Question
Worth paying $1,800 out of pocket to avoid an increase in auto insurance premiums?
I was in a fender bender recently and the estimate for the other guys' car repair is around $1700-1800. I already have an accident on my file from 1 year ago (October 2017) which made my premium go up from $600 to $900 per 3 months and I'm worried this could push it even further. Is it worth paying out of pocket or should I bring it to my insurance to cover ($500 deductible). To be honest, I repaired my car for only $100 because I am OK with cosmetic damage to the bumper, but I understand why he would want to get his bumper replaced because it is my fault, and he has a right to have it restored to the way it was before the accident.
Answer
There are a few things to consider.
- First, most insurance companies require you to report any incident, even if a claim is not filed.
- Filing a claim will definitely impact your insurance rates. Here are things to consider when deciding to file a claim or not. Below, you can see how an at-fault accident would impact your rates.
- Next, if you can afford to pay out of pocket for the damages, it can be cheaper in the long run than having your insurance rates impacted for the next five years.
- The person you hit might not want you to pay out of pocket and would prefer to handle it through the insurance company. This is also why you need to report the incident to your insurance company as soon as possible.
| Year After Accident | Average Annual Premium |
|---|---|
| 0 - No Accident | $1,713 |
| 1 Year Later | $2,373 |
| 2 Years Later | $2,551 |
| 3 Years Later | $3,109 |