Settling an Accident without going through Insurance – Benefits and Risks
Even if you brag of the best car insurance coverage, at times settling an accident without going through your insurance company is seen as wise move. The practice is common among those people who are involved in minor accidents and for some reasons find it hard to notify their insurers. They fear that once they submit a claim, their monthly premiums may be increased. Due to this fear factor, the policyholders end up making an agreement with the other party that caters only for the repair damages instead of going through the legal process that involves contacting your insurer.
How to settle an auto accident claim outside insurance?
The simplicity of the process can explain why most people would prefer to settle the claims on the spot in the case of minor accidents instead of going through insurance. If you compare auto insurance claim settling process among the different insurance companies, you’ll realize that the process can be a bit cumbersome. On the other hand settling personally is simple. Here is how:
- Begin by collecting as much information as possible from the at-fault party and estimate the damage on both your cars.
- Never accept cash at the scene for the estimated repair costs. Instead, request an estimate of the same from two body shops. Avail the same information to the at-fault party. Accepting cash on the spot is risky because you might not be familiar with the current costs of automobile body shops.
- Draft and sign a statement relieving the at-fault driver from any further liabilities once settlement is done. In the statement, you should include: amount agreed, terms of payment and the personal details.
- You can either repair the car using your own funds or wait for the at-fault driver to provide you with the settlement amount.
Reasons for not involving insurance
People who opt to settle behind insurance are desperate to keep insurance premiums low. However, this is not often the case. As the insured, you need to find out if indeed a collision claim will raise your rate. If it’s your first accident and you are not at fault, chances are that your record may not be greatly affected. In such a case, you’ll still continue to enjoy low car insurance rates as before.
- The other party can backtrack by going to his insurer even after offering you a deal. This makes you the guilty party.
- You get no rental coverage even when your car is being repaired
- After the settlement you’ll have to cater for any other expenses on your own