Almost everyone has a minor fender bender at some point. But the next time it happens to you, you may want to think hard before filing a claim: That one claim can cost you a lot more over the long run than you expect.
One Call Leads to Rate Hike
When you have a car crash, you typically call your insurance agent and they take care of everything, from arranging a rental car to getting yours repaired at an authorized shop. All you pay is the $250 or $500 deductible.
But a new report says that may also raise your rates substantially.
InsuranceQuotes.com says a single claim can now raise your rates as much as 44 percent, unless your company offers first accident forgiveness as some do.
The reason: The cost of repairs and medical bills are soaring. For instance, just a small fender bender can cost $2,000 in body shop fees to remove a dent, replace a bumper cover and repaint a couple of panels.
InsuranceQuotes.com says with the average premium of $840, one at-fault fender bender can raise your rates $370 a year the next three to five years.
The report says rate hikes vary from state to state, though, and in its report lists the states with the highest and lowest surcharges.
So one small fender bender can cost you $1,500 over that period of time, on top of the $500 deductible you paid at the time. You might say "doesn't that stink!"
Ways to Save
The group says if no one was hurt and it's just a minor dent, you may want to pay for repairs out of pocket rather than file a claim. For instance, a budget body shop might be able to do a whole repair for $800 cash out of pocket.
However, if there is damage to another car that you are responsible for, or there is visible damage to the engine compartment, you will want to contact your insurance. Just replacing a radiator and other "minor" engine damage can cost thousands of dollars.
And one additional caution: If there's a chance anyone was even slightly injured, call the police immediately.
At that point you will want the help of both police and your insurance company, so you don't waste your money.
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