Should I pay for a car accident out of pocket?

October 29, 2024 5:08 AM

My kid had a minor fender bender. Should I pay for the other car damage out of pocket or have it go through insurance?

Low speed accident with no injuries. Damage to the other car is estimated at $2k. Damage to my car is $1k. My policy has a $1k deductible, though I have read that a deductible only applies to your own car damage(?). The other driver made a police report and the report includes my name and insurance policy info. Because the other driver made a police report, I called my insurance company and notified them of the accident - I figured they would learn anyway and I didn't want to get dinged some way for not reporting it.

Question - given that the insurance company knows about the accident, should I just have the other driver go through my insurance, or is there any advantage to me to just pay them directly? I.e., even though the insurance company knows about the accident, is it better not to have a monetary claim on the policy for purpose of future rates? The $2k amount is affordable and it seems like an increase in rates couple be larger than 2k over a couple of years. The other driver does not seem like a scammer who will ask for more money (though obviously who knows). The other driver says he is good with either way.

posted by Mid to Work & Money (10 answers total)

I’m extremely biased, and I am likely projecting some of my own emotional response onto this - but I was rear ended in a “minor”, low speed accident Jan 2023 so I have FEELINGS about this.

TLDR - for the sake of the other person, please go thru insurance and have it all above board ASAP from the very beginning.

6 months after the accident, after a ton of mysterious health issues that did not initially seem related to a car accident (none were on the list of symptoms I was given to look for a concussion), and a very scary cognitive shutdown where I couldn’t process spoken speech - I got delayed diagnosed with severe concussion and needed almost $5k of medical bills (not including what health insurance covered) for neurology and 3 types of physical and occupational therapy to heal properly. It took 18 grueling months total to completely resolved.

I had initially collected the other person’s insurance info, and immediately went to my PCP, but threw away the person’s post it note after 3 months without filing an insurance incident report (biggest regret of my life). There wasn’t any monetary car damage, and I hadn’t met the list of symptoms I’d been given to watch out for, so after 90 days I stupidly threw it out. So the other person never paid a dime for allllllll those medical bills I accrued, because it never went through their insurance.

In retrospect, extremely wish that I had kept that person’s insurance info and filed a report with my insurance IMMEDIATELY on the off chance anything came up later. Huge mistake that I didn’t. Really could not afford that $5K plus the numerous professional damages on my end, sigh.

If I were in your shoes, knowing what I know now about how concussions can rear up later, I would have it all go through insurance from the get. You never know what is going to come up later, and on the off chance the other person ends up in a similar situation to me, it is of course the other insurance holder’s and their ins. company’s responsibility to make it right.

Just get it all documented appropriately from the get go so it can be dealt with smoothly for the other person if anything is needed later.
posted by seemoorglass at 5:59 AM on October 29 [16 favorites]

Having had two car incidents within a few months of each other, I was definitely forced to use my insurance for the second one. The car repair place refused to work on it without it being on insurance.

Just let the insurance companies sort it out--they took care of it for me on the first one because it did involve another person, and I never had to talk to him again, thank gawd.
posted by jenfullmoon at 6:41 AM on October 29 [2 favorites]

Let them file a claim for damage. Damage estimates can grow as the work progresses—'oh, after we pulled off this panel, we found X, Y, and Z'—and you really don't want to deal with the back-and-forth of it all.

One of our kids got rear-ended not long ago, and what started (we thought) as some minor damage turned into the insurance company just totaling her car out after the body shop got down to the real work.
posted by jquinby at 6:58 AM on October 29 [2 favorites]

I had a stupid silly accident with my neighbor's car. The car repair estimate to their car was an astonishing $2K for what looked like a simple repair. My car damage was so minor, just some paint scratches, that I didn't bother to mention it. I decided to go through my insurance - after all, I have been paying thousands of dollars over 40+ years of insurance. I thought I'd have to pay the $500 deductible. They took care of it very quickly and because it was covered under my property damage liability - I paid nothing out of pocket. My neighbor was very happy about how quickly it all worked out.
posted by HeyAllie at 8:17 AM on October 29 [1 favorite]

Just use your insurance. They'll drop you or spike your rate and you'll go somewhere else next year, but this is much less overall hassle than all the stuff that could go wrong otherwise.
posted by Lyn Never at 9:02 AM on October 29 [1 favorite]

If your insurance already knows about the accident, you have nothing to lose by using the insurance. You will not be avoiding hypothetical rate increases due to using the insurance. As I understand it, even alerting your insurance of an accident will cause your risk factors to be reevaluated which typically results in increased rates. The main reason to not involve insurance is so that your insurance company doesn’t find out about the accident and reevaluate your rates.

You’ve been paying for insurance; insurance is now involved; you might as well reap the benefits of having insurance.

I’m glad everyone is ok!
posted by samthemander at 9:24 AM on October 29 [2 favorites]

I agree you're going to see some rate increase just from them knowing the accident occurred. (And once a police report exists, I think you did the right thing by notifying them.) It should be less than if your child is found at fault. However, this is probably a small claim. Claim severity also factors in rates.
posted by michaelh at 12:00 PM on October 29

How a claim affects insurance rates is location dependent. Where I live the metric to raise rates is “at fault claim”, it doesn’t matter how big a mess you made. My insurer (a public insurer) also allows a driver to pay back the amount of the claim to the insurance company to drop the at fault claim from the record. It takes a long time in my jurisdiction to achieve ROI for paying back insurance claims, the rate hike for first accident is not the worst. I think with a $2k claim it would take 10 years to get the money back in terms of lower rates, not worth it.
posted by shock muppet at 3:53 PM on October 29

If the accident involved another party and their vehicle I would always use insurance because an estimate is just that, an estimate, and they will sometimes uncover new damage when they start work. If you have to be in a semi-adversarial relationship with the other party and their insurer I’d rather have my insurance company dealing with that, not myself.
posted by AndrewInDC at 6:03 AM on October 30

I would also encourage you to involve the insurance right from the start. Modern cars, with all their safety features, are designed to crumple and absorb the impact of a collision. As a result, pretty much all cars are of a unibody design, rather than the old "body on frame" approach of yesteryear. The days of going to the junkyard for a fender or bumper are pretty much gone. As a result, it's not uncommon for what appears to be minor or only cosmetic damage, to turn out to be much more serious when given a proper inspection. You don't want the unpleasant surprise of an estimated $1k to turn into a car being totaled when the shop digs deep enough to find the full extent of the damage.
posted by xedrik at 2:25 PM on October 30