Should I submit a car insurance claim, or will I regret it?
Someone sideswiped our parked car and left. The damage is minor but would lead to rusting out years early, and would cost $750 to fix. Should I submit a claim to my insurance company, or pay it out of pocket?
According to the insurance company agent, the claims adjuster gets to decide between two options. If he decides it’s a “not at fault” accident, I pay a $250 deductable and they pay the rest, and my rates (including two discounts for having been their customer for 23 years and submitted only a few small claims) stay the same. If he decides it’s an “at fault” accident, I pay a $500 deductable and my rates go up for 5 years adding a total of $1000.
So the three possibilities seem to be:
- I pay $750
- They say “not at fault” and I pay $250
- They say “at fault” and I pay $1500
The agent further tells me that if I submit the claim and the adjuster says “at fault”, I can withdraw my claim, they pay nothing, and my rates stay the same.
I can afford to do any of these, but it seems obvious that I should submit a claim, and withdraw the claim if the adjuster says “at fault”.
But the insurance agent started pressing me on this:
“Well, you should really seriously consider not making the claim, as it is so small.”
“But why? It sounds like I’d save $500 by filling out some forms!”
“Well, yeah, but, look, you’re in your golden years, right?” Geez, I’m 52, so I’m a little baffled where this is going.
“Maybe, but what difference does that make?”
“OK, suppose you win the lottery big tomorrow, and move to a state where this insurance company doesn’t sell insurance, and you have to get a new policy. You’ll have this claim on your record.”
“I dunno. If I win the lottery so big tomorrow I move to some other state, is my insurance rate really going to be a problem anyway? This doesn’t sound like a big risk to me.”
“Well, look, you can do what you want. I’m just trying to explain your options here.”
“Yes, I hear that, but what I don’t understand is why I would choose not to file a claim. I will either save $500, or waste a little time filling out the forms and then withdrawing the claim. I’m not trying to be argumentitive, but if you are telling me there is some other reason, I’m still not getting it.”
“Maybe I’m just not explaining myself well. It’s late on a Friday. Look, if you are sure you want to file a claim, you can do it, just call me Monday morning.”
This is all setting off alarms, but I can’t pin down any sound reason for paying $500 more.
FWIW the body shop, an old and trusted outfit in a nearby small town, says I should have no trouble because my insurance company is one of the ones that reliably pays on claims (unlike Progressive and Geico, he says). He says the only thing they want to be able to say “at fault” for is people with years of dents and dings all over their car who try to say it all happened a couple of days ago. My damage is practically all in one spot, and exposed shiny bare steel that didn’t have any rust yet.
What should be my strategy? What dark and threatening evil am I being blind to?
Disclaimers: I know insurance companies don’t have to be loyal or ethical. And there are no legal questions here, only money saving strategic questions.