“To file or not to file a claim?” That is the question. But fear not, there is a surprising option to consider if you are involved in a single vehicle accident.
Filing an auto insurance claim
Filing an auto insurance claim is a conundrum for many drivers as the resulting premium surcharge may equal or exceed the cost of the repairs to their vehicle. A typical example is when someone backing out of his/her garage scrapes and/or dents the side of the vehicle. They discover they are faced with a $1800 auto body shop repair bill.
Faced with a large repair bill, the driver typically calls his/her agent to explore filing an auto insurance claim.
What filing a claim could do
At our agency, we explain that the collision damage will be covered after the deductible, which is commonly a $500 deductible. However, the driver will be surcharged 3 points under the current Massachusetts Safe Driver Insurance Plan. For a driver with an excellent driving record of 99, this means he/she loses the excellent driving credit, plus the addition of 3 surcharge points. Each point averages $150. It can easily cost between $450-600 in surcharge a year for up to 6 years under the current state guidelines for a $1800 repair.
You can see this is not an appealing solution for the driver. He/she still incurs out of pocket expenses, and he/she will be surcharged for a number of years However, sometimes drivers cannot afford the out of pocket repairs and will opt to file the claim and pay the resulting surcharge. Drivers may appeal a surcharge after it is issued. We have seen a good percentage of drivers with good driving records be successful with this appeal, but there is no guarantee.
There is one unexpected option to consider if you find yourself in this situation. If you are nearing the point that you are considering trading in your vehicle, it may be a good time to stop at your local auto dealer for a quote. In recent months, I’ve suggested this to several customers trying to avoid a costly surcharge. The majority of these cases were stunned to learn that they could still get an excellent trade-in on the vehicle even with the damage. They opted for the trade. It was a win-win situation. The customers avoided a costly surcharge and/or out-of-pocket repair expenses, and they drove off in a newer model vehicle with attractive financing.
The success stories with successful trade-ins were with vehicles that were well-taken care of, and many of the vehicles were serviced by the dealer. Of course, a trade-in may not always work in the driver’s favor, but the option is certainly worth keeping in mind.
For an auto quote from us, click the button below. Any other insurance questions? Feel free to contact us, or leave a comment below. Learn more about auto insurance here. Read another staff member's blog about Understanding Your Auto Insurance Policy.