Imagine you are backing out of a parking spot at your local grocery store and accidentally hit a vehicle behind you. The accident leaves a small dent or scratch on the other person’s car, but your car looks fine. The question you face if you are involved in a minor accident is whether you should try to resolve this incident privately by covering the damage to the other vehicle out of pocket, or should you report the incident to your insurance company.
In 2019, which is the last year for data, there were 6.7 million car accidents that were reported to the police, according to NHTSA data. A whopping 4.8 million of these accidents, or about 72% of them, were classified as property damage, meaning there were no injuries or fatalities. in other words, fender-benders.
Covering the cost of an accident out of pocket means keeping your insurance company in the dark, which should prevent increased rates. however, it also means you may be in trouble if additional (more expensive) damage is discovered or an injury surfaces a few days after the accident.
How you handle a small accident (paying out of pocket or filing a claim) will depend on a variety of factors including the amount of damage, your ability to cover the cost of the damage, and your comfort with the risk of the injury. Victim returns with an injury.
how to settle without insurance
If you’re ever in a car accident and are considering not filing an insurance claim, here are some important things to do when settling a car accident without insurance.
- document the accident and all agreements made: take pictures of both vehicles and the place where the accident occurred. do not make verbal agreements. Draft a car accident settlement agreement form that all parties sign and get a copy of. get everything in writing.
- record the data of the other vehicle and its driver: document the license plate number, make, model and color of the other vehicle. Write down the full name and contact information of the other driver and their insurance information.
- Get a police report in accidents where the other driver is at fault: Even if your state doesn’t require a police report, it’s still a good idea to get one. This report will be an official documentation of the vehicles and people involved, any injuries, damage, and what supposedly happened to cause the accident.
- Get multiple quotes for vehicle repairs: Getting multiple quotes for garages/body shops for damaged vehicle repairs will help ensure you get the best deal.
what to do in a minor no damage car accident
Instead of filing a claim, drivers sometimes agree to settle the matter between themselves. The reason, of course, is to prevent a claim from destroying the at-fault driver’s auto insurance rates for years to come.
This route can be full of pitfalls, but if done right, it turns an expensive hassle into a less expensive hassle.
when not to file a car insurance claim
While there are many reasons not to involve their insurer in an accident, many drivers keep their mouths shut in hopes of avoiding a premium increase.
what will a claim do to your premium? hard to say. the rate increase will vary by insurer and state.
drivers in minnesota, california, louisiana, and michigan receive the highest raises for an at-fault accident, while those in new york, hawaii, South Carolina and Alaska have the lowest levels, compared to the rest of the country, according to a 2020 rate analysis by insurance.com.
How much more you pay for coverage after an accident depends on your insurance company’s guidelines and the laws of your state. Many other factors also come into play, including the type of car you drive, your age, where you live, and your credit history. With that said, below are statistics from a 2020 report by insurance.com on the national average increases for common accidents for a full coverage policy. that table is based on data provided by quadrant information services.
how an accident affects car insurance rates
OK, some insurance companies may not raise your rates at all, but most will.
Multiple claims in a short period of time are a big red flag for insurers. “Multiple claims on your record will signal to an insurer that you are not prudent or simply inept behind the wheel. This can lead to a large rate increase or, more likely, non-renewal,” says insurance expert kristofer kirchen.
even one inquiry can affect your rates.
A typical claim inquiry or even a simple call to your agent or insurance company regarding an accident can end up on your claims history, even if you don’t end up filing a claim, Kirchen says. If your claim record shows one accident but three inquiries related to an accident or claim in the last three years, insurance companies may consider you a risky driver, which could result in a rate increase or cancellation, says Kirchen. /p>
In almost all cases, the rate increase will remain in place for at least three years.
how to fix your car after an accident without insurance
A traffic accident is a two-person affair, so you both need to be on the same page before proceeding. if the other person wants their insurer to get involved, chances are yours will be notified at some point in the process, at which point you’re probably better off saying, “Okay, let’s talk to our insurers. ”
Sure, you can suggest against it, but if the other driver is determined to file a claim, that’s their right. but there’s nothing wrong with him that he doesn’t want to tell the insurer about it. you’re not doing anything wrong by keeping your mouth shut.
or more specifically: reporting an accident to your insurer is not a legal requirement, says brian rauber of rauber insurance agency in gladstone, missouri. “Policy holders are not legally required to report all accidents to their insurer. It is common for drivers involved in minor accidents to settle among themselves,” she says.
Any accident you choose to settle outside of the insurance system should be simple.
That assumes you have the money to fix someone else’s car if they remember it was your fault. making promises to pay that you can’t keep is a recipe for a future insurance claim or court date.
