Posted by Frugal on 6th July 2009
I had a perfect accident-free driving record for the last twenty years until this weekend. Coming back home from vacation during the July 4th long weekend, I hit the bumper of the car in front at a speed of less than 2 miles per hour. Why? Thanks to all the new distractions provided by modern technology, I was looking at my GPS navigator, instead of the traffics.
Because the collision was so minor with barely visible mark on his bumper, I was going to settle with him with some small amount of cash. But this guy apparently wants to scam me for a lot more, by claiming that his bumper is tilting now due to collision (yeah right, tilting by 0.0001 inch). We exchanged insurance information like usual. At the end, he asked me for my personal phone number, possibly wanting to settle with me later. Because of his bogus claim, I was afraid to deal with him personally. I asked him to call my insurance company directly.
My reason for wanting to settling outside of my insurance initially was that I didn’t want to have my insurance premium increase. However, after calling up my insurance company (now GEICO which matched and beat Ameriprise through Costco), I found out that actually for any paid-out claims less than $750, there won’t be any change in my current $730 annual premium. I also checked some online quotes from Ameriprise, and an incident of claim less than $1000 didn’t change my insurance rate ($900) either.
I guess that the premium increase will probably be different for each individual. But without this incident, I would never find out that actually there is some “allowance of minor incidences” in the insuring industry. I still remember my brother’s car incident caused the insurance annual premium increase by about $1000, which last for several years. However, that was during his adolescence years, and it was more than 10 years ago. Insurance companies are more competitive now.
I have always paid my car insurance, thinking it’s money thrown away. And I actually settled a similar collision once to maintain my “perfect driving record”. I guess the correct way of using my insurance should have been always letting insurance company do their job.