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Settling a Car Accident Without Insurance

Things to remember...

  • It’s your duty to notify your insurance carrier when you have an accident but you don’t have to file a claim
  • If the damages are minor, you might be interested in trying to settle your accident claim on your own
  • When you file an at-fault claim through your insurer, it can affect your rates and your future driving discounts
  • There are risks to settling a car accident claim on your own. Be aware of the risks before you pay out money

It’d be a shame for a minor fender-bender to have a drastic effect on your insurance rates.

Everyone appreciates the fact that they have sufficient auto insurance when they are in a serious accident, but the appreciation doesn’t go as far when there are minor damages that could result in major cost hikes when you file a claim.

If your main goal after a minor crash is to avoid having to get your insurer involved and pay more for your insurance, you might want to try and settle the claim on your own.

Before you can even try and leave your insurance out of it, you and all of the drivers involved need to agree that you will be working something out with each other instead of filing a claim.

If you can convince the driver to agree to this, here’s what you need to know about private auto accident settlements.

Looking for the best auto insurance rates as well? Start comparison shopping by entering your ZIP code above!

Table of Contents

Know Your Duty to Report the Accident to Your Insurer

There’s a lot of confusion surrounding whether or not policyholders are required to file claims after they have auto accidents. Auto insurance policies are contracts and there are requirements for each party on both ends.

Fortunately, there’s no requirement that says that you have to file a claim after an accident or disclose all of the damages sustained.

You don’t have to file an auto accident claim but you do have a duty to notify your insurer when you’re involved in an accident that’s resulted in injuries or property damage.

You’ll have to tell the insurer when the accident happened, where it happened, and how it happened at the time you report the accident. Telling the insurer doesn’t mean that you’re filing a claim.

Make Sure to Collect All of the Other Drivers Information

What you agree to at the scene of the accident and what happens afterward aren’t always going to be the same.

You may have planned to settle the accident privately with the driver but that doesn’t mean that the driver is going to fulfill their end of the bargain. You’d like to trust the driver’s word, but expecting honesty from a stranger can be reckless.

The best course of action after the accident is to collect all of the same information that you would collect if you were planning to file a claim. This information includes not just the driver’s name, but also the car’s primary insurance information.

If you don’t already have an accident checklist in your vehicle, here’s what you’ll need to jot down:

  • Location (with cross streets or landmarks)
  • Conditions during the accident (weather, traffic, construction)
  • Driver’s name, address, and phone number
  • Registered owner’s name (if different from the driver)
  • Injuries to you, passengers, or pedestrians
  • Description of damage and photos of the damages
  • The license plate number of vehicles involved
  • Year, make, and model of all other vehicles
  • Names of passengers and witnesses with their contact information
  • Insurance company, agent’s name, and phone number
  • Policy number and policy expiration date

Not All Accidents Can Be Settled Without Insurance Companies

Just because you and the other driver agree that you should pursue a private settlement without involving your insurance doesn’t mean that’s a decision that’s in your best interest.

You shouldn’t rush to settle all accident claims on your own or you’re going to put your financial future at risk.

You’ll need to look for the signs beforehand.

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You Should Only Consider Settling Minor Accident Claims Privately

Insurance providers have a very thorough investigation process that they must follow to determine fault. When you’re filing a formal claim, nothing will be paid out until it’s been declared that one of the drivers was to blame.

Anyone who has a major accident should file a claim to avoid the possibility of being considered the at-fault driver.

If you have a minor accident, you don’t have to worry about the same amount of damages or having to pay for medical bills. Only the minor ones should be handled outside of the insurance system.

Be sure that you set aside time to get some estimates from repair shops that you trust. If you can afford to pay the bill and it makes sense to do everything without the insurer, it could be an option.

If You Know You’re At Fault, You Can Save by Settling Privately

If you’ve already filed one or two at-fault claims in the past three years, this next accident claim could be the difference between keeping your coverage and receiving a notice of non-renewal. If you don’t lose your policy, your rates will change as soon as the surcharge is added at the next renewal.

When you rear-end someone or you pull out in front of a driver leaving them no time to stop, there’s no denying that you’re at fault.

As long as you can afford to pay the repair estimates, you might want to settle privately. As long as the other party agrees to do so and will sign a form saying you’ve paid the damages in full, you should be safe.

If You Damage Someone Else’s Property, See How Much the Damage Costs to Fix

It’s a lot easier to settle a claim without your insurance company when you’re in a single-car accident.

It’s not like property can just jump out in front of you. You know that you’re at fault in the accident and that you’re obligated to pay for repairs to the property that’s damaged.

Fixing a garage door, a fence, a parked car, or other damage to property that you and your family don’t own may not be all that expensive.

Unfortunately, if you don’t know the cost and you file a claim through your carrier, your rates could go up even when the repair bills are minimal.

In most states, there’s a damage reporting threshold of $500 to $1000. If the damage exceeds this threshold and you file a claim, your rates can go up.

Only Pursue a Private Settlement If You Feel Like You Can Trust the Other Driver

Sometimes people just have a bad aura or a sketchy personality.

If someone seems off with the other driver and you don’t feel like you can trust them, don’t try to persuade them to keep their insurer out of the loop. Involving insurance companies is key if you feel like you need that protection.

If you know the person, it’s a lot less risky to settle a claim and agree on a fair amount. Never make a private deal with someone you have a bad feeling about just because you’re trying to be nice.

It’s not uncommon for arrangements to take a turn where dishonest people make incredible demands just so that they won’t go to your insurer.

When to Avoid Trying to Arrange a Private Settlement

There will be signs that point you in the direction of filing a claim.

If you haven’t made a decision yet, here’s when it’s best to avoid stressors that arise when you try and pay a third-party for damage without telling your insurer:

  • A car is totaled
  • Someone is injured
  • The other driver wants to fix his car himself
  • The other driver won’t take your phone calls
  • You’re offered a quick cash settlement

Settling car accident claims without filing a formal one can be risky. If you’ve filed a formal claim in the past and you’re not happy with the claims service you were given, get instant quotes online and switch to a new carrier that you’ll be happy with.

Try our FREE online quote tool to compare auto insurance rates! Start comparison shopping by entering your ZIP code below!


  1. http://www.nolo.com/legal-encyclopedia/tips-settling-car-accident-claim.html
  2. http://www.nasdaq.com/article/will-a-claim-raise-my-rates-if-the-accident-is-not-my-fault-cm137903
  3. http://www.dfs.ny.gov/consumer/faqs/faqs_auto.htm
  4. http://www.propertycasualty360.com/2015/02/13/5-signs-its-time-to-settle-a-car-accident-and-5-th
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  10. http://www.mass.gov/ocabr/docs/doi/consumer/faq-july-2012.pdf
  11. http://www.propertycasualty360.com/2015/02/13/5-signs-its-time-to-settle-a-car-accident-and-5-th?slreturn=1480202240&page=4
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  13. http://www.claimsjournal.com/news/national/2013/12/05/240841.htm
  14. http://www.propertycasualty360.com/2015/02/13/5-signs-its-time-to-settle-a-car-accident-and-5-th?slreturn=1480202240&page=9

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