There are not many things in life that are as disruptive as a car accident. Whether it is a major collision or just a fender-bender, the aftermath is rarely simple or easy to deal with. Not only do you have to deal with the shock of it, but you also have so many considerations — about who is at fault, how you are going to pay for someone else’s repairs or how you can afford your own. If you have insurance then you shouldn’t have to worry about that aspect, right? Wrong!
Motorists carry insurance because it is the law in every state, but the specifics are varied according to where you live. The problem with insurance is that it costs you a lot, but you rarely get anything from it. So it would make sense that if you are unlucky enough to get into a car accident, even a minor one, you would want to get your money’s worth. Due to the way that auto insurance carriers handle accidents, though, it might not make good financial sense to make a claim.
If you are in an accident and obviously at fault, you might be tempted to just pay out of pocket rather than get your insurance company involved. And you might be right. Many insurance companies are now upping the ante and punishing people when they make claims.
Sometimes it might be easier to bite the bullet and pay the short-term charge instead of having an increase in your premium that lasts indefinitely. It used to be that only major collisions had any real effect on the cost of your auto insurance premium, but times are changing. Insurance companies are beginning to raise your costs for something as minor as a fender-bender.
Making things worse, just like healthcare, the costs of vehicle repairs have risen sharply in the past two decades. There is no such thing as a quick or inexpensive fix anymore. A minor auto repair can cost upwards of thousands of dollars. The problem is that if you offer to take care of someone’s car when you are in an accident, you are exposing yourself legally to some potential real disaster.
If you don’t make a claim for a car accident using your insurance, then you are admitting guilt and can be opening yourself up to a lawsuit filed by a car accident lawyer. If the other person in the accident ends up being injured or suing somewhere down the line, that can leave you with very little recourse and a whole lot of trouble. The best thing to do when you get into a car accident is to call your insurance company — but that isn’t very comforting when you know the bill is going to be hefty and long-lasting.
In Massachusetts, the legislature passed a law in 2015 stating that unless a car accident is something major, the insurance companies couldn’t penalize a driver by raising their premiums. The problem? The insurance companies apparently aren’t following the law and don’t care. Just a simple fender-bender is costing the average Massachusetts residents upwards of $600 or more.
According to the law, the insurance company has to incur a cost more than $1000 before they can penalize you for a minor accident; for major accidents, the insurer has to be on the hook for more than $5,000 before they can raise the amount you owe every month. When they do raise your premiums, it can last about as long as the ticket is on your record — which is five years — before you can try to renegotiate the price down again.
Apparently, the insurance companies are taking the legislation to mean whatever they want and are interpreting it to fit their profit margin. Nothing has really changed in Massachusetts or elsewhere across the nation. In fact, the “accident forgiveness” commercial that Allstate created left them with a lawsuit because it ran in states where that wasn’t the case. They admitted they were wrong and pulled the commercial, but whether they owe damages to the consumers who felt cheated is still at issue.
The fact is that if you are going to make a claim on your insurance, you should do so with the knowledge that even the most minor infraction could end up costing you — and costing you for the long haul. So proceed with caution when you get behind the wheel, and think about whether paying out of pocket is a good idea or not when you are in a car accident.