TITLE SHOULD READ:
Cost benefit-analysis: car transmission damaged by bottoming out; better to pay out of pocket or claim against insurance?
Anyone ever been in the situation that:
(a) you’ve been in a normally mild no-fault accident (e.g. going up a curb hard, bottoming out in pot-hole, hitting a pole in a parking lot) that – this time – damaged your car, and
(b) the needed car repair is just out of reach in the financial short term (car won’t run, gotta be fixed), so
(****c) you have to consider claiming it against your insurance?
Facing that now … had a totalled car paid for by our old auto insurance in January 2006. Really don’t want throw another major bill at our current insurance company and either have the rates rise or get dropped. But I’m not sure of the cost-benefit analysis here.
Our options are basically:
(1) borrow two grand from family and friends
(2) claim the repair, or
(3) scrap the car (about $8500 KBB before accident).
Anyone else ever go through something similar? For a $500 repair bill, I’d go out-of-pocket, no problem. But $2000 is too much. to take as a one-time hit. No credit is available, and for this exercise, assume that it cannot be obtained.
I don’t know about the insurance angle. I would suggest call the company and ask outright how the claim would affect your rates.
As far as scrapping it, it’s a pretty sure bet that selling it as is will leave you with less money than fixing it first and then selling a driveable car. Also, in most cases, fixing it and driving it gives you more for your money than selling it (fixed or not) and buying a replacement.
Thanks, Gary. That would seem to be the case … the car is not so old that we couldn’t resonably expect to drive it 5 more years or so.
Giving this one – and only one – shameless bump.
Dude, what is a ‘no fault’ accident in the US? To me all three of those are blatantly the fault of the driver.
I worded it poorly – should have written “one-car accident”. The idea is that no policeman came out and ticketed anyone. But you’re correct in that the insurance company will treat it as the fault of the driver, and run the claim against your Collision insurance (as opposed to Comprehensive insurance, which would cover vandalism and theft).
My insurance company could not and would not tell me what the effect of adding a claim to the insurance would cost in terms of rate icnreases.
However, if you’re a long-time customer with only one or two other claims (even a totalled car) they are unlikely to drop you due to a couple of claims.
My wife totalled her car in a not-at-fault accident (Michigan, No-fault insurance, but they still track who was at fault), and we got copensated for that. A couple years later, I hit a very large pothole first with the front, and then the rear passenger tire. Bent both rims and flattened 2 tires. The insurance company covered the repairs ad my rates did not go up. This was within the last 5 years, so your experience should be similar. Of course, with the economy, who knows…