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How to Settle Car Accident Privately?

How to Settle Car Accident Privately

While every driver is legally required to carry car insurance, drivers don’t always have to file a car insurance claim after an automobile accident. Because of this, many drivers have a certain threshold of damage on their vehicle when they choose to file an auto insurance claim. If you’re one of these drivers, then you may already have thought about what you must do to settle a car accident privately without the use of your auto insurance.

Typically, the most common car accident to settle on your own is fender benders. This is an auto accident where the cars suffer damage while the drivers and passengers remain completely unharmed.

Every year, there are over four million fender benders reported to the police. Police reports are always required regardless of the severity of the automobile accident.

While not filing a car accident claim with your auto insurance company can save you on auto insurance premiums, it can leave you open for lawsuits if personal bodily injuries are involved. That’s why it’s not only important to know how to settle a car accident on your own, but when you are able to. This post covers both.

How to Settle Car Accident Privately Without a Car Insurance Claim?

Let’s start out with the basics; you are involved in a fender bender and are thinking about handling this minor car accident on your own without involving your car insurance company.

If you plan to not get your car insurance involved, then you should do the following in order to resolve the settlement privately:

  • Documentation - Document everything about the vehicle accident, including photos of the cars involved and the location of the auto accident. It also helps to draft the private settlement agreement that you both will sign in the future. At this point, though, no private settlement agreements are formally made.
  • Collect over driver’s information - When it comes to the other car involved in the fender bender, collect information about it, including plate number, make, model, and even color. Make sure you get the other driver’s contact information as well.
  • If you’re not at fault, file a police report - A police report may be required; if not, it is still best to have one. This will include documentation on the cars involved, like what you just collected. The fault of a driver is also determined here.
  • Shop around for car repair providers - Since your auto insurance provider is unaware of the car accident and won’t direct you to an auto shop, you have some freedom to be able to look around for car repair quotes and find the one with the best deal.

Why Not File an Auto Insurance Claim in a Car Accident With Little to no Damage?

When drivers don’t file a car insurance claim, their car insurance provider is unaware of the fender bender. This keeps the vehicle insurance carrier from raising your auto insurance premiums if you are found to be at fault for the car accident. Something that seems as minor as a fender bender can actually affect your auto insurance premiums for a couple of years.

Another reason not to file a car insurance claim is the cost of vehicle repairs is less than your auto insurance deductible. But there are a lot of what-ifs when not filing a car insurance claim.

For example, the other driver could have unseen personal injuries that they could sue you for later if you didn’t use your auto insurance.

How Can an Auto Accident Affect Car Insurance Premiums Rates?

So, what kind of car insurance rate increases cause auto insurance policyholders to stay silent to their auto insurance provider when some minor car accidents occur? This answer varies by vehicle insurance provider and state they reside in.

California, Louisiana, Michigan, and Minnesota are known to have the highest auto insurance premium increase for a car accident -even if it is the driver’s first. Meanwhile, Hawaii, New York, South Carolina, and Alaska are subject to the lowest car insurance premium increase.

Here is how some at-fault vehicle accidents, in particular, affect auto insurance rates. Say that your car insurance premium is the national average of $1,430:

  • Property damage under $2,000 - You can be looking at a 26% increase in your auto insurance premiums after a vehicle accident like this, increasing your car insurance premium from $1,430 to $1,796 after the auto accident.
  • Property damage over $2,000 - This results in a 32% auto insurance premium increase, meaning you will be paying around $1,880 instead of the usual $1,430 for your car insurance after the car accident.
  • Bodily injury accident - When someone is hurt in a car accident you cause, your auto insurance rates can also rise by 32%.
  • Two property damage over $2,000 - After at least two car accidents with property damage, your auto insurance rates will start to reflect your driving with a 110% increase. That’s nearly $1,600 more you have to pay, adding up to a possible total of $3,002 in car insurance.

How Can You Get Your Vehicle Repaired After a Private Settlement?

After both yourself and the other driver or drivers involved in the car accident, crash, or fender bender agree not to file a car insurance claim with your respective auto insurers, you can begin looking for a place to have your car repaired.

You and the other driver or drivers must agree not to get your car insurers involved because if one finds out, then it’s likely that the other will too. As previously mentioned, you have much more freedom with the options of auto shops you can take your car to. You can pay for your vehicle repair yourself and then be reimbursed by the other driver if that is what was agreed upon, or they can provide payment for the auto repairs upfront.

That’s why it’s important to work these details out with the other driver and make sure they’ll comply. Of course, there’s also the possibility that the actual cost of vehicle repair is higher than the estimate. You won’t be penalized if you decide to get car insurance companies involved at the last minute.

What to Do After a Car Accident is Settled Privately?

Once the vehicle repairs are done, there is one more small matter to tend to. You and the at-fault driver have to fill out what is known as a “paying out of pocket for a car accident” form. This officially ends the whole ordeal, and neither driver can pursue or request more money later on. This also protects the at-fault driver if you discover you have personal injuries or vice-versa.

What Are The Pros And Cons of Privately Settling a Car Accident?

Let’s review everything we gathered from settling a car accident on your own -both the good and the bad.

Here’s why settling privately can be good:

  • Auto insurance premiums don’t increase - Since you’re paying out of pocket if you’re at fault or agreed not to file a car insurance claim with your vehicle insurance provider, your auto insurance rates will remain unchanged.
  • Don’t have a car insurance claims process - The auto insurance claims process can take months, while you can arrange a deadline of your own with the other driver or drivers involved in the fender bender. You can have the whole thing resolved much faster.
  • No auto shop restrictions - Your auto insurer will naturally not be there to direct you to an approved auto shop for vehicle repairs. So, you have much more freedom in picking where you want to get your car fixed. A good rule of thumb is to get at least three estimates from different auto shops.

Here are some risks you run when opting to settle a car accident privately without auto insurance:

  • May not get your vehicle damage covered - This would be the case if another driver is at fault. There’s always the risk of them flaking on you, so you want to get their contact information like phone number and address. A photo of their ID can also help.
  • Can be sued due to personal injuries - Car accidents wherein someone was personally injured shouldn’t be privately settled because if you are at fault and the driver you hit later reports a personal injury from the vehicle accident, they can sue you. That’s why minor fender benders are the only time where you can really settle the damages on your own almost without risks.

Shopping for affordable car insurance? Even if you have a driving record with some blemishes, you still need auto insurance, and that’s where Insurance Navy can help.

Call 888-949-6289 or request an SR-22 quote online today. Quotes are offered at no cost to you. Need further assistance? Stop in at one of our conveniently-located storefronts.

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