Say you get into a fender bender. It's minor, nobody's car is damaged, and both you and the driver agree that involving your insurance company is going to be aggravating. Wouldn't it be great if you both agreed to just pay the other's damages and not involve all that paperwork?
No. No it wouldn't. In fact, it's a bad idea.
While you're not obligated to report an accident to your insurance company if the car itself isn't seriously damaged (i.e. requiring major body work or repairs that might compromise the value of the vehicle), and the paperwork can seem annoying, it's a whole lot better than the alternative. Here's why.
Reason #1: It Probably Won't Even Increase Your Premiums to Report Minor Accidents
The big concern is that reporting an accident might raise your premiums...but before assuming that will happen, you should take a close look at your policy. Most policies have a damage amount below which nothing is "chargable." Roughly translated, if the damage to your car is minor, just knocking a ding out of a fender or painting over a scrape, they'll likely just pay it out and not raise your premiums.
So, be aware before thinking about it.
Reason #2. The Other Guy May Decide Not to Pay
The truth is, if you have nothing but a handshake agreement to pay the other's cost, you could be in a world of trouble once he sees the bill and decides it's too rich for his blood...or the contact information he gives you rings up the local pizza place.
Even if the information is legitimate and he just refuses to pay, you have no evidence that he's the one who dinged your car. If you take him to court, you'll have to demonstrate you're not the one trying to rip him off, as well. And if you do go to court, your insurance company might hear about it, and show up asking a few pointed questions you'll have to answer.
Reason #3. The Other Guy May Call His Insurance Anyway, and Then You're Really in Trouble
There's just no guarantee this other motorist you don't know won't be on the phone to his insurer the minute you're not in his line of sight, and that's where your problems really begin.
If he contacts his insurer, and you don't, it's going to be your barely-documented word against his well-documented word. Scammers in particular love this because it lets them report injuries that you never saw, but will be on the hook for if you get roped into a lawsuit.
This is why you need to contact your auto insurance company, regardless of the situation, instead of relying on handshake deals. You don't just pay your premiums to be covered in the event of an accident; you pay premiums because it means the insurance company is on your side, investigating the accident and collecting information as soon as you alert them. But if you don't alert them, they're hobbled, and you're almost certainly looking at a rate increase...if you're lucky.
So, as tempting as it is not to: call your insurance company. You'll be glad you did.
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