Who should fix your car – your insurance or the at-fault insurance?
I am regularly asked whether someone should file a property damage claim through THEIR auto insurance or the AT-FAULT’s auto insurance. Although I shade towards advising my clients to file a claim through their auto insurance, it is important to understand the pros and cons to make an informed decision. This article discusses when you are not the at-fault party and liability is not in dispute.
Basic Insurance Terms
In the State of Florida, all drivers are required to maintain a minimum of $10,000.00 in property damage liability (PDL) insurance. Property damage liability insurance covers the cost of damages to someone else’s property after an accident they cause. If you file a claim through property damage liability insurance, the AT-FAULT auto insurance will pay for the repairs.
Most drivers also carry collision insurance. Collision insurance covers the cost of damages to fix your car.
Collision insurance comes with a deductible, usually ranging from $250.00-$1,000.00. If you file a claim through collision insurance YOUR auto insurance will pay for the repairs.
Pros of going through YOUR auto insurance (Collision)
The two biggest pros of going through YOUR auto insurance after a car crash is:
- Your car should be repaired in a (more) expedited manner.
- Your car will be repaired at the body shop of your choice (i.e. dealership) or, at a minimum, an “approved” body shop depending on the year, make and model of the car.
Once the at-fault insurance company admits liability, it will send payment to your auto insurer to cover the costs of the repairs. If you paid a deductible, the at-fault will refund your deductible. The process is called subrogation.
If you have rental reimbursement on your policy, you can get a rental right away. When you go through your own carrier, they will usually approve a rental for the length of time it takes to repair your vehicle, however the time varies between insurance companies depending on your policy’s benefits. Some carriers only provide a rental for 10 days or pay a portion of the reimbursement.
Remember, auto insurance carriers want to keep its policy holders happy. They have a vested interest in providing you with good service. The at-fault insurance has no such motivation and may cut corners on their choice of body shop.
If you go through your insurance company, you should still call the at-fault company to report the claim. This could speed up the subrogation process.
Cons of going through YOUR auto insurance
The biggest con of going through your auto insurance policy is that you MAY be out your deductible at least until the subrogation process is finalized.
If you do not have rental reimbursement on your policy, the at-fault insurance will likely not pay for a rental car unless you have the car repaired through them.
Your insurance company shouldn’t raise your rates after a claim related to a crash that wasn’t your fault. Unfortunately, insurance companies seem to raise rates/impose a surcharge for any reason under the sun, including accidents where you were not at-fault. Some insurance companies are more egregious in their practice then others.
A study by the Consumer Federation of America (as published in the New York Times in 2017) found that Progressive applied a surcharge to every quote (on drivers who are involved in accidents through no fault of their own) except in cities where their use is prohibited by State Law. GEICO and Farmers sometimes raised their quotes by 10% or more, while Allstate “occasionally” penalized drivers.
Insurance companies argue that they raise rates on a number of factors (including loss history, the amount of the claim paid, # of claims filed, residential zip code, crash zip code, your age, your premium, how many accidents you have been in for the past “X” number of years and the percentage of liability, the type of accident(s), the severity of the accident(s), number of traffic infractions, etc.), and not only whether you were involved in a crash that wasn’t your fault.
I would take what the insurance companies say with “a grain of salt”, however. In their mind, the more accidents you have (regardless of who is at fault) the higher risk you are, period. Higher risk = higher premiums.
Pros of going through the AT-FAULT auto insurance (PDL)
The biggest pro of going through the at-fault’s auto insurance policy (PDL) is that you do not have to pay for your deductible and wait for reimbursement. Reimbursement can take up to 90 days or more.
If you do not have collision insurance, you must file with the at-fault’s insurance.
Assuming liability is established, the at-fault auto insurance should provide you with a rental car. They will not, however, provide a rental for more than 5 days or so for a total loss.
Cons of going through the AT-FAULT auto insurance (PDL)
The biggest con of going through the at-fault’s auto insurance policy is that you are at their mercy on when and where the car is repaired. The at-fault insurance has no motivation to keep you happy and may cut corners on their choice of body shop. Repairs will not begin until liability is established.
… And the winner is?
(Usually) it is recommended to file a claim through your auto insurance carrier.
If you are involved in an auto accident, the accident will be reported to your auto insurance regardless of whether you advise them or not. Your insurance company will run searches on you such as an ISO Claim Search, a CLUE report and/or an MVR on you before it is time for you to renew your policy.
These searches provide prior-loss histories and any reported traffic violations. Also, police incident reports are a matter of public record – the insurance company will find them.
This is why you should contact your auto insurance regardless of which insurance you chose to repair your vehicle; you do not want your insurance to raise your rates for not advising them of a claim.