Should we submit a claim for an accident between two cars we both own?
January 7, 2008 11:39 AM   Subscribe

I backed into my husband's car today with my SUV, and I think I caused about $3000 in damage. Are we better off submitting a claim to our insurance company, or handling this out of our own pocket?

We have called our insurance company already and asked them this same question. They can't tell us how much our insurance will go up because "claims and underwriting are different departments."

We're taking the car to a body shop tomorrow for an official estimate. It is a 2006 Civic. The front bumper and front quarter panel are damaged, as well as the front headlight. It is possible that it may be even more than my guesstimate.

My car, a 2003 Santa Fe, is ok aside from a few scratches on the bumper.

I know I'm an idiot and I feel so bad. Suggestions on how to get back into my husband's good graces are also welcome.
posted by Ostara to Work & Money (20 answers total) 1 user marked this as a favorite
pay out of your own pocket. i had one accident here in toronto causing a TOTAL of $2800 damage. my insurance then went from $2200 per year to $4800 per year. last year it went down to $4200. they told me it will only go back to near what it what before the accident after 3 years.
posted by gman at 11:42 AM on January 7, 2008

near what it was
posted by gman at 11:42 AM on January 7, 2008

Response by poster: Oh, our current insurance for both cars is around $900/year (good driving records and all that)
posted by Ostara at 11:44 AM on January 7, 2008

Best answer: If you record is clean, chances are pretty good this will not raise your insurance premiums. This is pretty minor in regard to the overall payout from a carrier perspective. If you have past accidents or tickets in a short amount of time, you may have to worry about an increase, although I don't know that it's possible to predict much. Unless you are looking at a very significant increase however, it would have to be quite a bit to be more than $3000 over the course of the increase (it should get reduced after a few years with a good driving record).

I did work in auto claims for awhile, but not underwriting. This was my general impression however, as well as my own person experience with driving. I've had some claims that never increased my premiums that I was negligent for. Of course, YMMV.
posted by SpacemanStix at 11:52 AM on January 7, 2008

that's a tough call.

my mom did that, except she hit the SUV with her car causing about $6,000 of damage total for both vehicles. She ended up filing a claim because they couldn't affod to pay for it out of pocket.

I think it depends on the insurance company and other factors about whether or not your insurance will go up significantly. My parents had a marginal increase and it paid off for them to file a claim unlike gman who had the opposite experience. Perhaps a call to your insurance agent could help?

don't feel bad, you're not an idiot. It happens all the time, that's what the body shop people told my mom.
posted by red_lotus at 11:52 AM on January 7, 2008

Response by poster: Surprisingly, I have had no tickets or accidents in the past 10 years. I just wasn't paying attention today. *sigh*
posted by Ostara at 11:58 AM on January 7, 2008

I had a perfectly clean record until I backed in to someone in a parking lot. We were out of town on vacation. I turned it in to the insurance company - maybe about $2k - $3k between both cars. I lost my good driver discount, my accident free discount, and my premium went up about $20 a month.
posted by jaythebull at 12:10 PM on January 7, 2008

making a human mistake does not you an idiot make. Don't think about the decision until you find out how much it is going to cost. Tell the mechanic that you are considering paying out of pocket. If the insurance company isn't paying, the bill might not be as big as it might.

As for getting back into your husband's good graces, I'd suspect that you never left them. A sincere apology coupled with plenty of affection does wonders.
posted by Ironmouth at 12:15 PM on January 7, 2008

I've always figured that if the insurance company had perfect information, there'd be no economic reason for them to charge you anything less than the full value of the claim (how else are they going to pay for it?). Hence, (with perfect information), there'd never be a reason to make a claim unless you can't pay for it out-of-pocket.

Of course, insurance companies don't have perfect information. However, they do have pretty damn good information - that's how they make money. So, it seems to me likely that in most cases, insurance rates should increase more than the cost of the repair. If they didn't insurance companies would die.

