The Sound of Settling

January 8, 2007 1:02 PM

How can I handle settling the costs of a minor auto accident without getting my insurance company involved?

I lightly rear-ended another car at an intersection. There was no damage to my car, and a small crack in the bumper of the other car. The driver and I exchanged insurance information, and she agreed to get a quote for the repairs before filing an insurance claim, in case I wanted to pay cash for the repairs without involving the insurance company.

She faxed me a quote for the bumper repair, and for the amount involved, it's worth it to me to pay out-of-pocket to avoid an increase in my insurance premiums. I'd be happy to send her a check for the amount, but I'm wondering what kind of documentation I should obtain to make sure that my liability in this matter is settled?

posted by murphy slaw to work & money (8 comments total)

I've always thought my insurance company cares about claims, not accidents. If you pay for it, get a receipt and you should be good to go - or talk to your agent!
posted by thilmony at 1:06 PM on January 8, 2007

Which state?

I suspect that your insurance policy, if not the law, requires you report all collisions. When you try to get out of something like that, there's always the possibility of getting burned.

Anyway, if I were doing something like this, I'd pay for the repairs directly to the mechanic. You have documentation of what she requested of you and the mechanic can give you a receipt indicating that you paid for that repair to that car.
posted by winston at 1:10 PM on January 8, 2007

It might depend on where you live. The rules can be funny, particularly in no-fault states, if any of these even still exist.

I would get a letter from the owner that states explicitly that you are covering the costs of repair for the damage - and make sure the letter explicitly states that this releases you from all further liability with regards to her car.
posted by COD at 1:10 PM on January 8, 2007

I'm in California.
posted by murphy slaw at 1:22 PM on January 8, 2007

I suspect that your insurance policy, if not the law, requires you report all collisions.

Maybe, but maybe not. In Texas, I know, the police don't want to know if no one was injured and the cars are driveable.

Anyway, if I were doing something like this, I'd pay for the repairs directly to the mechanic. You have documentation of what she requested of you and the mechanic can give you a receipt indicating that you paid for that repair to that car.

I don't think it's any of your business whether she actually fixes her car, just so long as she releases you from liability. I would simply get a letter acknowledging receipt of your check as payment in full for any liability related to the accident.
posted by Doohickie at 1:48 PM on January 8, 2007

I've been in this situation - 3 times, all on the receiving end. As long as the other party paid for the damage to my car, I didn't care who issued the check. My insurance agent said the insurance company did not need to know as long as no one was injured & no action was expected on their part. This was in PA. Just make sure you get a signed release.
posted by clarkstonian at 3:07 PM on January 8, 2007

when I lived in Cali a few years ago any collision with damage of over $500 legally had to be reported.
posted by subtle_squid at 4:54 PM on January 8, 2007

If you decide to pay out of pocket, the most important thing will be to keep meticulous records of the transaction. Hang on to your copy of the estimate. Write a check if you can (that way you have the canceled check with her signature on the back), and you may want to have her sign a note or receipt stating that the debt is paid in full. Pay the body shop if you can, but to be honest, she's not under any obligation to have you do so.

The issue here is that after receiving your check, she can turn right around and report the loss to your insurance company and have them pay the claim. If you don't have any documentation of your payment, they'll pay, and depending on the amount of the claim and the accident threshold at your insurance company/in your state, your rates will go up, and you'll be out whatever amount of money you've paid for the repairs. This probably won't happen, but it can, so just make sure that you have proof of payment.

Oh, and regarding your responsibility to report the accident - that's up to you. Your insurance company probably wants you to report the claim, but then again, they might not care. It really depends on the company. For instance, when I worked for company A, they were very serious about all accidents being reported so that we could underwrite for them, regardless of whether we paid out. However, at company B (where I presently work), whenever someone calls in to tell us that they've had an accident, we suggest that they get an estimate first to see if they'd rather pay out of pocket, thereby avoiding a premium increase. For what it's worth, both companies are on the list of the top five insurance companies in the country (US), so there isn't any ethical funny business going on; it really just depends on the company.
posted by mewithoutyou at 7:18 PM on January 8, 2007 [1 favorite]