When you’re involved in a minor motor vehicle accident, one of the first questions to flash through your mind is: should I make a claim with my insurance company?
The answer to this question really runs the gamut, and will depend largely on who you’re asking, what the overall amount of damage is, and what your deductible is. If the accident is truly minor, like, say, a fender bender in a parking lot, most people will suggest navigating this dilemma on your own.
Sometimes, you’ll hear that when it comes to insurance companies, honesty isn’t always the best policy. Being too forthcoming with information, some people believe, could end up working against you. There’s a pervasive view that if you ask your insurance company whether or not you should make a claim, they might penalize you in the form of higher premiums down the road, whether you ended up making a claim or not.
Scared of rising premiums
“We know that people have been afraid to contact their insurers to ask questions about a potential claim, concerned that it will impact their policy regardless of whether they make a claim,” says Gerry Martineau, assistant vice president of national auto claims at The Co-operators.
“Yet that’s the time they need advice the most, someone to come alongside to provide assistance and peace of mind.”
“Most people that get involved in a motor vehicle accident will reach out to a friend and ask [if they should make a claim] versus reaching out to their licenced professional,” says Randy Carroll, CEO of Insurego Brokers Inc. “And I think it’s because they think, ‘well if I call my broker, is it a claim?’"
Can insurers penalize you for inquiring?
Brokers aren’t obligated to report to someone’s insurance company that the customer called in asking about an incident, but there’s nothing stopping them from doing so, either.
“It’s really dependent on the individual broker as to what they do with the next step,” says Carroll.
It’s not so much that you’re going to be reprimanded for asking a question; it’s that you could get into trouble for not reporting the incident, a penalty that could come in the form of either a claim denial or high premiums.
People have been afraid to contact their insurers to ask questions about a potential claim, concerned that it will impact their policy regardless of whether they make a claim
“There’s a system in the background called the accident reporting centre,” explains Carroll. So if you get into an accident with another driver and decide not to make a claim, but the other driver does, and reports it to the accident reporting centre, “both insurance companies will be advised that there was an incident.”
There’s a big difference, too, between scraping the side of your vehicle on your garage door and not telling your insurance company versus rear-ending someone.
It’s especially tricky in situations where two people get into an accident and decide to settle the damage without involving their insurance companies. You can’t really trust that the other person won’t eventually file a claim with their insurance company, even if the damage is paid for out of pocket. So even if you decide against telling your insurance company, it could still come back to haunt you and at that point, your claim would probably be denied, Carroll says.
“The responsibility of the customer is to make sure that the insurance company knows that there is potential loss there,” he says.
Each company is different, however. Some offer what’s called “accident forgiveness” where your first at-fault claim is “free” in the sense that your rates aren’t going to increase as a result.
The Co-operators offers something called a Claims Guarantee, where customers can contact the company regarding an accident, get advice, guidance, and assistance in assessing the amount of damage, and then decide whether or not they want to pursue a claim.
Typically, if it's simply an inquiry without the submission of a proof of loss or involving a third party, it is unlikely it would go on someone’s record
“If our client decides to pay their own claim,” says Martineau, “their premium will not increase and we will not use this information to affect coverage in the future.”
A spokesperson for Aviva said in an email that simply asking hypotheticals isn’t grounds for making changes to someone’s policy.
“If a customer called an Aviva agent and said they’d been in an accident, no matter how minor, we would expect the agent to ask the appropriate questions to determine whether or not the vehicle, property, etc. was impacted,” the spokesperson said.
“If a claim was started as a result of the conversation and questions, the customer could potentially see a change to their policy at renewal time. If a customer just called asking for general or hypothetical advice, they wouldn’t see any changes to their policy or premium.”
Broker is probably your best bet
To avoid any speculation that you might have a claim waiting in the wings, it’s in your best interest to call up your broker with any hypothetical questions or need for advice.
After LowestRates.ca reached out to Intact to find out its take on this question, a spokesperson provided the following response: “Intact is a broker channel, so for us this type of situation is rare,” they said. “We would encourage you to speak to a broker in this instance as there are a variety of factors that could be considered.
“Typically, if it's simply an inquiry without the submission of a proof of loss or involving a third party, it is unlikely it would go on someone’s record.”
Unfortunately, however, there’s no standard process for this situation, and yet it’s one many drivers find themselves in.
“It’s always a tricky conversation,” says Carroll. “As a broker, I have an obligation to the customer, so I’m going to get them the advice they need in regards to what happens if you do not report the claim, and what happens if you do report the claim. And I’m leaving it up to the customer to make that judgment.”