Auto Insurance Claims: Auto Claim, to file or not to file

Question
QUESTION: Hello Justin,

I was involved in a self auto accident yesterday and I'm wondering if I should open a claim or not.  I was backing up in an indoor garage and backed up into a cement column.  There is some bumper damage.  I have a $500 deductible for collision but I don't have the $500 right now.  So my questions are should I open a claim?  If yes, how long do I have to repair the car?  Is this the case where the insurance will just provide me the funds for what the estimate is and then I can just repair whenever I have the funds or do I have a certain amount of time to repair?  I've never been in an accident before so I just don't know how this works.  Thanks.

ANSWER: James, it depends on whether or not you own your vehicle outright, or if you are still paying on it.


If you own it outright, then you can get paid for the estimated damages and do whatever you like with money so long as the policy itself does not dictate that repair must be done, and that would be unusual.  Most auto policies say the company will pay the cost of repair or replacement up to the actual cash value of the vehicle.  

If you are still paying on the vehicle, then you must review your loan contract and see what it says about physical damage insurance claims and your duties.  This is about the best I can do with the information you provided.  I hope it helps!

Information is always free at Petty Details, LLC!  

---------- FOLLOW-UP ----------

QUESTION: Hi Justin,

Thanks for the quickie reply.  I am not the owner of the car.  This is a leased car.  Lease expires in December 2012.  Let me know if you need more info.  Thanks.

James

Answer
In that case, you'll need to consult your lease agreement.  Most lease agreements make you responsible for any damages, so if you don't file a claim, when the lease is up, if the damage remains, your lease company will make the claim for you, and will get paid.  They have a financial interest in the vehicle and are likely to be listed as the actual "loss payee" on your personal auto policy.  

The only way for me to be positive is for me to see both your lease agreement and your personal auto policy.  You should be able to compare the two and figure it out if you will invest a little time in locating and thoroughly reading the contracts. I hope this helps.

JP