Whose Property Damage Liability Insurance Should I Use After an Accident
Were you involved in a car accident and you want to know, should you use your insurance or the other guy’s insurance to pay for your property damage? Check out this short article to find out.
You just got in a car accident and you’re stressed out. Unfortunately, I’ve got a little bit of bad news for you. You’re about to start dealing with an insurance company and that in all likelihood is going to stress you out even more.
The biggest question I get over and over again about dealing with an insurance company is should I use my own insurance to pay for my property damage after an accident? The answer is yes.
Why File a Claim with Your Own Insurance?
There’s a good likelihood that using your own insurance is going to take care of this issue much quicker than if you wait for the third party to pay for your property damage.
Why is that? The third party insurance carrier (insurance for the guy who hit you) needs to investigate the matter. And they have to decide whether they’re going to accept liability or responsibility for the accident.
I’ve seen that take weeks and sometimes months. Whereas if you have collision coverage, you can get your property damage fixed by your own insurance company right away.
It’s also possible that your insurance company is going to pay you more for your property damage if your vehicle is a total loss than the other party’s insurance will. It’s a matter of customer service and also, you may have clauses in your policy that can increase the value of the vehicle like paying for aftermarket parts (especially motorcycles).
Should I Tell My Insurance Company About the Accident?
Another question I get asked that correlates to this question is, should I even tell my insurance company about the accident?
Yes. You should tell your insurance company about the accident. First of all, State Farm and Allstate are going to find out about the accident anyways. They all have access to the same information, but in addition, you are probably contractually required to tell them every time you were involved in an accident.
I’m not saying everybody does this. If it’s a minor fender bender and virtually nothing happened, and you want to pay a couple hundred bucks to get your property damaged fixed, I’ve seen it a thousand times where people don’t tell their insurance company.
But I want you to be aware that chances are you’re contractually obligated to tell your insurance company every time you’re involved in an accident.
Your Insurance Policy Has Other Benefits You Can Use
Another reason to use your own insurance policy is you probably have benefits you can tap into that you may not even know about.
For example, you may have something called med pay or medical payments coverage, that will cover the first 2,500 or $5,000 of your medical bills. That’s a really important benefit you probably have in your auto insurance policy especially if you have a lot of co-pays.
In addition, you want to put your insurer on notice about the accident because you may have to claim uninsured or under-insured motorist coverage. These are a type of insurance that may be in your policy that will protect you in the event that the guy who hits you doesn’t have insurance or has a very small insurance policy.
Will My Rates Go Up If I File a Claim With My Insurance?
A question I get asked often is won’t this cause my rates to go up? Some experts will tell you that the answer is no. But that is not the truth.
No attorney, none of us can tell you what’s going to happen to your insurance rates. I can’t tell you what State Farm or Allstate is going to do.
However, I can tell you generally speaking, what I’ve seen in that is if you’re not responsible for the accident, your rates, generally speaking, don’t go up.
However, you could have had five accidents and that might’ve triggered something on State Farm’s end to cause your policy rates to go up.
So, no one can guarantee anything when it comes to these companies. However, I would argue – don’t worry about it. This is the reason you have insurance in the first place. So that G-d forbid you got in an accident, you’d be insured.
When Should You Not Use Your Own Insurance Policy to Pay for Your Property Damage?
There are a couple of common scenarios. First, if you have a very high deductible. Anytime you use your own insurance, you’re going to have to pay your deductible, whether it’s $500 or $1,000 dollars or more.
So, if you can’t afford your deductible, then the better route is to use the third party’s insurance company to pay for your property damages. Now, I still recommend using your own insurance because if you can afford it, if you can put the $500 deductible on a credit card, it’ll still get your property damage fixed quicker.
And chances are you’re going to get that money back in the future. How? There is no guarantee, but there’s a good chance what’s will happen is that your insurance company is going to ‘subrogate’ against the other insurance company. Meaning, they’re going to seek reimbursement from the other side for the money they put out on your behalf.
So, if your property damage was $2,500 and you had a $500 deductible, they’re going to seek reimbursement from Allstate or whoever the other insurance company is to get that money back.
It may take a little time, but chances are you’ll get your deductible back if you’re not at fault for the accident.
There’s a second scenario when you might want to not use your own insurance to pay for your property damage. In this case, the reality is you can’t use your own insurance to pay for the property damage because you don’t have collision coverage.
There are a lot of States in this country that only require that you have liability insurance. If you don’t have collision coverage, then you’re going to have no choice, but to go after the third party for your damages.
Note, there are some states where each party’s own insurance pays for their damages. I’m not talking about that situation here. So please don’t be misled as to what I’m saying. If you live in one of those States, you need to ask your insurance adjuster about it or your insurance agent about it.
If Your Vehicle is Totaled, Get Estimates from Both Companies
One final tip if your vehicle is totaled, you may want to get estimates from both insurance companies. Let’s say the defendant has Allstate and you have State Farm. If the vehicle is totaled, there’s nothing wrong with getting an estimate of actual cash value of your vehicle from both Allstate and State Farm and see who was offers you the most.
If you were involved in car accident and you’re hesitant to file a claim with your own insurance company, call us at 1-847-305-4105.
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