Other party wants to give me check instead of filing insurance, is this kosher?
December 27, 2012 5:12 PM   Subscribe

Person bumped into me in parking lot, wants to give me check instead of filing insurance, is this kosher?

This was just a bump by someone who didn't look before backing out of their parking space, but the rear bumper and quarter panel need fixing and repainting. I asked for an estimate from a local body shop and the first thing he asked is if this was going to be on insurance or not, because his prices were much lower if I was paying cash. MUCH lower. The printed computer quote was for $1300, but he said if I paid cash, he'd do it for $750.

If I get a check from the person who hit me for $750, I need the repair to actually be $750 and not $1300. The estimate clearly says "this is just an estimate, actual costs may be higher". Can I get a quote from someone, maybe a body shop chain instead of this independent guy, that guarantees the work will not cost more or should I insist on filing with the person's insurance?
posted by Mr. Gunn to Work & Money (20 answers total) 1 user marked this as a favorite
Go through the guy's insurance. They'll even tell you which mechanic to go through. You get absolutely zero benefit from a lower cost of repair.
posted by empath at 5:17 PM on December 27, 2012 [3 favorites]

You don't say what country you're in but in Australia if you pay out of pocket and don't file with insurance than your insurance rating isn't touched, which means if this person gets in another accident and do file it through insurance than it'll potentially cost them less out of pocket. So, it'd be perfectly reasonable for them to want to just pay up front and avoid insurance getting involved, if they can avoid it.

The body shop thing too is pretty normal here - insurance jobs get charged a lot more than if you pay cash or specify that it's not an insurance company paying. In my younger days I was hit from behind when backing out of my driveway and was found to be at fault - the insurance company fixed their car which was a dinged headlight and dented front bumper and I paid for my own repairs which involved replacing almost the back half of the car - and the costs were almost the same.
posted by Silentgoldfish at 5:17 PM on December 27, 2012

Also, file a police report if you haven't already. The guy might not even have insurance.
posted by empath at 5:18 PM on December 27, 2012

It's fairly common that people want to do this because it is better for their insurance to not have an accident on record (depending on your insurance, it may be better for you as well -- or it may have zero effect).
My parents have had success with the personal check route, though they new the offender. When they don't get money from the offender, they go through insurance. I was rear ended and the guy claimed it wasn't his fault so I called the police and went through his insurance.

In this case, the person is giving you the money for the damage (they've already given you $750!) and you're getting your car fixed. If the actual price ends up being more, that's the time to go to the person and get them to pay the full amount. You've already accepted their money and don't gain anything by going through your insurance. It will probably be a bigger hassle than its worth.
posted by DoubleLune at 5:22 PM on December 27, 2012 [1 favorite]

Best answer: This happened to me once (in Minnesota). The person who hit me ended up giving her credit card info to the body shop & they billed her directly for the full cost. This way, I wasn't worrying about whether the check was good or would cover everything; the body shop had her signature agreeing to pay and if she didn't, they could pursue her through the usual debt collection methods.

That said, it was still more hassle for me than the times I let insurance handle everything and I'm not sure I'd be willing to do it this way in the future.
posted by belladonna at 5:26 PM on December 27, 2012

Let insurance handle it. Less risk. If the person was worried about their insurance rates, they should have taken more care backing up.
posted by KokuRyu at 5:27 PM on December 27, 2012 [3 favorites]

I'd decline the offer too. No benefit to you and you don't want to be taking the risk that this stranger's check or credit card proves of no value.
posted by bearwife at 5:37 PM on December 27, 2012

Response by poster: Giving them the name of the shop and letting them work out payment seems like a good idea, I'll do that. I don't think the shop would offer such a reduced rate if they didn't prefer cash as well, and I'm pretty sure this person is good for it. They were driving a new model "luxury" SUV in a pretty well-heeled area of town.
posted by Mr. Gunn at 5:40 PM on December 27, 2012

Best answer: Since this question is a duplicate of this thread and this thread, I'll just duplicate my answer:
For what it's worth, I have gone down the path of settling an accident claim outside insurance. In my case, I was "lightly" rear-ended on the highway, resulting in cosmetic damage to the rear bumper costing just over $600 to repair. My reasoning was two-fold:
  • If I were the person causing the accident, I would like the injured party to allow me to pay for the damages. I happen to be in a very high risk group (young unmarried male), so I know that any claims could cause my insurance rates to jump, possibly far more than the $600 cost of repair. As a matter of principle, I try to help out other people unless I have a reason not to.
  • From the perspective of the injured party, I know that even not-at-fault accidents cause insurance rates to go up. In some states (but not all), insurance rates can't be increased for not-at-fault accidents that don't cost your insurance company anything. Unfortunately, that doesn't prevent your insurance company from dropping your "no accident"/"few accidents" discount, because when I had a not-at-fault accident that I never even reported to my insurance company, my insurance rates promptly went up 20%.
I'm not saying you should go one way or another - just that it is certainly possible to settle outside of insurance and end up mutually (as in both of you) better off.
In addition to having the at-fault party (the other driver) guarantee the cost of the repair to the repair place, you can also have them reimburse you for the actual cost of the repair. If you trust them to do the repair, they should be fine with paying for it in any way you ask.
posted by saeculorum at 5:42 PM on December 27, 2012 [2 favorites]

Ditto KokuRyu: let insurance handle it, there's less risk that way to you. Call the police non-emergency number now and make a report, then call your insurance people. The problem with an 'I'll just pay cash' situation is, even if they DO actually pay you, estimates rarely cover the full repair cost: there's often hidden damage the mechanics won't see until they're hip-deep into those repairs. And, too, it's nice to be Mr. Friendly and all, but this person has just cost you time and money, plus it's not like they're gonna get arrested or anything: file the insurance claim.

