By Sarah Mills, ninemsn Money
The downside of driving is the possibility of crashing and in turn, the decision about whether or not to lodge an insurance claim.
Statistics drawn from the AAMI Crash Index series show that the average Australian driver is involved in a motor vehicle crash nearly every seven years.
Yet another 75 percent of drivers have had their car damaged while parked and one in six drivers confesses that they won't leave their details should they hit your car when you aren't there.
These statistics don't even begin to account for those little (ahem) scrapes on car park concrete pillars and the like those slight, embarrassing lapses in judgment that most people prefer to forget.
Whenever this happens, the driver must decide whether or not to claim insurance. Nobody wants to lose their no-claim bonus, which can add several hundred or even thousands of dollars to the annual premium, depending on the vehicle. Plus there's the excess. Most excesses range in the area of $400 to $500 depending on your age and driving record.
Most people will ignore the minor scrape incurred in the car park and hope that when their one-in seven-years crash rolls around, it will hit the same spot. However, for the more serious incident, a decision has to be made at some stage: to claim or not to claim.
To claim or not to claim
In the end, it boils down to the mathematics. If the car is not roadworthy, it must be fixed. A brief glance at the damage will give you an idea of whether to pay for it out of your own pocket or whether to make a claim.
On average, if the damage bill is greater than $1000 and you have a good driving record, it's usually an insurance job. If you are unsure, get a quote from a repairer. Clearly, if your no-claim bonus and excess exceeds this amount and it was a single-party accident, you may prefer to wear the cost.
You don't necessarily have to pay an excess in all instances. You will need to contribute if you are at-fault or cannot provide the name, address and registration of the responsible party, so always have a pen and paper at hand in the car just in case. It is also worthwhile getting the names and addresses of witnesses.
How to make a claim
Making a claim is simple and entails a quick call to your insurer. Have your policy number and details of the accident on hand, including contact details for any other drivers and cars involved.
An assessor will be appointed to your case and you will be given a claim number to quote if you need more information. The assessor will look at police reports, examine the car and that of the other person involved in the accident.
Consultants will help direct you to a suitable and conveniently located repairer, one usually affiliated with the insurer, although you are entitled to use your own repairer. They will arrange for collection of the car if it is isn't able to be driven or you can drive it to the repairer yourself. They can also organise a quote and often offer a fast-track glass claims service.
If it is a large claim and the car needs to be written off, the assessor will call you and discuss the replacement cost.
Afraid to make a claim
A lot of people are afraid to make a claim, particularly if they are at fault, thinking the insurance company won't pay. Don't be. Most comprehensive car insurance covers at-fault accidents and Australian insurers are generally excellent at paying claims.
The only time a claim would be in jeopardy is if the driver was in breach of the law at the time or hadn't been honest with the insurer during the initial assessment. For example, when you apply for insurance, the insurer will ask you to provide many details. They will ask about your driving record, whether the car has been modified and whether it is used for business or private use.
This information allows the insurer to determine your risk profile and premium, so it is important to be completely upfront as your insurer may have grounds for refusing your claim if you have been careless with the truth.
The same applies to renewals. Each year you must advise your insurer of any change in your circumstances, such as change of address or traffic infringements.
Occasionally, if the insurer suspects foul play, they may appoint an investigator to the case, but so long as the claim is proved genuine they will pay promptly.
In the US and Europe, there have been many publicised instances of insurance companies trying to intimidate policy holders out of making legitimate claims but to date, this does not seem to be the case in Australia.
Will my premiums be raised?
Some people also fear a claim will mean higher premiums. Car insurance is one thing most people should have and failing to claim defeats the purpose. As most people are involved in a car crash at least once in seven years, as long as you do not stand out as an extremely high risk, an insurance premium rise is unlikely.
If you have had more than two at-fault accidents in two years valued at more than $1000, you may be a candidate for a premium rise, however, this will depend on your tenure with your insurer and how many years you have been claim-free.
Will my insurance be cancelled?
Others are scared that their coverage will be cancelled altogether. Again, this would only happen in the case of an excessive number of accidents or illegal behaviour.
There are more than dollar considerations to factor in when deciding whether to claim or not to claim. Personal injuries such as whiplash, for example, may not emerge immediately and if you haven't lodged a claim straightaway, you may not be covered. If you think you would rather not claim, you may call your insurance agent and check out your options in this regard. If the other side is at fault and the damage is significant, it is best to let your insurer know immediately, particularly if the other party is uninsured. Insurance companies also urge individuals not to make any admissions of guilt and advise against trying to settle any claim made against you.
If you have a dispute with an insurance company, the first step is to try their internal dispute resolution process. If this fails, you can contact the insurance ombudsman, who is the independent arbitrator for the industry.
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