Expert: Richard Hixenbaugh - 2/12/2010

Question
QUESTION: Hi,
My wife and i have spotless driving record. Added 17 yr old teen last summer to our auto. had one accident late summer 2009...rear ended someone..$3500 damage to our car, not sure about other, but ins comp did not surcharge us or him due to our spotless record they said. He had another accident yesterday, slid into a ditch but car rolled over..he is fine...car looks totaled as roof caved...and glass broken. Car is worth $5000-$7000. At this point, we just want teen to go off to college in one piece and so we won't be letting him drive at all and plan to uninsure car and sell it.
Do we file claim, and watch our rates go-up, or do I just walk away from the car and don't file claim.
No plans to ever add teen back on our policy. Will have to get his own.
Thanks

ANSWER: Hi CA,

I can relate. My son totaled 2 vehicles within 3 months. Now he walks.

The decision to file or not to file is up to you. If you file the claim you will be paid the value of the car if totaled or the cost of repair is repairable. Your rates will surely go up this time.

If you have an agent that you would with try calling the agent and ask a "hypothetical" question about what your rates might go to "if" your son were to have a second accident. If you find that your rates would increase by more than the claim is worth, then do not report the claim. Just sell the salvage on your own and remove it from your policy.

I hope this helps
Richard Hixenbaugh

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

QUESTION: Richard,
State Police filed accident report and it will go on his driving record, so it will hurt him to get insurance in future, but, by NOT filing a claim, I am protecting my insurance policy and have no intention of bringing him back on. My motive is to protect my rating and my policy.
Or, no you are saying be black and white: if the claim is worth $5000 and my surcharge would be $1000/yr for 3 years, than make the claim?
Thanks,
CA

Answer
Hi CA,

Yes. I was trying to say take whatever action makes the most financial sense. But, if you are absolutely taking him off your policy but you still make the claim, there may still be an affect on your premium simply because there was a claim made gainst your policy.

That is why I directed you to call your agent to ask some "what if" questions so that you could learn the best answer for you.

I hope this helps
Richard Hixenbaugh