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Your car was hit: You have 4 options

Whether your car was barely scratched or badly damaged, you have some decisions ahead.

By MSN Money Partner Jun 26, 2013 5:56PM
This post comes from Penny Gusner at partner site CarInsurance.com.

carinsurance logoQuestion: After my vehicle is damaged by another vehicle, whether on the roadway or when parked, what are my options to get it fixed?  Do you have to make a claim?  Can you let the other person pay for it or use their insurance? How do I know what the best choice is?

Businessman talking on his cell phone by a car accident © Stewart Cohen, Blend Images, Getty ImagesAnswer: If your vehicle is damaged by another driver, you do indeed have choices about what method you’ll use to get your car repaired.  The basic options are:
  • Make a claim against the at-fault party’s insurance liability coverages.
  • Make a collision claim against your own car insurance policy.
  • Make an agreement for the other party to pay personally for the damages they caused.
  • You pay for damages or don’t repair your vehicle.
As you can see, you don’t have to make a claim, but most car owners find the best choice is to file a claim with the at-fault party’s insurer because it’s more likely the car will be fixed quickly -- and with no expense to the car owner who wasn’t at fault.

Their insurer pays
If you can identify the person who damaged the vehicle, meaning it wasn’t a hit-and-run or miss-and-run, then why not have that individual (or their insurance) pay for the damages? 

States require drivers to carry car insurance, or another form of alternative financial responsibility, so that the victim of an auto accident isn’t stuck with the cost of getting a damaged car repaired.

By going through the at-fault party’s insurance, specifically their property damage liability coverage, for damages to your vehicle you should be offered a rental car (paid for by the at-fault party’s insurer) while your vehicle is being fixed. Also, you should be able to hand them the bills for any towing and storage fees that may have accrued after the accident. 

Your insurer pays
Some people prefer to use their own auto insurance provider for claims that aren’t their fault because they feel more comfortable working with their own insurer. If you have a liability-only policy, then you wouldn’t be able to make a claim; you need to have collision coverage. 

However, there are a few drawbacks to filing a first-party claim through your own collision coverage.  One is that unless you have rental car reimbursement coverage as part of your auto insurance policy, your insurance company won’t pay for your use of a rental vehicle while your vehicle is in the shop.

A second downside is that your deductible will be due.  Using the other party’s liability insurance comes without a deductible due by anyone.  

Also, if you claim against your own car insurance policy it will go on your claims report.  And while this not-at-fault accident and claim may not affect your rates (state and insurer guidelines vary), if you have too many claims within a certain period of time your insurer is likely to raise your rates or decline to renew your policy.
The at-fault driver pays

This is more of a worst-case scenario because you have to trust that the at-fault party will pay for the repair costs -- and I’ve seen that promise go awry many times.  This is why if the person has insurance, I’d advise you to put a claim in instead of working with the person to pay. 

If the at-fault party is uninsured and you don’t have collision coverage, then you don’t have much choice but to deal directly with the at-fault party and request that the driver pay for the cost of your vehicle’s repairs.

You may have to accept a payment plan if that is all the driver can afford.  Or, if he or she is uncooperative and won’t pay, you may have to take legal action to try and recoup the expenses you incurred due to the accident.

Pay for damages on your own or don’t repair it at all
There are situations that may result in you deciding just to pay for the damage yourself or that it’s too minor to bother with repairing.

For example, if a friend or relative causes minor damage to your car and you don’t want to make a claim or make them pay for repairs, you may end up paying yourself.
Or if the person who damaged your car is unknown and either you don’t have collision or repair costs are below your deductible amount, you’d normally have to pay for repairs yourself -- or if it’s just a small scratch decide to live with it.

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