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Car accident bypass insurance and pay

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Sometimes, after a car accident, it’s obvious that you’ll want to get ahold of your insurance company as quickly as possible. Major damage has been done, or someone is hurt. But the truth is, not all of the 10 million car collisions that happen annually are serious—in fact, the vast majority of them are non-fatal. That means that tens of thousands of folks are inconvenienced on a daily basis by a minor accident.

Of the 10 million car accidents that happen annually, most are not fatal.Share on Twitter

Chances are, you’ve likely had someone offer to pay you out of pocket post-fender bender, or maybe you’ve even been the person begging proposing to avoid getting insurance involved. Quoted wanted to know: Is this ever a good idea? Are there some cases in which the possible rate increase might not be worth telling your insurance company about your accident over? As usual, we headed to the experts. Here’s what we found about when to file a car insurance claim—and when to keep mum.

First, a few Post-Accident Reminders

We have a longer post on what to do after a car accident that’s worth checking out, but for this post, we spoke with Christin Wiley, a personal risk advisor based in Tennessee, about the few things she always reminds her clients are critical financially after an accident.

“A couple little tips I tell my clients about filing accidents: First of all, I always suggest attempting to file a police report or an incident report, so that the other party won’t be able to come back after the fact and try to twist the truth (I’ve seen that done all too many times). Second, I tell people to never discuss the details of the accident with anyone but the police and insurance company. It’s up to the police and insurance adjustors to determine the fault of the accident, not you. I have heard of too many people saying, “Wow, I’m so sorry, I didn’t mean to do X…”

Sound advice: Get the police and your insurance involved, and keep your mouth shut. But, Wiley adds, this isn’t always necessary, depending on the accident.

…And One Giant Disclaimer

Wiley says she always tells her clients the same thing: Check your insurance policy documents. “Many insurance policies state that you must notify the insurance company of anything that might lead to a potential claim. Also, there are many different state and insurance company specific time limits to filing a claim; so, always know of any applicable time limits.”

And of course, if anyone is even remotely injured, always file a claim. More on that below.

Now that we’ve got that out of the way, though:

3 Times it Makes Sense Not to Involve Your Insurance Company

Best tracker car insuranceTo call your insurer, or not?

1.) It was a one-car accident and you’re not injured, or if you are, you’re able to pay for your medical expenses yourself.

2.) You can afford to pay for the costs of damage to your vehicle—or the costs of the repair are close to or not much over the cost of your deductible.

Joseph Ritter Jr., a Certified Financial Planner based in Florida, once had a little damage done to his own car that ended up costing him much more than he expected. He explains:

“About ten years ago, we were visiting relatives out of town when I noticed that someone had pried the emblem off our car and scratched the paint. Although it was vandalism, I didn’t know where it occurred. Thinking I was protecting myself, I called our insurer. When we got back home, I went to a local body shop, and they gave me an estimate of less than $100 to repair the damage. That little incident stayed with us for 5 years. Even though the claim had no monetary impact, just the fact that we made a claim affected our insurance rates. Most if not all insurers require prompt reporting of claims. However, for minor incidents not involving injury, property damage or when the vehicle is still safe to drive, my advice is to make a police report and obtain an estimate of the damage before contacting the insurer. Just be sure you do it promptly.”

So let’s break down that math:

  • The cost if Joseph had simply gotten it repaired: $100
  • The cost of 5 years of an additional $100 tacked onto each six-month policy for the claim: $1,000

Paul Moyer, an independent insurance agent based in Florida, was a bit more bold in his claim: “There are very many times that filing an auto insurance claim is a bad idea,” Moyer says. “It really has to do with the math of the policy.”

“I just had a client that backed into his own vehicle. He caused $1,500 maximum of damage and $1,200 minimum. His deductible was $1,000 so he had to pay that before the insurance would kick in anything. So his maximum out of pocket would be $500. If he filed the claim his rates would also go up and he would probably end up paying back that amount over about 12-18 months and then just get penalized from there on out. This happens frequently in small accidents where a driver could do much better by just paying out of pocket.

3.) There’s little to no damage to someone else’s vehicle or property.

This one is straightforward: If you happened to kiss a giant SUV and not leave any lipstick, so to speak, you might not need to get insurance involved. But serious smooches (aka actual accidents) require trading of personal details.

And 3 Times When You Need to File an Insurance Claim

Just as there are times it might work in your favor not to involve your car insurance company after a crash, there are times when you really should file a claim:

1) Anyone is injured and your vehicle is involved. If you, passengers in your vehicle, anyone in the other party, or any pedestrians are injured from a crash, you’ll need to file a claim–especially if there’s a good chance you’ll be found at fault. Medical expenses can skyrocket quickly, and not filing a claim can leave you open to litigation. If you wait to get sued before filing a claim your insurer could deny the claim altogether.