I'm asuming you DID get their license & insurance info, as in you actually copying the info directly off their physical driver's license and insurance card --- rather than just writing down what they verbally told you --- and you are 100% positive they DO have both? Also note the car's license plate, by the way. It's also a good idea to take photos at the scene if possible, photos of BOTH your vehicle AND their car, so there's no question about how much damage was present.
posted by easily confused at 5:45 PM on December 27, 2012

Oh, and looking at your update: their driving "a new model 'luxury' SUV in a well-heeled part of town" means NOTHING! They could be broke and about to have the car repossessed, it might not even BE their car, or they could just decide not to pay...... and giving their credit card info to the body shop is no guarentee either: they can always dispute the charges later.
posted by easily confused at 6:00 PM on December 27, 2012 [1 favorite]

You have a few days ..
There's certainly nothing untoward about offering cash -- it's just self-insurance, which is essentially what plenty of big companies do (including most railroads, for example). And it has the same purpose, which is to keep down the cost of insurance, police dealings, etc.

If you've got things well documented, and the other party signs a simple statement admitting to fault and agreeing to pay reasonable costs -- and seems worth your trust -- why not?

(Anticipating objections .. yes, all things being equal I'd go with insurance. But note that even an on-the-spot police report and an insurance claim can't always answer the basic Q of Who Was At Fault.)
posted by LonnieK at 6:23 PM on December 27, 2012

I'd decline the offer too. No benefit to you

Huh. I'm surprised some folks don't seem to be aware of what saeculorum noted: simply claiming something on your insurance - whether another person was clearly at fault or not - can cause your own rates to go up. I thought that was pretty common knowledge.

There's *definitely* the possibility, if not likelihood, of a clear benefit to the poster of not involving his/her insurance company in this case. Getting the other party in direct contact with the mechanic, making sure you're copying info directly from their license and registration card, and having them sign an agreement to pay (in front of a notary, maybe?) seems to this non-lawyer like solid enough protection while keeping your insurance company from suddenly deciding this is one too many claims and charging you more.
posted by mediareport at 6:29 PM on December 27, 2012 [3 favorites]

Revising my comment -- what mediareport & saeculorum said are true -- your own insurance rates are at stake here, too -- so my 'all things being equal' hedge isn't good.
posted by LonnieK at 6:49 PM on December 27, 2012

Determine how much your repairs will cost YOU. Add a % to that that you are comfortable with. 10-30%. Present this to the other party and tell them you will only accept cash.

At the conclusion of repairs to your satisfaction you may reimburse hir the amount remaining of the 10-30% mark up.

If the other party is unwilling.... Turn it over to your adjuster.
posted by notreally at 8:12 PM on December 27, 2012

Have the other party sign a short document outlining that the repair costs are their responsibility, and that any additional costs from the repairer will be paid promptly, or else you have the right to seek these costs through a court or through their insurer, plus costs.
posted by jannw at 5:29 AM on December 28, 2012

Some jurisdictions have a requirement to report accidents, so signing a contract that you both agree to circumvent the law won't really pass muster.
posted by gerryblog at 6:10 AM on December 28, 2012

OK ... to be a bit clearer ... obligations to report an accident to the police are separate from any contractual obligations to report to an insurer, which will be detailed in legislation and your policy document respectively. DUH!

San Diego PD does not seem too concerned about minor property-only accidents and does not appear to have a reporting obligation for this type of accident.

So, yes, a short contract concerning damages is not circumventing the law, and is enforceable in a court.

posted by jannw at 6:33 AM on December 28, 2012

Best answer: Another thing to consider: If you let the person pay for the repairs directly, is he also going to pay for your rental car during that time? Always assume the repairs will take longer than estimated; do you want to rely on friends for transportation for a week? (I thought, "oh, I can manage for 3 days," but it ended up taking twice as long.)

If you have the other guy's insurance pay for the repairs, you should be able to get it to cover the cost of a rental; don't let yourself get suckered into having to pay $20-50/day out of pocket so you can live your life while being "nice" and letting this person avoid an insurance claim.
posted by belladonna at 9:35 AM on December 28, 2012 [1 favorite]

Response by poster: Thanks everyone & sorry for the duplicate. A search for car insurance accident didn't turn up those threads, so thanks saeculorum for the repost.
posted by Mr. Gunn at 11:13 AM on December 28, 2012

« Older I once knew a dumb comedy song with these two...   |   Music theorists: What makes this song so... Newer »
This thread is closed to new comments.