What you need to know about auto insurance claims

Everyone's budget is being stressed today, but, like death and taxes, auto insurance is an inevitable expense that you've got to squeeze into the budget, sideways if necessary! We all know that auto insurance is high, especially if you're under 25 or single. In both of these cases, some auto insurance actuary has determined that the insurance company's risk is higher than that of insuring a married couple. This does seem discriminatory, but we don't make the rules.

However, the risk of not having insurance on your car is too great. For one thing, if you are stopped for a traffic violation and found to be uninsured, your vehicle can be confiscated and impounded on the spot. You'd then be faced with a ticket and fine, impound fees and coming up with the money for insurance before you can get your car back.

The average auto insurance premium today is about $70 per month. Personally, I haven't had an accident in about 35 years and the last time I got a ticket was over 19 years ago. I think the last auto insurance claim I made was in 1969! Despite this good record, my insurance premium is $68 per month. Doesn't seem fair. Where did I go wrong? I don't drive a fancy sports car. I hate to think what a 24 year old driver who gets in an accident must have to pay to be insured!

Back in the day, the average consumer felt that they should get some bang for their buck when it came to auto insurance. For example, I remember my Great Aunt, who had a thing about driving a car that was no older than a couple of years. If she sustained damage to her car in a parking lot, she immediately filed an auto insurance claim, believing that's what she purchased with her auto insurance policy. She would have the auto insurance claims adjuster out to her house in a heartbeat, to restore her car to its original pristine condition.

If she had a cracked cover on a rear directional light, she initiated an auto insurance claim. When her insurance premium started creeping up, she had not a clue as to why. What she didn't know was that her insurance premium was intended only to cover major damage. Minor dents and parking lot variety damage only constituted a liability for her, in the form of higher insurance premiums.

Before you pick up the phone to make auto insurance claims, you need to weigh whether it's worth filing an auto insurance claim. Auto insurance companies have a very long memory. If your insurance coverage pays for minor damage, you've got to balance this off with the potentially astronomical increase you might realize in your insurance premiums. Sometimes, it's not worth making the auto insurance claim you are entitled to according to your policy. That $30 repair might raise your premium by $5 a month.

Always remember that insurance companies have long memories. The more auto insurance claims you submit, the higher your rate will go. For those minor parking lot encounters, see if you can't do the repairs yourself. Any time you can avoid submitting auto insurance claims, your insurance rates tend to remain stable. If the repairs are simple and relatively inexpensive, you're certainly better off doing the repairs yourself, or hiring a local car body artisan with good references to take care of the blemish.

A penny saved in insurance claims is definitely a penny earned!