2) When fault isn’t so clear. If you’re involved in a crash with another party that results in either property damage or injuries and fault is disputed in any way, you’ll need to file a claim so that your insurer can represent you. Insurance companies deal with insurance companies, and yours and the other party’s will need to figure out who will pay for what amongst themselves.

3) You hit a fixed object, your car is vandalized or damaged without you knowing who did it, or your car sustains weather-related damage and the costs for repairs of your vehicle or your medical expenses are greater than you can afford or want to pay. If you need $20,000 worth of medical attention, you’ve got to file a claim. Likewise, if damage from an uninsured driver, or you hitting a tree, causes significant damage to your vehicle (and you’ve got insurance covering these events), file a claim.

If you’re going to file a claim, it’s best to do so as quickly as possible–at the scene of the wreck, if possible. You can find a list of what info you’ll need to file a claim here. Once your claim is filed, the insurance adjuster will take care of reviewing important materials like the police report, witness accounts, and photos, and they will handle payouts to the other party (if applicable). If you’re the one who needs repairs, the insurance company will work with your repair shop.

And what can you expect from your claims process? J.D. Power surveyed customer satisfaction at top U.S. auto insurance companies—their results here. As for what you can expect from a payout: a 2016 report from the National Association of Insurance Commissioners found that the nationwide average car insurance payout was $841.23 in 2013 (the last year for which data is available), reports The Insurance Information Institute.

The Bottom Line

We think a safe rule of thumb is: When in doubt, involve your insurance company. One claim won’t always set you back either—some auto insurance companies offer accident forgiveness, where the first time you file for a claim, it has zero effect on your rates. But it’s also always good to keep in mind that the whole purpose of car insurance is to protect consumers from potential financial disaster—not a small financial inconvenience.

Got a question about whether you should file a car insurance claim? Click to ask a licensed insurance agent your questions → Firebond classic car insurance

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Accidents are the reason you bought car insurance.

Instead of losing your car because of a moment’s inattention, it will be repaired or replaced. Instead of facing a battery of lawyers yourself, you have an experienced insurance company to represent you. Instead of trying to find a body shop and manage a repair, you have experts in collision damage overseeing the process.

You may move quickly from gratitude to worry when you realize there’s a price to be paid. An auto accident can leave your rates untouched, or it can result in a surcharge that inflates your car insurance bill for years to come.

If your car was determined a total loss after an accident, read our guide on what to do with a totaled car.

Here are answers to some of the most common questions we get about car accidents and the types of car insurance needed to make everything right.

What should I do after an accident? What information should I exchange?

State laws vary, but in general the steps to take after an accident include the following:

Stop at once. Position your car so that you don’t needlessly block or endanger others. If you drive off from the scene, it will be considered a hit-and-run, which is a serious infraction in most states.

Check to see if anyone is injured. Some states require that you render reasonable aid if anyone is injured, but don’t do anything that could cause further injuries.

Call the police for a report. Insurers like to have a police report if possible, and it’s required in many states. If you have a minor parking lot accident, the police may not have time to come to the scene, but you will be able to tell your insurer that you did make the call.

Exchange information. The basic rule of thumb is to exchange the following information with the other driver:

  • Name
  • Name of the owner if not the same as the driver
  • Names of any passengers
  • Vehicle’s make, model and license plate number
  • Insurance information – company name, policy number and phone number to call for claims

You are not required to show your driver's license, proof of insurance or your contact information to anyone but the police. You do not need to ask for that information from anyone else.

We’d also suggest that you:

Find witnesses. Get their names and phone numbers. Encourage them to stay until law enforcement comes so that their statements can be taken down. Independent witnesses tend to give an unbiased description of how the accident happened, which insurance companies like.

Take pictures. If possible, take photos of the damage to each car and the whole accident scene. If you have a phone that takes good-quality pictures, use it. If you don’t, keep a digital camera in the glove box. A picture can be worth a thousand words when making an insurance claim.

Check with your department of motor vehicles (DMV) to find out what’s required after an accident. Some states require an accident report if there are any injuries and/or property damage over a certain monetary threshold.

Who contacts the insurance company after an accident?

The drivers and others who are filing claims contact the insurance companies that are involved.

If the other driver was at fault, contact his or her insurer to make your claim. Also, contact your own insurer if your policy requires it, or if you are making any claims under your own coverages.

If you were at fault, contact your car insurance company to notify them of the accident. Advise your insurer if others likely will be calling to file claims or if you need to file one.

The police and DMV don’t call your car insurance company and tattle on you.

Who determines who is responsible for the accident?

