Car insurance claim submission strategy

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:

  1. I pay $750
  2. They say “not at fault” and I pay $250
  3. 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.


What the heck kind of insurance agent do you have? Can you change agents while keeping the same Ins. Co.? That’s what I’d recommend.

Anyway, when my car got hit when legally parked (two different times, two different states*), my rates never went up. Actually, since it wasn’t my fault, there was no deductible either.

  • MI (No fault) and CA (don’t remember).

I think I have the kind that would otherwise be working at a fast food place.

“Do you want fries or onion rings with that?”
“Onion rings.”
“Hey, are you really sure about that?”
“I thought I was. Why?”
“Well, it’s fine, we just want you to sign this waiver if you want onion rings.”
“What? Why??”
“No reason. Look, do you want the rings, or not?”

AFAIK agents are there to provide a layer of insulation between consumers and suppliers, a sort of an older model like car companies use. Not like, say banks and online traders. I’m not sure why the insurance company wants them in the middle, obviously consuming some of the money stream, but I don’t see why I would EVER want an agent. Until yesterday, this guy was the perfect agent, as I had never had any contact with him in my life (I’m pretty sure he was at most a toddler when I bought the policy in the first place).

It sounds like he’s trying (poorly) to tell you that having a record of having made a claim can be a negative, even if it’s determined to be a not-at-fault claim. You might want to find out if this is only a negative if you switch insurance companies, and how long this negative sticks around.

Insurance agents as a rule don’t know jack #$it about claims processing. File the claim, that’s what insurance is for.

What kind of evil tricks do I have to watch for? For example, credit card companies do things like bump your rate if you are late paying a bill to somebody else, which is a surprise to many consumers who have no recourse after the fact. Are there any terrible tricks like that which they might pull?

Does the agent have some incentive to prevent me filing the claim? For example, do they get bonuses for months with no claims filed, anything like that? I almost asked, but thought I wouldn’t get a straight answer even if it were so, and would just further tarnish the whole arrangement.

I’ve been a claims adjuster for 15 years and never heard of this kind of policy. But then it’s been a while since I handled personal auto claims.

I’d make the claim. But I have few other observations

First this guy is far to worried about his contingency check. Many insurance companies pay their agents a bonus based on how many claims their insureds turn in. The fewer the better.

Second this sounds like bullshit or really bad coverage. You have different levels of deductibles for at fault and not at fault collisions? Last time I checked fault was determined by a jury. Since this won’t be litigated who determines fault?

Try to determine your coverage on your own. Check your declarations page (in industry speak “the dec page”). If you can’t find it have the agent fax it to you. It must clearly state your policy coverages, limits and deductibles.

I’m thinking your policy has different deductibles for collision (when you hit something or something hits you) and comprehensive (anything other than a collision like theft or vandalism) and your agent has these confused. If your agent can’t sort out these two most basic coverage matters, get a new agent. If your policy exposes you to a higher deductible for an at fault accident and increased premiums, get a new insurance company.

Jimsom Jim, thanks for the post, but unfortunately I made my selection this morning before reading you. Fortunately, I didn’t do anything wrong relative to your suggestions.

I made the claim. The adjuster spoke with me for maybe a minute, told me this was a “not at fault” incident, said I’d have a $250 deductable and no rate increase, and said they relied on the repair shop to determine fault. AFAIK what they were doing was looking out for the dents and dings collection that a dishonest customer might try to claim was all one accident.

The deductable doesn’t seem very important to me. I think insurance should be for what a person can’t handle as an unexpected but necessary expense, and the deductable should be weeding out the things a person can handle. So I think it would be better if my deductable was $1000 or $2000 or so. This would make the policy cheaper. That being said, since I had to buy a policy they offered for sale, and they didn’t offer higher deductables, I am paying for coverage all the way down to $250, and it would be irresponsible not to collect the coverage I had to buy.

Now, as far as rate increases - isn’t it very typical for rates to go up after you’ve had an accident that was your own fault?

The “contingency check” you refer to would explain why he was trying so hard to prevent me from filing. I can only conclude that he went a bit too far in trying to worry me. It sounds crooked, at least so far. What would be a plausible scenario where the contingency check would accomplish something other than getting an agent to talk customers out of collecting the product they’ve already paid for?

Thanks for all this!

How the hell could it ever be your fault when someone sideswipes your parked car when you’re not even there? Unless you were parked illegally, I suppose, but I would think that would have been mentioned in the OP.

It’s supposed to motivate them to sign up people unlikely to make claims, not to try to talk people out of making claims later.

Wow crappy policy IMHO. I’d be very suspicious of any company that relies on a body shop to determine fault. What the hell do they know.

I still say go to an independent insurance agent, one who sells for more than just one company. Have them quote you a new policy. I get the feeling you’re insured with one of the big guys. They market through captive agents which means they only sell coverage for one company. Who knows maybe your getting the best coverage you can but I wouldn’t buy it.

As to the contingency checks they are supposed to encourage agents to be selective in the people they sell policies to. In agencies where they can put more accident prone drivers into policies that suit them that works well. High risk drivers go with carriers willing to take higher risk. Lower risk drivers go with more main line companies that issue the nice fat checks when people don’t have accidents. When you have a captive agent it doesn’t work as well. They will sell to anyone that fits the underwriting guidelines. Some times the less reputable or less experience agents push people to not make claims. Agents have gotten in trouble with state regulating agencies for this.

If you’re military, ex-military, or from a military family for Heavens sake get USAA insurance. You don’t bother with submitting a claim to an agent - just call up their main number and go from there. I’ve never run into any hassle whatsoever.