As car insurance premiums continue to soar, drivers are finding alternative ways to manage their expenses. With rates expected to rise by at least 20% in 2024, many are opting to bypass the claims process altogether and pay for repairs out of pocket.
Understanding the Shift: Why Drivers Are Avoiding Claims
A recent survey by LendingTree reveals that about 40% of drivers are choosing to skip the traditional claims process, opting instead to handle minor repairs in cash. This trend is largely driven by the fear of increased premiums and hefty deductibles, which can range from $500 to $1000 or more.
Expert Insights: When Paying Cash Makes Sense
Rob Bhatt, an auto insurance expert from LendingTree, suggests that for small claims, such as minor damage or fender benders, it’s often more economical to pay for repairs yourself. “If you ding your own car, you’re generally better off just paying for the repairs yourself unless it’s more than a couple thousand dollars,” Bhatt advises. This approach not only avoids the risk of premium hikes, which can increase by 20% to 50% after a claim but also simplifies the process when fault is clear and both parties can reach an agreement.
Practical Tips for Lowering Your Insurance Costs
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Raising Your Deductible: Bhatt recommends increasing your deductible to $1000 or even $1500. By doing so, you can significantly lower your monthly, semi-annual, or annual insurance costs. “Most people aren’t going to file a claim for something that’s $600 or $700 if they can avoid it,” he explains.
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Getting Repair Estimates: Before deciding to pay for repairs out of pocket, take your vehicle to a repair shop for an estimate. This will help you make an informed decision about whether to involve your insurance company.
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Inquiring About Claims, Not Opening Them: If you’re considering making a claim, Bhatt suggests contacting your insurance company to “inquire” about a claim rather than immediately opening one. This gives you the flexibility to explore your options without committing to a course of action that might affect your premium.
Debunking the Myth: Parking Lot Accidents Aren’t Always 50/50
A common misconception is that parking lot accidents automatically result in a 50/50 fault split between drivers. However, in California, fault is determined based on the specific circumstances of each incident, just as it is with any other type of accident. Insurance companies apply a method known as comparative negligence to assess the percentage of fault for each driver involved, taking into account their actions during the mishap.
Factors Influencing Fault in Parking Lot Accidents
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Right-of-Way: Typically, drivers who are in the established flow of traffic have the right-of-way over those emerging from parking spaces or feeder lanes. This can significantly impact the determination of fault.
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Feeder Lanes: These lanes, usually found at the entrances or exits of parking lots, may have distinct rules compared to other sections of the lot, affecting how fault is assessed.
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Backing Out: If two drivers are simultaneously reversing from opposite parking spots and collide, they may both hold a share of the blame.
As car insurance costs continue to climb, drivers must weigh their options carefully. By considering these strategies, they can better manage their expenses and avoid unnecessary increases in their insurance premiums.