Getting into a car accident can be scary no matter how minor or major the damage. Fortunately, your auto insurance can help cover your financial responsibilities. But if the accident doesn’t result in serious damage or injury, you might be wondering, “Should I call my insurance company after a minor accident?” After all, filing a claim on your auto insurance can sometimes result in higher auto insurance rates, especially if you’ve been in an accident recently.
But when it comes to whether you should call your car insurance company after a minor car accident, the short answer is yes – it’s always a good idea to let your insurance company know when you’ve been involved in a collision. However, you may choose to pay for repairs out of pocket, depending on the circumstances.
When could someone consider paying out of pocket
Paying out of pocket for a car accident always carries a certain level of risk. That being said, the use of insurance is not always necessary. Not using insurance to cover an accident means your premium should not increase due to a claim, which is a major benefit. Here are some types of accidents for which the use of your car insurance may not be necessary:
A cheap accident with just you or your car
If you’re involved in a very minor collision that doesn’t involve any other drivers, you can probably get away with paying the damages out of your own pocket. An example would be driving into an object and getting a dent in your bumper or a crack in your windshield, but there is no other person injured or significant damage done. In this case, your insurance policy deductible could be higher than the cost of repairs, so filing a claim would not be financially beneficial.
Very minor accident with another driver
The other situation where it may make sense to pay for accident damage out of pocket is if you have a very minor collision with another driver. A classic example is getting hit from behind at a stop sign or bumping into another car in a parking lot. Assuming the damage is minimal and both drivers agree on who was at fault, not using insurance might make sense.
However, insurance professionals generally only advise avoiding insurance in this situation if you can be sure that the other driver will not file a claim without your knowledge. If you feel hesitant, it may be worth contacting your insurance company to avoid unpleasant surprises.
When you should contact your insurance company
Auto insurance is designed to protect your finances in the event of an accident, whether you cause a collision or are hit by another driver. Although you can get away with not contacting your insurance company after certain accidents, more often than not you will need to let them know. Here are some situations where you should contact your insurance company:
someone got hurt
If you or the other driver involved in a collision are injured, you should contact your insurance company. The bodily injury liability portion of your policy will cover all injuries unless you are living in a no-fault state, in which case Personal Injury Protection (PIP) coverage will generally come into effect. Medical bills after an accident can be expensive, even if the injuries are minor. Using your insurance could save you a lot of money that would otherwise come out of your pocket.
You don’t trust the other driver
If you have an accident and you don’t trust the other driver’s story, be sure to report the accident to your insurance company. For example, if you and the other driver can’t agree on the cause of the accident, or if you suspect the driver may be faking an injury to get more money from your insurance company in the future.
Fees will be expensive
If you have an accident with major damage that will likely result in expensive repairs, let your insurance company know. Your Property Damage Liability (PDL) should cover repairs to the other driver’s vehicle if you’re at fault, as long as you don’t exceed the limit. Likewise, if you are involved in a collision where another driver is at fault, their PDL should step in to cover the damage to your vehicle. If you have full coverage, using insurance means you won’t have to cover the full cost of repairs in the event of a covered accident, regardless of fault.
Things to consider before paying for an accident out of pocket
If you decide to pay for an accident out of pocket, there are a few things you need to consider first. Even if a collision is minor and there are no injuries, it does not automatically mean that avoiding insurance is the right decision. Here are some things to think about:
Make sure the damage estimate is correct
First, make sure the estimated repair cost for any damage is accurate. Don’t rely on a quick search on a search engine to see what a certain repair might cost. Instead, go to a local body shop and have a mechanic give you a quote after examining the vehicle in person. The damage estimate may be much higher than expected and you may not be able to file a claim if you wait too long after the incident. There could be internal damage that you cannot physically see, which could result in higher costs.
Make sure you trust the other person
Before deciding to pay for an accident out of pocket, it’s important to make sure you trust the other driver involved. Both of you can decide to cover the collision out of pocket, but there’s no guarantee that the other driver won’t file a claim later behind your back. If you have any doubts, it’s a good idea to contact your insurance company for peace of mind.
You could have forgiveness of accidents
Some drivers have an accident deductible included in their car insurance policy. With accident forgiveness, your rate will not increase after your first covered accident. If you have a first accident waiver, you may decide to contact your insurance company and file a claim, as this should not impact your premium.
Paying out of pocket could offer greater financial flexibility
If money is tight, paying out of pocket after an accident might make more sense. It lets you pay on your own schedule, which means you could avoid paying a large amount all at once. You can also get multiple repair quotes from different shops, while some insurance companies won’t let you choose the mechanic.
If you get a new quote, you may need to disclose the accident
When you get a car insurance quote, you’re usually asked to disclose any recent accidents or traffic violations you’ve had. This includes incidents that were not covered by insurance. If you get a new auto insurance quote, not disclosing recent accidents could compromise your ability to get coverage.
The exchange of information is important after any accident
Even in the event of a minor accident, it is good to exchange information with the other driver and collect evidence of the collision. If the other driver decides to sue you in the future, having photographic evidence of the damage could help you avoid an unnecessary legal battle.