Expert: Doctor Settlement - 5/21/2010

Question
I live in NJ. My daughter is younger than 25 and has been driving for several months.  She scratched a car in a parking lot.  Estimated cost is possibly $2-3,000.  Is this likely to have a direct effect on my rates?  If so, is the percentage/effect likely to be dramatic?

Answer
Hey, Evan,

How 'bout them kids?!!  I have gone thru the same thing—with two of them.  YES, this will surely be counted as an "at-fault" accident for purposes of computing the premiums.  The question can ONLY be in your favor if the amount of the damages paid out is less than the threshold your state insurance commissioner allows for such at-fault accidents to impact rates.  

For example, in Washington, that threshold is $750.  Anything less than that and no increase can be imposed.  But since you mention a much higher figure, I don't suppose the threshold defense will work for you.

Of course the second way to defend against a rate increase, is to pay the damages yourself and never report the accident to your insurer.  But here, ASSUMING that the repair figure is pretty accurate, the sum is too high to justify paying on your own.  The rates will go up, but I have NO IDEA how much.  A good person to ask is your insurance agent.  She will be able to give some idea of how much your company rate increase will be.  

My guesstimate: NO, the increase will not likely be dramatic—the small property damage only accident is not going to trigger a great increase in your rates.  

I trust that my time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.

Best Wishes,

Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com