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When to Settle a Car Accident Without Insurance

By Aaron Crowe

One of the first inclinations after being in a car accident is to call your auto insurance company. After making sure everyone is safe and you’ve contacted the other driver, calling your insurer for help can be one of the first things you want to do.

That can often be a smart move. Insurance agents are there to help you through the insurance process and want to make sure that your car and any injuries you have from the accident are taken care of quickly.

There are some times after an auto accident, however, when there really isn’t a need to contact your insurer. Filing an insurance claim could lead to a rate increase somewhere down the road.

Going it alone without insurance isn’t right in every circumstance. You should at least exchange insurance information at the accident scene with the other driver, just in case you need to contact them later or decide to file a claim anyway.

Here are some times when it’s worth considering not contacting your insurer:

1.  You’re in a minor accident.

If no one is injured and both cars have minor damage, or if it’s only your car that was damaged — such as from backing out of a parking space — then a claim might not have to be filed.

A minor accident in a parking lot where you barely hit another car, for example, could be the right time not to file a claim. But only if the other person doesn’t dispute it and you can pay for the damage yourself, says Spencer Ruyle, a State Farm agent in Jefferson City, Missouri.

Get an estimate from a mechanic for the cost of repairs, and if it’s more than the amount you can afford to pay, then you may want to call your insurer.

A simple rule of thumb to remember after getting an estimate is if the cost is greater than your deductible, you may want to consider using your insurance to pay for it, Ruyle says.

2.  You don’t have questions for your agent.

If the accident doesn’t lead you to any questions that you’d have to call your insurance agent to get answers to, then you might be OK by dealing with it yourself.

Remember to not mention this accident to your insurance agent because from an insurer’s perspective, “we should be filing a claim immediately” and are obligated by contract to do so, Ruyle says.

It can lead to a slippery slope if you call for advice because you’re upset after the accident and want answers quickly, he says.

“I’m supposed to file a claim if I hear from them,” and not just give advice, Ruyle says.

3.  You’re at fault and have filed a few claims lately.

Avoiding a rate hike is a major reason not to report an accident, especially if you’re at fault and you’ve filed some insurance claims in the last few years.

Having an at-fault accident on your record could lead to higher rates after the next accident, even if it’s minor. Paying to repair that minor damage out of your own pocket could be cheaper than going through your insurance company.

“The more claims you have, the more likely you are for some adverse actions to be taken,” Ruyle says.

If the accident isn’t your fault, you won’t benefit by settling the claim privately. Your rates won’t rise if you make a claim, either through your own insurance or the other driver’s liability coverage.

4.  You know the victim.

If you hit a relative’s car or somehow know the other person involved in the accident, it’s a lot easier to settle who pays for the damage than if it’s a stranger. If your cousin is responsible, you’re more likely to accept a private deal than you would with someone you don’t know.

The same goes if you’re at fault. It’s easier to deal with payment privately if you know your friend won’t take advantage of you by asking you to pay for damage that happened previously.

If you get in an accident with a stranger who you somehow find trustworthy, you should still gather their personal and insurance information in case you decide to file a claim later. An insurance claim can be filed within one year of an accident, Ruyle says.

When to file a claim

On the other side of the insurance claim issue, there are times when it’s definitely worthwhile to call your insurance agent and file a claim. Here are four:

1.  Major damage.

If either car suffers major damage, it’s an obvious sign to contact your insurer, whether or not you’re at fault. Repairs will likely be expensive, and even if the at-fault driver promises to pay for them out of pocket, you’ll be safer with the assurance of your insurer that you’re covered and they’ll represent you.

If your car is totaled, your insurer can help solve issues that are too complicated for you to deal with alone, such as determining the value of the car.

2.  Someone is injured.

Whether it’s you, your passengers, someone in the other car or bystanders, you’re better off calling your insurance company if anyone is injured in a car accident you’re in.

Without it, you risk being sued, not getting all of your medical bills paid, paying for treatment for fake injuries, and other potential hassles.

3.  Fault is disputed.

If there is any dispute over who is at fault in the accident, then file an insurance claim, Ruyle recommends. Your insurer will represent you and help determine who was at fault.

“The quicker that you file the claim, the quicker we can be on top of it and the sooner you can be taken care of,” he says.

4.  The other driver offers cash or is adamant that you go to their mechanic.

If an at-fault driver throws down cash at an accident scene to pay for your damaged car, it’s probably not a good idea to take it. It’s too early to know the extent of the damages, to yourself or your car, and it can be a clear sign that the other driver doesn’t want their insurance company called.

The same goes if he offers to fix the car himself or insists you take your car to his mechanic. Each driver should choose their own repair shop, or better yet, have their insurance company recommend a mechanic.


Aaron Crowe is a freelance journalist who covers the auto industry for