiction. In my state, for example, drivers are required to report accidents with property damage over $700 and show proof of insurance to the DMV. I'm not sure, but insurance companies might find out about something like that.

You might be able to pose this as a question to your agent about what, if anything, it will do to your rates and for how long. My agent (State Farm) has done this for me.
posted by Hylas at 4:29 PM on July 25, 2011

Does your insurance offer accident forgiveness? Some policies let you get away with one before it affects your premium.
posted by thorny at 5:08 PM on July 25, 2011

I recently had two claims through Allstate, one for damage caused by a hit-and-run and the other by me. I had to file them as separate claims and pay two deductibles, but I also have accident forgiveness and it applied to both incidents since they were relatively close together. I also only had to pay $300 per deductible, since I had vanishing deductible and haven't had an incident for over two years. Not that this answers your question, but you should give Allstate a look. They've been phenomenal for me, and the funny thing is, it was the Progressive website that said Allstate would be the best price for me, haha! I can't be sure Progressive would be so honest about competitor pricing these days though. :)
posted by purefusion at 5:13 PM on July 25, 2011

Fister - I've been in a very similar situation and can advise.

But, important detail you left out: why did your wife end up hitting the pole? This makes all the difference.
posted by Kruger5 at 6:24 PM on July 25, 2011

Whose fault was the accident? My policy guarantees that my premium will not rise as the result of a claim if I was not at fault. Not sure if that is driven by state law or not.

Anyway, I've never noticed a major change in the past even when the accident was my fault. The insurance company knows that they will have x numbers of claims each year - they just don't know from who.
posted by COD at 7:48 PM on July 25, 2011

Response by poster: She hit the pole because she wasn't paying attention. She checked with the gas station and they didn't care. If anyone can advise, that'd be great.
posted by Fister Roboto at 8:05 PM on July 25, 2011

insurance will be the costlier route, but you the payment will be deferred till whenever your policy is renewed.

3 other things to keep in mind:

- A claim on your insurance stays for 2+ years
- You never know, you might need to go through insurance again, and you don't want to have 1 claim on your policy already.
- Repair shops will work with you on pricing when they know you are not going through insurance.

Good luck.
posted by Kruger5 at 4:36 AM on July 26, 2011