Another thing to consider: If it was the other motorist’s fault, do you think they’ll really pay for your crash? “Sadly, most Americans don’t have personal savings to cover a major unexpected expense,” says Justin Wolfe, owner of the Wolfe Law Group in Atlanta. “If he makes a handshake deal to fix any vehicle damage or pay doctor bills, he should know that the person he is dealing with may not be penniless. there’s no way to know someone’s financial status at the scene of a car accident,” says wolfe.
If you have a feeling that the person you were involved in an accident with may be having difficulty paying for your minor damages, then you may want to resolve this and file a claim with your insurer.
the benefits and risks of settling an accident without car insurance
These are some of the possible benefits and risks to consider when deciding whether or not to file a claim for a recent car accident:
- there is no increase in the insurance premium
- no claim process
- no restrictions on repair shops
- if the other driver is at fault, you risk your damages not being covered
- if you are at fault and the other driver then sues for damages such as medical bills, repairs, or pain and suffering
- name, address, and phone number of the other driver
- driver’s license number: consider taking a photo with your phone
- other driver’s name, phone number and insurance policy number, just in case
avoid the pitfalls
Once you’ve agreed to a private settlement, what do you do next? document.
“document, document, document,” says Kirchen. “The proof is in the documentation. If something goes wrong, you still have some recourse. Ultimately, in court, the person with the proof will win if the other party has only hearsay.”
take photos of both vehicles before moving them, as well as close-ups of the damage to both cars.
You may want to give up the photos if you are at fault. Thomas Simeone with Simeone & Miller in Washington, D.C., says, “Take pictures of the vehicles and the accident scene if they can help you. If they don’t, don’t create evidence that can be used against you.”
Now you can also call the police. a police report is the final documentation if it ends up in court. In most cases, the police will determine fault based on their investigation of the accident scene. At a minimum, the police should provide you with a driver information exchange form.
But sometimes, if there was no serious damage and no one was hurt, you’ll find that the police won’t come. it depends on the policy of the police department and probably how busy they are that day. that can also be a decent sign that you may want to handle the accident without involving the insurers. so if you have a “no accident no police report” or “minor collision no police report” mentality, your instincts are probably correct.
After all, if the police think your car accident isn’t worth reporting, it may be something you need to work out with the other driver.
Now, if the police do finally arrive, don’t worry they may notify your insurer. “There’s not much chance your insurer will find out about the accident. Police reports are only distributed to insurance companies upon request,” says Rauber.
again, simeone looks at the other side of the equation. “If you were at fault, don’t try to get a police report; it will only provide documentation against you.”
Your state may require an accident report for accidents above a certain threshold.
Kirchen suggests that the at-fault driver sign an agreement admitting liability and promising to pay.
No matter what happens, make sure you have the following information before you leave the scene:
fix your car
Coming to an agreement at the scene of the accident is only half the battle.
please allow a bit of back and forth before reaching a final resolution. it is important to set a deadline; the longer it goes on, the more complicated a claim will be if you have to go to the other driver’s insurer. If an agreement cannot be reached, or if you lose confidence in the other person’s ability to cover the damage, file a claim with the driver’s insurance company immediately.
To start, Kirchen recommends getting three quotes. “It’s quite possible that the estimates are higher than either party expected. Unseen damage can often be costly,” she warns.
If the estimate is too high, it may be time to get the insurance companies involved. again, it’s not illegal or wrong to try to figure things out on your own, so no one will hold it against you that you first explored how to fix your car after an accident without involving insurance companies.
The range of acceptable settlements is wide and will be unique to your particular situation and accident, but the innocent party can reasonably expect a rental car for lengthy repairs, the use of original equipment manufacturer (OEM) parts, and the right to choose the repair shop.
leaving a car accident behind
When the car is ready to hit the road again, there should be some final paperwork, especially if you were at fault. the at-fault party will want to make sure the repairs put an end to the incident.
kirchen recommends that the other party sign a release of claims, more informally known as a car accident out-of-pocket payment form.
“This ensures that the other party can’t tell you again that they want to be paid for the decrease in value or that they suddenly have injuries,” he advises.
simeone, once again, looks at the other side of the coin. “If you are the injured one and receive money, try to avoid signing a release, so that you have the right to seek more money at a later date, if necessary.”
Still, if you’re injured, you should probably call your insurer instead of putting this experience in the “when not to file an auto insurance claim” bucket. after all, there is a reason we pay for insurance. it’s there to ease our financial suffering in the event of an accident, and even car accidents can be quite costly.
so you really don’t want to have a knee jerk reaction at all. There are times when you definitely want to research how to fix your car after an accident without insurance. There are also certain times when your insurer needs to take the wheel and guide you through the headaches of repairing a car. either way, do what seems to make sense and don’t let fear guide you. Even when leaving your car after a fender bender, make sure you stay in the driver’s seat.