Aug 21, 2025
It’s a situation many of us might face: You get back to your car after an outing, only to find a dented bumper or scratched panel. But this time, there’s a note on the windshield with a name, number and insurance details.
You call the number and speak with the father of the person who hit your car. He explains that his son, a new driver, caused the damage and suggests paying for the repairs himself, rather than filing an insurance claim. He’s worried about the hit to his son's premiums.
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It seems honest and you want to be fair to a young driver. But is it smart?
Before you agree to skip the insurance claim, here’s what you should know.
The risks of settling privately
To begin, if you or anyone else was in the car at the time of the accident, it’s safest to go through insurance. Injuries can take days to surface and if there’s any chance you were hurt, your eventual medical bills can pile up. You’ll want the legal and financial protection that comes with an insurance claim.
However, if the damage was to your parked car with no one inside, you may consider settling privately, without filing a claim, though you would still likely be required to report the incident to your insurer. And just know that not filing a claim still carries risk.
The pros of handling it privately include:
- Faster resolution: You won't have to wait on insurance adjusters, paperwork, or any delays in receiving your check.
- No increase to your premium: Car insurance companies often increase your rates following a claim, even if the accident wasn't your fault.
- A favor to the other driver: They avoid penalties such as points on their license or insurance rate increases.
The cons of filing privately include:
- No guarantees: The other party may not pay in a timely manner. If they ghost you or never pay, you have limited recourse.
- Risk of hidden damage: You may be on the hook for additional repair bills if the other driver refuses to pay for damage that wasn’t apparent at the time of the accident. This can include issues that crop up months later.
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How to skip insurance — safely
If you're considering accepting private payment rather than filing an insurance claim, there are steps you must take to protect yourself.
Get everything in writing
Make sure to get the driver's full name, contact information, license plate and driver's license number. Write up an agreement detailing the time and date of the accident, the damage, estimated costs and their commitment to pay by a certain due date.
Document the damage
Take photos and videos of the damage to your vehicle, as well as any damage to the other vehicle. Make sure to get every angle and include images of the surrounding area as well.
Get an estimate before you accept payment
Don't guess what the repairs will cost. Take your vehicle to a trusted mechanic or auto body repair shop before agreeing to payment. If the damages turn out to be more extensive than expected, consider filing an insurance claim.
Set a firm payment deadline
If the other party wants to pay in full, agree on a firm deadline for payment. If they want to pay in installments, write up a payment schedule and keep records of all the payments received. If you have any doubt about their ability or willingness to pay, ask for payment in full or file an insurance claim.
Know your insurance's rules on reporting an accident
Some insurance companies (and states) require you to report an accident or damage within a specific number of days with your local DMV or law enforcement agency as well as to your insurance, even if you don't plan to file a claim. Make sure to follow the rules, or you may risk losing your policy.
This means that you might have a short window of time (as little as 24 hours) to decide and confirm the other side is truly going to hold up their end of the bargain.
Settling up privately can work, but only if you're cautious, thorough and realistic. If you're uncertain about the damage, liability, or the other party's ability to follow through, insurance may still be your safest bet.
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Danielle is a personal finance writer based in Ohio. Her work has appeared in numerous publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love.
