by Guest » Mon Dec 17, 2012 05:49 pm
I was recently in a minor accident and my insurance company (Progressive) assessed the damage to my car at $1,300 - so they gave me a check for ~$800 to get it fixed. I ended up trading the car in and did not repair it first. They said I could turn the check back into them, changing the amount paid for my car to $0. However, the other driver received $1500 for his car.
My question is - would it be worth turning the $800 back in or not? Is the increase of my premium tied to the amount of money paid out for an accident? My thought is that if I will save less than $800 over the coming years in insurance premiums, it would be better to just keep the money.
Any help would be greatly appreciated!
My question is - would it be worth turning the $800 back in or not? Is the increase of my premium tied to the amount of money paid out for an accident? My thought is that if I will save less than $800 over the coming years in insurance premiums, it would be better to just keep the money.
Any help would be greatly appreciated!
Posted: Mon Dec 17, 2012 11:53 pm Post Subject:
Why would you want to give the money back to the insurance company?
They paid you for the VALUE of the damage to the vehicle less your deductible (makes no difference what the damage was to any other property). You can choose not to make the repairs, you just cannot collect for the same damage twice (from the same or different insurance companies). You sold the vehicle, so the repairs are now someone else's responsibility, which should have been factored into the selling price.
But your insurance premiums are not based on the dollar amount of any prior claims, they are based on your RISK to the insurance company. If the collision is one in a pattern of such incidents, your premiums would surely rise, whether they paid any money to you or not.
RISK in auto insurance is based on multiple factors, including, but not limited to: years of driving experience, age, occupation, credit history (not in all states), driving history (traffic citations, prior at-fault collisions), and number of miles driven annually. The type of vehicle you drive also influences rates for liability, collision, and comprehensive (other-than-collision) coverages.
Posted: Tue Dec 18, 2012 12:28 am Post Subject:
Your company may have a trigger (a certain dollar amount) that made your rate increase but at this point, they already know the amount of the damage. If you returned the check, the exposure is still here. You could always ask for the money back.
I don't think that it would help to return the check. That's a situation that would create a huge conflict of interest (almost sounds unethical) for the insurance company, accepting claim money back to dial back a rate increase. Just take the $800 and do something else.
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