Can and/or should I make a car insurance claim — or not?
April 29, 2014 8:16 PM   Subscribe

Our relatively young car (~1 yr) has collected a bit of damage over the past year. One bit of damage is a dent which is starting to rust, so it needs to be dealt with in a body shop. The dent was not our fault, but the result of a parking gate that closed early. We also scratched the car elsewhere in a few places. Those scratches are substantial and our fault, and they also require professional work. We would like to know if making an insurance claim is an option or if we must (or should) pay on our own.

One quote we received to fix all these issues is about $2500 and we expect that other quotes will run in at around the same amount. We'll also need to rent a car for the week (~$200). Our insurance deductible is $250.

Given that the dent occurred about six months ago at a parking facility that disavows legal liability, and given the timing, it seems unlikely we would be able to receive restitution from them. The scratches are recent, but our own fault. (Just to be clear: The scratches are sizable and not fixable with dealer touch-up paint.)

Should I place a claim with our auto insurance company or not? Given the length of time between the dent happening and when we are getting work done, and given that the scratches are our fault, can we even make a claim that would reduce our outlay from ~$2700 to $250?

If we were able to make a claim, I know our premiums would rise as a result, but I don't know by how much. Is there a rough guideline for how much more we would expect to pay, given the bill for the damage? We have not had any accidents before, or parking tickets, etc.

For purposes of answering this question, we live in the United States (NW) and use PEMCO as our insurer.
posted by anonymous to Travel & Transportation (5 answers total)
It's not clear to me that you have comprehensive car insurance, which would cover these sorts of issues. If you don't have comprehensive insurance, your car insurance company will not cover the damages.

If you do have comprehensive car insurance and you want to make a claim, it is not really relevant whether the scratches are your fault. If the insurance company thinks the scratches are the fault of the parking facility, the insurance company will pursue compensation from the parking facility in your place. However, you also have a contractual obligation to report damages to your insurance company promptly, so they may refuse to cover the damages due to the length of time between them happening and you reporting them.

In a perfectly rational world with perfect information (ie, not this world), the insurance company would raise your rates by exactly the amount of money it costs to fix your car. The insurance company's choice is to either penalize you or to penalize all PEMCO customers for the cost of your repair. In practice, the actual cost is born by both you and other PEMCO customers, but with the PEMCO actuaries attempting to put as much of the cost of the repair on you to avoid other customers perceiving their rates as too high. In short, I haven't actually answered your question. However, I'd suggest that if your car accumulates $2500 in scratches in one year, you will probably get another set of scratches in the next year. Using insurance to pay for scratches is a very expensive proposition - not just because of the rates (which will go up), but because of the possibility your car insurance company could drop you due to excessive claims.
posted by saeculorum at 9:05 PM on April 29, 2014 [2 favorites]

Source: I have been reading and writing about personal finance for eight years.

Answer: Suck it up. Drive a dented car.

Postscript: Really? What do you care what your car looks like? It's a piece of metal to ferry you from one place to the next. Again, suck it up. Drive a dented car. Use insurance for really important stuff...
posted by jdroth at 9:19 PM on April 29, 2014 [8 favorites]

Telling the insurance company that, in the space of one year, you have had 3+ minor collisions, seems like a great way to get a massive increase in premiums. Even if they did pay for the damage, you'd be more than paying them back for it over the following years.

Seconding suck it up and live with the dents. Keep your premiums low and avoid claims until you actually need the insurance (i.e. there's an accident or theft which substantially damages the car).
posted by EndsOfInvention at 12:28 AM on April 30, 2014 [1 favorite]

Insurance policies impose a duty to report accidents promptly. Like, as soon as reasonably possible. Same day isn't always possible--hell, the claims line may be closed on the weekend--but certainly within a few days. You've probably violated that duty by not reporting these issues immediately.

Yes, that does include accidents that aren't your fault and accidents that you want to pay for yourself. Insurance companies can be a little understanding about minor stuff that they wouldn't wind up paying for anyway, but they still don't like it when insureds don't report accidents. But if it's something that they would normally have to pay for and you don't report it right away, you run a serious risk of not only having your claim denied for violating the conditions of the policy, but having your entire policy canceled for that very same reason.

This isn't just because they're nosy snoops. Your situation demonstrates precisely that, actually. One of these dents/scratches has started to rust. That's potentially a much more expensive repair than it would have been if you'd gotten it fixed right away. So by waiting to do anything about it, you've potentially exposed your insurance carrier to more liability than it would have otherwise had. That's bad, and it's why there's that duty to report promptly. If the insurance company is going to be on the hook for the damages, they have a right to limit those damages and exert some control over the repairs. It's their money, after all.

Pay for the damage yourself or don't, but understand that saving up claims over time is not how that's supposed to work. Filing a claim about this now is very likely to get you far more trouble than you bargain for.
posted by valkyryn at 7:01 AM on April 30, 2014

Why the interest in repairing it now? You have obviously had the dent for a while. The rust? The other scratches? Since they didn't happen at the same time, the insurance company can make them multiple claims and you will be assessed a deductible for each claim. They can deny the parking garage claim because you didn't report it in a timely matter. Witnesses, security video, are long gone. If the gate was at fault, they could have went after the parking garage for the claim. Even thought garages have signs that say they are not responsible for damage, if it is their fault, they pay. The signs are for break ins, door dings, and such. If a piece of concrete fell on your car, they are responsible.
You could report and see what happens. They may fix everything without batting an eye. So much depends on the insurance company and the person you speak with. Best case, they fix it all under one deductible and life carries on. Worse case, you end up paying for all the damage yourself.
posted by BostonCannuck at 7:41 AM on April 30, 2014

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