If you are involved in a car accident, your insurance company expects you to report it. Although there is no law that requires you to tell the insurer about a particular incident, the company will want you to be forthcoming about all accidents that involve the insured vehicle. Not reporting an accident to your insurance company can be beneficial at times, but it also has its drawbacks.
Reporting a car accident to the insurance company has many advantages. Your policy is a legal contract between you and the company. The company is legally obligated to compensate you for injuries as well as repair damages to your vehicle per the terms of the policy. If the accident was not your fault, your insurance company can assist when communicating with the other driver's insurance company. Further, if the other driver is uninsured, and your policy protects against uninsured motorists, you'll avoid paying out of pocket for repairs and medical bills by filing a claim through your own carrier.
In some cases reporting an accident to the insurance company can have a negative impact on your policy. Although insurance companies want you to report all accidents no matter how minor, multiple claims can reflect poorly on your insurance record as well as affect your premiums and your ability to obtain a preferred policy in the future. Preferred rates are reserved for good drivers with little or no claims history. Even if you report a not-at-fault accident or if no claims were paid out, it can still affect your claims experience and insurance record for years to come.
An alternative to reporting an accident to your insurance company, especially if you are at fault, is paying for minor repairs yourself. If the amount of damage is less than your policy's deductible and no one was injured in the accident, you may also want to take care of the incident yourself. In a not-at-fault accident, consider settling the incident with the other party without involving the insurance company. Exchange personal information and agree to a settlement once you have the opportunity to obtain repair estimates. Exercise caution, however, if you were not at fault to avoid paying for your own repairs if you can no longer get in touch with the other driver.
If you decide not to report an accident to the insurance company, do not underestimate damages to your vehicle or the extent of your bodily injuries. Small dents and scratches may appear relatively simple to repair, but depending on the model of your vehicle and the cost of labor, minor damages could quickly increase by hundreds or even thousands of dollars. Also, it can take a day or two for soft tissue injuries, such as neck and back strains, to appear. Unless you can afford to pay out of pocket for medical costs, you will need your insurance company's help to recover expenses.
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