When not to file an auto insurance claim

the dilemma: to file or not to file?

When not to file an auto insurance claim comes up often and in many occasions, the best person to answer it is your agent. However, you must truly believe that your agent is out there to protect your interest and his or hers. Insurance agents make money by selling you an insurance policy. However, they make even more money (in bonuses at the end of the year) by selling policies to people that will not make insurance claims.

They call that a loss ratio. Depending in the agent�s loss ratio, the bonus or their payment from the insurance company will increase or decrease. The loss ratio is also affected by how big of a loss you have �the bigger the loss, the more money your agent losses�.

The idea behind this structure of payment is that the agent will not sell policies to people that are high risk, saving money to the insurance company. The agent is supposed to inspect driving records, and to inspect each individual vehicle to make sure those cars are �safe� to drive. The agent is supposed to asses risk before selling the property.

However, this same structure discourages agents to their job. The agent has a duty to protect your interest by advising you what to do with your claim and protecting your interest; however, the potential decrease in their payment will be completely discourage that.

So when asking the question when not to file an auto insurance claim to your agent, remember that they have a vested interest in declining to file a claim, so they will probably suggest to you not to do it. A honest agent will truly put your interest first and tell you when not to file an auto insurance claim.

You are probably asking when not to file an auto insurance claim because you want to know how a claim can affect your rates and premiums. So we will discuss the possibilities and try to explore a general sense since every insurance company has a different approach.

Insurance companies have underwriting departments. The underwriters are responsible for writing policies and for evaluating risk. If the claim adjuster believes that there are issues to be reported, then the underwriter will get a report. The claim adjuster has incredible power, they decide if there is coverage, who is at fault, how much your pain is worth, when to settle a claim; however they don�t have the power to cancel your policy or to not renew it. They can make suggestion however. In fact, the claim adjuster has little to do with your rates. It is the claim in itself that can cause you trouble and increase your rates.

Remember that an insurance policy is a product. You want to use products when you need them. Insurance companies want to discourage that thinking. They cannot increase your rates because you file a claim, however, that does not mean that insurance companies will peach it different ways to increase your rates. Also remember that insurance companies are a business, a competitive one. They do not want you to go somewhere else, so they necessarily want to jack up the price pay enough but stay with them.

To be able to answer the questions When not to file an auto insurance claim we must first look at coverage and/or deductibles.

Type of claims and circumstances you should consider before deciding when not to file an auto insurance claim:

� Doing business in your personal car (companies want you to buy a commercial policy).

� Delivery Routs (deliver the paper and/or Pizza) Increased exposure of liability.

� Alcohol or Drug Related Claims

� Citations (getting a ticket because of the accident)

� Not wearing a set belt

� Racing or accidents in a race track (this one could actually exclude coverage all together)

� Several Claims in short period of time (i.e. three claims in six months)

� Being completely unreasonable when dealing with a claim adjuster (never answering letter or phone calls)

� Aggravating the claim (getting out of the car and getting in a fight with the other driver)

� Intentional Damage (ramming someone to make your point).

� Road Rage

� Lending your car to someone else to drive

Note that the categories above really reflect those situations where the insurance company learns that the risk of insuring someone is higher than they believed at first. Some of the factors above can only exclude coverage IF AND ONLY IF it isexpressly written in the policy. However, thy can adjust your premium when any of this happens.

With the above information said consider reading when not to file an auto insurance claim when there is only one vehicle involved in the incident or

When there are two ore more vehicles or parties involved in the claim.

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