Out of Pocket Or Insurance? What's The Difference

A lot of people wander into the shop questioning if it’s better to pay out of pocket or to file their claim with insurance. Each situation is different, so our responses will be varied. You can never truly know if it’s best to file a claim unless you know what the cost of repairs will be. The first step in any repair process will be to get an estimate done on your vehicle. This is a great way to know whether you can afford the repair, and another way to see if your rates could potentially rise.

In the state of Minnesota, you have the option to have your vehicle repaired anywhere you wish, regardless of where your insurance may be a ‘Direct Repair Facility.’ That’s just a fancy way of saying that the shop on their list knows all the guidelines the insurance requires for a proper claim and repair. In your case, this doesn’t help with anything but timing. A direct repair facility allows the insurance to process the claim without the need to send out an independent appraiser or adjuster, which means it eliminates the time constraints of another person's schedule.

One of the most frequently asked questions we get is whether or not the claim is going to increase your rates. We can’t predict that for you, and it’s very likely it could increase them, but in the end you’re paying for your insurance month to month in case of accident. Why wouldn’t you use it when you get into an accident? As a party in a no fault state, your rates could potentially rise regardless of who files the claim, as it’s considered a two fault accident. The insurance evaluates this with a number of factors such as; the circumstances of the accident, if you have accident forgiveness on your policy, or your likelihood of getting into another incident.

If you’re in a claimant situation, then it’s likely best to file the claim with the other parties insurance. Being the nice guy and allowing the party to pay out of pocket is beneficial if there’s minor damage, but if the damage is extensive, you’re going to want to fall back on their coverage. An owner pay estimate has no real benefits aside from not letting your insurance know about the accident. Some body shops offer discounts on their labor rates for an owner pay, or discounts on parts, but repairs can be an expensive dent in your wallet.

In the end, the decision is up to you. If you’re more comfortable working with an insurance company, or without one, it’s your prerogative to do so. Our goal is to return your vehicle in pre accident condition, and whether that is through your insurance, or in an out of pocket job, the quality of your repairs will be the same. Let us know if there’s anything else we can do to help put this process behind you.