Both law enforcement and insurance companies make determinations on who is at fault, or if both drivers are partially at fault.

For the purpose of being ticketed and facing penalties for traffic violations, the police will determine who did what and charge the drivers accordingly. For the insurance companies involved, a claims adjuster will be appointed and decide fault. The police and the insurance companies don’t always agree on fault; for claim purposes, the insurance companies go by the decisions of their respective adjusters. Many people find it intimidating to speak with the adjuster. Read our page on insurance claims for tips on how to deal with insurance adjusters.

It may be that one driver is found to be fully at fault and will thus be liable for all damages, or both drivers may be found partially at fault for the incident. If both drivers are found at fault, then state negligence laws will determine whose insurance pays what.

No-fault insurance applies only to bodily injuries. Your personal injury protection (PIP) pays for your own medical bills, but if the other driver was at fault, his liability coverage would pay for damage to your car.

What type of accident is considered to be a collision?

An accident is typically claimed under collision coverage when your car hits or is hit by another car or object, regardless of fault. Upset of your car, such as flipping your vehicle or rolling down an embankment, is also a collision claim.

Hitting another vehicle or an inanimate object like a tree, pole, house, fence, etc., all would be considered a collision accident claim.

What type of accident is considered to be comprehensive?

An accident that is “other than collision” is considered comprehensive if it is covered by your car insurance policy. Damages to your vehicle from fire, vandalism or theft are comprehensive claims. Damages from natural occurrences, such as floodwaters, high winds and hail, are covered by comprehensive coverages.

Also, making contact with an animal is a comprehensive claim. So, if your accident is with a dog, deer, cow or bird, it will be considered a comprehensive claim.

Does an accident affect my car insurance rates? If so, for how long?

An accident’s effect on your rates depends upon the circumstances of the accident and how many claims you’ve had in recent years.

Comprehensive claims are less likely to be your fault, so they typically won’t raise your rates. Collision claims are more likely to hike up your rates.

If you’re at fault, it’s your first accident and damages are minor, it may eliminate your good driver discount, but not much else. If you weren’t at fault and the claims were through the other party’s insurance, it likely won’t affect you either. If, however, you’ve already made a few claims in a short period of time, any type of claim may affect your rates since you appear to the insurer to be accident-prone.

For example, some car insurance companies won’t impose a surcharge if the accident didn’t cause damage or injury in excess of $1,000, unless you have had two or more of this type of accident within the last three years.

State insurance laws also come into play. Some states allow insurers to surcharge drivers only for certain types of accidents or if damages were over a certain monetary amount.

An accident typically will affect your rates anywhere from three to five years; it depends upon state laws and the guidelines of your car insurance company.

How long does an accident stay on my record?

It varies by state. In some states, accidents don’t even go on your driving record, or only appear if you were deemed at fault and ticketed for a traffic infraction. In other states, accidents go on your record and stay anywhere from one to five years. You’ll have to contact your state’s Department of Motor Vehicles to find out if the accident will go on your record and how long it will stay there.

If I don’t report an accident, does my insurance company know?

If there is no police report, nothing noted on your driving record and you paid out of pocket for any damages you caused, it would be unlikely that your insurer would know about a minor accident you were in. That's also true if you were in an unreported single-car accident that resulted in no claims.

If there are claims involved, your car insurance company will know about the accident even if you don’t get a police report or personally notify your insurer of the incident. When claims are paid out, auto insurance providers place the claims information into a central database.

When you apply for a new policy with a new insurer, it, too, will obtain your claims history, and see any previous accidents and claims you had.

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Insurance companies are making it tougher and tougher to collect medical costs incurred due to minor car crashes. According to a recent 18-month investigation conducted by CNN, you could be in the fight of your life if you're trying to get an auto insurance company to pay medical costs you incur due to an auto accident, even though the accident was not your fault.

The article states that this type of "insurance hardball" particularly happens in relatively minor accidents such as fender benders where there is no injury that may be seen by the naked eye or established with an X-ray.

This insurance-company's- "play-tough" trend is apparently a recent one, a strategy adopted and religiously enforced by the nation's two largest insurance companies, State farm and Allstate. According to the CNN investigation, the result of such a strategy has been extremely profitable for the insurance companies, but has hurt consumers significantly. People end up getting dragged through the court system over fender bender claims, but no one sees any benefit such as reduced premiums. In fact, the dirty little secret of the insurance industry for the last 15 years has been this - they're paying out much less for minor auto accidents, their profits are soaring as are your premiums. Of course, for them, it's a winning formula.

