When you should not Submit a Claim to my Car Insurance Company

Auto insurance claims in Canada and the U.S are mostly covered under comprehensive, Collision and Liability coverages. Comprehensive coverage covers losses arising from, among other things, fire, theft, vandalism, and impact from flying objects. These claims generally do not affect your premiums.

A major consideration in deciding whather to report these losses is your deductible. If the cost of these losses is below your deductible then you would have to pay the entire cost of the loss. Frequent comprehensive claims may also result in your insurance company raising your deductible or deleting this coverage upon your policy’s renewal. Each insurance company has underwriting guidelines which govern these issues. You may ask your insurer about the consequence before putting your comprehensive claim through.

Collision coverages cover losses as a result of a collision with anything attached to the earth’s surface. These claims mostly likely affect your premiums depending on the degree of fault attributed to you. It covers single car accidents, hit-and-run claims and collisions between two vehicles.

Hit-and-run claims however, may not result in a premium increase depending on your insurer or your state or province of residence. Collision with animals such as deer is sometime covered under comprehensive coverage. Collision claims also have a deductible which is a portion of the total claims cost which you have to pay yourself. Most insurance regulations require that all losses be reported to your insurer weather they are covered or not. Failure to do so is considered a violation of your policy conditions.

However where no third party is involved failure to report collision claims would most likely have no consequence other than save you money in premium increases. This however is still a violation of your policy conditions. Where there is some other party involved, failure to report claims on time may result in an insurer refusing coverage should an unreported collision lead to future claims such as bodily injury or property damage from third parties. For example A settled a claim with B without informing his insurer. One year later B sues A for bodily injury as a result of the collision. A’s insurer denies the claim because A didn’t report the claim on time and therefore violated his policy conditions and compromised the insurer’s ability to investigate the claim in a timely manner. A is left to cover B’s medical bills which may run in the thousands.

Also to consider is the fact that if a third party reports the claim to his insurer and provides your information to his insurer, your own insurance company would eventually know the details of the claim.