It seems like a no-brainer that you would call your insurance agent after a car accident, regardless of its severity. Not only can settling things with an insurance company prevent a long and expensive lawsuit, but it can also help you receive your own compensation, depending on who’s at fault.
However, more and more people are looking to avoid letting their insurance company know about accidents for a variety of reasons. But can you settle car damage without an insurance company's help, and if so, is it worth doing so? Let’s find out!
Should You Settle Things Privately?
To put it simply, you can settle things privately with the other party without involving your insurance company. Yet, that should only be done when there is little to no damage and there is no chance of an injury claim that could pop up in the future. Even so, most legal experts advise against it, mainly because it can do more harm than good.
As a matter of fact, it can be hard to know immediately the true extent of the damage to a vehicle. Or, sometimes, injuries manifest only later. Therefore, a cash settlement may not adequately compensate someone for damage or injuries, and you might end up getting sued by the party that considers the amount too low to cover future medical expenses.
But Why Would Anyone Settle Things Privately?
Usually, the driver at fault is the one that initiates a settlement privately to avoid problems with their own insurance company. Additionally, while auto insurance is essential, some drivers don’t have it, so settling things privately is their only option. Even so, not everybody can afford to do that, especially since car damage and injuries can add up quickly. In other words, people with significant amounts of money are those that often prefer to do private settlements.
Why Should You Avoid Settling Things Privately
As previously mentioned, while it might sound like a good idea, settling an accident without insurance isn’t one. And here’s why that’s the case:
There Might Be Undetected Damage
Although the accident might seem like a minor mishap, there might be more damage that you haven’t discovered yet. In fact, it may take until you visit a car repair shop to find it.
And, if you’ve accepted a settlement without letting your insurance company know about the accident, you may have to pay thousands of dollars from your own pocket to fix the damage. That’s because your insurance company didn’t know about the crash and can deny any of your claims after the fact.
You Could Deal With Future Medical Problems
Not every car accident causes immediate health problems, and as a result, you might believe that you are fine. However, what happens if one of the other parties experiences back and neck pain weeks later? And what if the pain requires expensive treatment that the victim may not want to pay for? Chances are that the other party may ask you to cover any medical expenses, especially if you were the one that wanted a private settlement.
And while your insurance company would usually help, they can’t do anything if you don’t tell them about the accident. Therefore, you might have to pay the other drivers’ bills all by yourself. And if you refuse, you might get sued by the other party, such as getting sued for emotional distress, which will only complicate things further.
There Is an Obligation to Notify Your Insurer
Most auto insurers need you to let them know about the accident promptly. If you don't, future claims related to the accident will most likely be ignored. The one occasion you might not want to report the accident is if it only involved your vehicle or it occurred on your property. For example, if you tried to leave your garage and hit your trash bin or fence with your vehicle. But other than such specific situations, you should definitely notify your insurance company.
It’s important to note that reporting an accident doesn’t necessarily mean a rise in your insurance rates. Actually, you only face a rate increase after you file a claim, not after you just notify your insurer about an accident. So you don’t have to worry about hiking your insurance rate by simply letting your agent know about the accident.
All in all, while settling car damage privately might seem like a good idea, it’s not the best way to handle things. Not only is it hard to determine the damage without the help of an insurer, but you also expose yourself to future lawsuits. That is exactly why it is also worth getting a lawyer for a car accident.