I would put my money into paying for the claim rather than paying the insurance company. You can always try working with the repair company and seeing if they'll give you a break because you're paying out of pocket (I have successfully done this on low-price repairs).
posted by saeculorum at 12:16 PM on January 7, 2008

Just wanted to chime in to say that you're not an idiot and shit happens. You shouldn't need to regain your husband's good graces, unless he's perfection incarnate and nary a mistake has he made...
posted by Pantengliopoli at 12:48 PM on January 7, 2008

I backed into my husband's car once too. They were both junkers that we didn't bother repairing, so I don't have any advice for you on the insurance. Just wanted to let you know that you're definitely not alone!
posted by platinum at 1:02 PM on January 7, 2008

So, it seems to me likely that in most cases, insurance rates should increase more than the cost of the repair. If they didn't insurance companies would die.

That's not exactly true. Insurance companies rely on the 'common pool' of premiums to cover claims. Most policies will never have a claim, and the premiums from those policies provide the are the funds that are used to cover the claims of the few. People have serious accidents in which cars are totalled and people seriously injured, but their insurance premium does not go up to hundreds of thousands of dollars.

Sorry if this seems a slight derail from the original question, but the underwriters do not need to pay for the claim out of next year's premium. Next year's premium will be based on how much risk they believe you add to the common pool. If this is your first accident in many years of safe driving, then you are in a better position than if you were a new driver with no history of safe driving, or a driver with a long history of minor accidents.

If you do choose to make the claim, don't forget to shop around at renewal time.
posted by happyturtle at 1:17 PM on January 7, 2008 [1 favorite]

I pranged my door on a garage post last April, State Farm got me a new door for $3000. The semi-annual bill in Oct ($322) didn't go up at all that I can tell, so I'm hoping May will be the same.
posted by panamax at 1:19 PM on January 7, 2008

I've been with SF since I got the car in 2000, btw.
posted by panamax at 1:20 PM on January 7, 2008

You can always try working with the repair company and seeing if they'll give you a break because you're paying out of pocket (I have successfully done this on low-price repairs).

If you go this route, ask them how much of a discount they can offer if you pay with cash (not with a credit/debit card, just a fat wad of cash). Sometimes this makes a difference to some companies, usually smaller companies.
posted by philomathoholic at 1:38 PM on January 7, 2008

I'm not sure what the right answer is for the insurance, but saeculorum and philomathoholic are right about cash discounts with repair bills. With a lot of shops, there is one price that is charged for insurance jobs (basically, the maximum the company will pay), and there is an entirely different negotiation that takes place if you are personally paying for the work. It works best with real, folding cash, but other forms of "cash" including credit cards work, too -- the main point is that you are letting them know that you are eating the cost yourself, and that you really care about the bottom line. Small shops in particular will work with you on this, in my experience (and are also the places that are often the most interested in giving big discounts for real cash, probably for tax avoidance reasons.)
posted by Forktine at 1:54 PM on January 7, 2008

I was in an accident in the fall that caused about $6000 worth of damage to my car. My premium wound up increasing only about $10 a month, factoring in the good driver discount that I retained (it was my first accident in 22 years of driving -- and I still don't think I was really at fault, but the ins. cos. seem to disagree, though all that's a horse of a different color -- so I'm assuming that played a role).
posted by scody at 1:58 PM on January 7, 2008

The only accident I've ever had did about $2000 worth of damage to my car. State Farm paid without blinking, and my rates went down. Of course, this was in the early 1990s.
posted by kindall at 3:49 PM on January 7, 2008

Hopefully this is not the case for you, but I know that with my previous insurer (CSAA), two cars on the same policy were not covered if they hit each other! So if you and your husband's cars are insured together, all the discussion to-submit-or-not-to-submit may be moot.
posted by zeypher at 4:21 PM on January 7, 2008

You can ask your insurance agent what the increased premium will be without "reporting" the incident. The insurance company does not care if you got into an accident, only if you claim reimbursement for it. Asking for advice should not affect your premium (I'm in Chicago, with a major nationwide insurer) So call your agent (NOT the claims people) and ask how much your premium will go up, for how long, then do the math. If deductible + increased insurance cost is greater than the amount of the damage, pay it out of pocket. If it's less (and remember, also, that it is spread out over probably 3 years), then put in the claim. I have done this a couple of times with my kids' fender-benders. Some I paid out of pocket, and some I put in the claim.
posted by nax at 5:19 PM on January 7, 2008

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