CNN's investigative team reportedly reviewed more than 6,000 company documents and court records and conducted interviews with numerous people including former insurance company insiders, accident victims and other experts. This is what they learned. If you challenge an insurer after a car accident and refuse to accept what the insurance company offers you, even if you are insulted by it - you will be left with little option but to go to court and be dragged through a complex, expensive and slow system.

Why is it that fighting an insurance company is not beneficial to a consumer? Because it takes up so much time and so much money. You can't really turn to a personal injury lawyer because the experienced ones refuse to take on these cases. They know that the payoff for their client and the law firm is to low to make it worth taking up the cause. The law firm makes no money and the client is dissatisfied with the recovery the law firm got for them. It is a now win situation for the lawyers. It is simply not worth it for them to be involved.

Insurance company employees at Allstate were reportedly instructed to get rid of claims quickly by offering a pittance to accident victims - in some cases, amounts as low as $50. The injured person could take it or leave it or sue. And then the insurance companies complain about the volume of lawsuits.

CNN talked to two victims who experience this first-hand. Roxanne Martinez of Santa Fe suffered neck and back injuries when she was sideswiped by a driver insured by Allstate. After three years of back-and-forth, the company offered her $15,000, barely half of what she needed to cover lost income and pay medical bills. She took it to court and four years after the accident, a jury awarded her $167,000 plus interest.

But an Indiana woman, Ann Taylor, was not so lucky. Taylor suffered a herniated disc and muscle tears after she was rear-ended by a State Farm insured. Her bills and lost wages totaled nearly $15,000. But how much did State Farm offer her? $2,000. She was insulted and she sued, but the jury returned with an award of only $1,500 because the insurance company's attorney showed them an enlarged picture of Taylor's car after the accident, in which the vehicle had a small dent. So jurors said they thought Taylor was only trying to get more money out of the insurance company.

Experts say this strategy was devised to boost profit for the insurance companies in the mid-1990s with the help of a consultant. Those documents obtained by CNN recommend that insurance companies put on their boxing gloves when it comes to soft-tissue injuries in minor crashes. Their strategy outlines three D's - denying a claim, delaying settlement of a claim and defending against the claim in court. Other experts say that this strategy helped insurance companies weed out so-called victim's attorneys "who make a living off auto accident victims." They argue that lawyers are upset about insurance companies playing hardball with the public because they fear that "the gravy train is over." The insurance companies did not mention how their tactics were unfair to the innocent auto accident victim; they just blamed everything on the personal injury attorneys.

The party that really suffers in a minor injury crash is the average driver, the guy who is not ready financially to spend thousands at a given time to handle medical expenses for issues such as chiropractic work, which is not covered under many health plans or to be off work for a week or more. It is the average consumer who suffers as a result of this profit-mongering strategy adopted by insurance companies. It is these companies that stand to profit millions by not paying what is due to innocent, injured auto accident victims and then worsening the situation by increasing premiums.

The truth is that a minor car accident can cause a significant injury. This is especially so to seniors and people with preexisting conditions... We've had clients who suffered severe back injuries in a moderate rear-end accidents. Yes, many of them were elderly but aren't they entitled to safe passage on our highways? Aren't they entitled to compensation for the damage done, regardless of their age? Yes, many of the others are people with preexisting conditions, especially "degenerative disc disease", a medical term for the wearing out of your spin through age.

We have seen people in the forties who are as fit as can be get into a small or moderate rear end collision and have serous neck and back issues. The insurance company claims it is a preexisting condition, "degenerative disc disease" and they refuse to pay. In these cases it is true that the "degenerative disc disease" was present before the accident. What wasn't there before the accident was the pain and discomfort. The "degenerative disc disease" was asymptomatic; meaning it wasn't hurting or causing any problems. The accident caused the degenerative disc disease - to become symptomatic, in other words, painful and in some cases debilitating.

Just because you are over 40 years-old does not make you fair game for a spinal injury or for an insurance company rip-off.

There are some steps you could take to make sure you are protected or covered if you get involved in an auto accident - major or minor. The first step, if you are able to do so after an accident, is to get insurance information, name and address of the parties involved in the crash and any witnesses. Also, take as many pictures as possible of the site even if it's on your cell phone. Finally, get a thorough check-up. Remember that symptoms could surface after several days up to a year or more.

We have recommended to a significant number of people to just take the negligent driver to small claims court. Bypass the insurance company altogether. Bring the traffic collision report and your medical records to court along with any witnesses you have to your accident and the difficulties you have suffered since and let a judge decide. The negligent driver's insurance company will pay the judgment and neither of the parties can be represented by an attorney.

Small claims court is quick and easy. It is much quicker than haggling with an insurance adjuster for months. The people who we have assisting in their preparation for their small claims court hearing have generally done very well compared to the insurance company offer. And the insurance company hates it.

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