You would think that making an insurance claim for an automobile accident is a fairly straightforward thing.
These days, with the cost of repair parts rising 20 percent a year, making an insurance claim is becoming an art form.
You've got to know the twists and turns of this highly complicated business.
Did you know, for example, that many policies specify a "threshold" number for claims? If you go over this amount you have to pay a higher premium for the next three years.
Here's how it works:
Let's say you have an insurance policy with a $250 deductible. When damage in an accident is your fault, you have to pay the first $250. The insurance company pays all above that amount.
You have an accident that the insurance company calculates will cost $460 in repairs and an auto body shop agrees to do the work for that price. This means you pay $250 and the insurance company pays $210. But watch out. The insurance company has a $200 "threshold" limit on money paid out. If you go over the limit, and have a clean record up to your accident, you get a half point. This serves as a warning. If you make any future claims within the next three years, no matter how small, you get a full point and your premiums go up.
If you already had a relatively minor accident before, and the insurance company reimbursed you for part of the cost, the new accident could cost you considerable money because it automatically puts you over the threshold.
This is all part of a merit-rating system that insurance companies use. If you're a "good" driver, you get lower premium rates. If you're a "bad" driver (have several accidents), your premiums are hiked. Sometimes, your policy is canceled or not renewed, and then you might have to get high-risk insurance, which really costs a bundle. Make them explain it.
The trick is to keep your claims under the threshold limit if it can prevent a hike in your premium rate. Know your threshold limit. With some companies it's $200, and with others it's $300. Some have a tight lid set at $100. You also have to know your company's claim rules. Some allow you to pay all or part of the repair amount to keep from going over the threshold. You report the accident but don't make a full claim. Others insist on using the damage figure calculated by their damage inspectors.
One woman had an accident with damage that the company inspector figured would cost $511. She had a policy with a deductible of $200. By subtracting the $200 from $511, the company had to pay $311.
The woman was furious because her "threshold" was $300. If the claims inspector had estimated the total damage just $12 below his final figure, the woman would have saved $127 in added premium costs. But, he wouldn't change the figure and the company wouldn't let her pay $12 on the bill.
Very tricky. She should switch to a company that has more flexible threshold rules.
If your insurance company will let you reduce the claim cost to stay under the threshold, you can often save money by specifying used repair parts. This helps keep the price down. One estimate for front-end damage came to $686 for a new bumper (complete with shock-absorbing mechanism) and some finder work. By purchasing a used bumper and shock mechanism, the bill was whittled down to $449. With a $250 deductible, the car owner was able to avoid a premium hike because the insurance company only had to pay out $199 -- $1 under the $200 threshold.
Q. Are the new all-weather tires as good as snow tires? We get a lot of snow, and I don't want to get stuck.
A. According to the National Safety Council's Committee on Winter Driving, the all-season tires are better than regular radial or bias-belted tires on loosely packed snow that's around 4-to-6-inches deep. They're not quite as good as snow tires in this particular type of snow situation.
But how often do you have to face fairly deep, loosely packed snow in a city like yours? On ice or hard-packed snow, all tires are about the same. Snow tires, according to some experts in the Department of Transportation and in the tire industry itself, may become a thing of the past.
Check with your local police departments (city, county, state and adjoining states). Most allow all-season tires in emergency snow situations. Some even allow regular tires (as long as you don't get stuck on an emergency snow route). Tires with "M-S" (for Mud and Snow) imprinted on the side are usually okay with the police. Unless you absolutely need them because you live out in a rural area, snow tires are an abomination. They're costly and inconvenient. You'll find better buys this summer among some of the all-season tires and regular tires.