a fender crash can leave you upset at its inconvenience, but ultimately unscathed. if you accidentally rear-ended someone with just a little touch, or had a collision that left one or both vehicles with just a little dent or scrape, is it really worth going to your insurance company, or is it just easier to get to a agreement? claim on your own?
sometimes you can settle a car accident without insurance. but should you?
The answer is not always clear.
We’ll take a look at what you should do if you’re thinking of settling without insurance, and what the risks and benefits might be.
when to consider going uninsured
Only consider a private settlement if the accident is minor. Unfortunately, sometimes what appears to be “minor” is actually more serious than you think. what looks like a dent in a bumper could imply damage underneath that is only visible once the mechanic performs an inspection.
Probably the most important part of dealing with a car accident privately is that both parties must agree. If the other driver feels more comfortable making an insurance claim, he should also be sure to tell his insurance company. the other driver has the right to handle it that way if that’s his preference, but if it really is something small like a broken taillight, maybe you can convince him that a straight payment will be easier on everyone.
You can tell your insurance company that the collision occurred without filing a claim. some insurance companies require it. if you don’t report it and the other driver eventually files a claim, it could get more complicated for you.
however, this factor is important:
Some insurance companies keep records of inquiries and reports, and this could affect your insurance premium rate even if you never file a claim.
how to settle without insurance
If you intend to settle without insurance, here are 5 steps you need to take to protect yourself in the process:
- always exchange contact information with other drivers. do not exchange cash or personal checks at the scene of the accident. instead, get the person’s name, phone number, address, driver’s license number, and license plate number. Also, take note of the make, model, and color of the car in question. You also want to get the other driver’s insurance information, just in case.
- get a record of the damage. take photos of the damage to both cars. take pictures from all angles and of any signs, signals, or road conditions that could have been a factor in the crash. if you can’t take pictures, write notes detailing the damage: where it is on the cars (eg front passenger door, rear bumper, etc.) and what it looks like.
- obtain a police report. Some states require a police report if there is any property damage. other states only require one if the property damage exceeds a certain amount of money or if there are physical injuries. If your state doesn’t require a police report, it’s a good idea to get one if you can. it may not be possible, because the police might not respond for a very minor accident with no injuries. if they don’t, it’s out of their control, but it’s helpful if they do and worth a phone call.
- get quotes from more than one mechanic for damage. Whether the damage is to your car or the other driver’s, insist on getting at least 2-3 estimates from mechanics on the cost of repairs. you may find out it’s more expensive than you expected and could affect your decision whether or not to buy insurance.
- keep a documentary record. It is important to keep a record of all correspondence with the other driver, whether it be receipts or payments of money, or conversations. if you send any documents or money, make sure to transfer it so there is proof that it was received. mail return receipt requested checks, or keep an electronic record if you’re making a bank-to-bank transfer. if you’re negotiating costs, it’s best to have email conversations so you have a record of what was said. phone calls do not keep records of the content, only the fact that the call was made. the more you can document and test, the better.
- Draw up a legally binding agreement when you reach an agreement. There are 3 basic elements in contract law: a. offer b. acceptance c. consideration (i.e. money)
This is the bet you make when you agree to settle with no insurance:
Your insurance company will likely require an accident report to be filed within a short period of time. Those time periods vary by company, but could be as little as a day or two. Remember, making a report is not the same as filing a claim.
You could decide to settle without insurance and not report the collision, but if your settlement negotiations fail, you will have lost the chance to go through insurance. If that happens, the only option left is a lawsuit and that could leave you in a worse position than you would have been if a claim were filed against your insurance.
Should I handle my accident without insurance?
There are many considerations when determining how you will handle a car accident. but you have some time to think it over.
If you can avoid the insurance company, you don’t have to worry about your premium rate going up if you were at fault for the accident. That’s what most people who go private try to avoid: every time you’re at fault for an accident, your insurance goes up a higher percentage. And if it happens too often, you could be left without insurance. an accident claim could result in a rate increase of 20 to 40 percent.
An insurance company will often use a traffic violation as justification for increasing the premium rate. If you’ve had multiple claims, traffic tickets, or accidents in the last 3 years, you’ll likely see an increase in your insurance rate.
If you and the other driver agree to a settlement without insurance and then the damages are more money than you thought, it might be too late to file an insurance claim if the accident went unreported. what appears to be a small amount of damage could add up to thousands of dollars that you will then have to pay for out of pocket.
Using insurance instead of dealing with a car accident privately can save you a lot of heartache. you never know what the other driver will do once you leave the scene. they may go home, talk to a spouse or friend, and then decide they want more money than you think is fair.
always follow the law
Almost all states require you to report the accident if there is any personal injury. Although the accident may seem minor, if the occupant of any vehicle involved suddenly feels a pinch in the neck or a cramp in the back, they should report the accident.
Remember, you don’t want to get into legal trouble because you decided to save a little money on insurance. Yes, insurance coverage can be expensive, but so can the legal consequences of breaking the law. If you have any doubts, go to the insurance company to protect yourself.
If you file a claim, your insurance company is legally obligated to provide you with a defense against liability or a lawsuit. must pay the claim, even if you are at fault. Similarly, if the other driver files a lawsuit against you, the insurance company is expected to defend you and cover the lawsuit, if that is part of your policy. But if you decide to cover damages privately and something goes wrong, you’re on your own; you could end up paying a legal defense and a trial.
again, if the accident involves only your car or if it really is minor, it might make sense to pay for the damages out of pocket. But as soon as issues of liability, personal injury, extensive damage, or lack of cooperation from another driver involved arise, you’re probably better off working through your insurance company.