If you were just in an accident, whether it be a serious or minor accident, you may be wondering what to do if the at-fault driver wants to pay out of pocket. Should you accept their offer, or should you involve insurance and file an insurance claim?
In short, isn’t our recommendation to accept the other driver’s offer, as it comes with risks. In addition, there are situations where you are legally obligated to report the accident.
This article will go into detail about things like paying out of pocket, car insurance and how to get paid to get your car fixed.
Is It Illegal to Pay Out of Pocket for a Car Accident?
When you are involved in a minor accident, you may be tempted to pay out of pocket and not report the accident in order to avoid your insurance rates or driving record being affected. You may be wondering, “is it better to go through insurance or pay out of pocket?”
If you’re wondering about paying cash instead of going through insurance to avoid reporting an accident, you should know that there can be serious consequences for doing so. So, if you’re thinking “should I pay out of pocket for car accident damage,” the answer is no.
There are legal obligations involved regarding accidents. For one, if anybody was killed or injured in the accident, you’re required in California to report the accident to the police or other law enforcement within a time span of 24 hours. This includes not just those in vehicles when the accident occurred, but anybody else injured or killed, such as motorcyclists, bicyclists or pedestrians. Failing to report such an accident can lead to hit and run charges – misdemeanor hit and run could cost you six months in jail and a $1,000 fine, and felony hit and run could cost you four years in prison and a $10,000 fine.
Also, if any injuries, fatalities, or $1,000 or more in property damage occurred in the accident, you are legally obligated to report the accident to the DMV within a time period of 10 days. This includes property damage to vehicles or other property like fences or buildings. Failure to report such an accident can lead to a 1 year suspension of your drivers license.
In addition, you need to report the car accident to your insurance carrier. This isn’t a legal mandate – it has to do with the terms of your insurance coverage policy. Failing to notify your own insurance may cause your insurer to later disclaim or deny coverage for all damages, including third party injuries.
When You May Pay Out of Pocket
A chance exists that your premiums will be increased by your insurance company if you end up filing a claim. This could end up costing you hundreds to thousands of dollars in the future. If you end up finding yourself in one of the following situations, you can consider paying out of pocket instead of involving insurance:
A Low-Cost, Single-Car Accident
Certain accidents will only involve a single vehicle. As an example, maybe you bumped into something and didn’t damage it, but you dented your door. Or, a branch might have fallen on your windshield, cracking it. Claims like these fall under comprehensive insurance or collision coverage.
These types of coverage involve deductibles ranging from $50 to around $2,000. When repair costs end up being less than the deductible, or slightly more, consider paying out of pocket instead of getting insurance involved.
As an example, say you suffered $400 worth of damage and you have a $300 deductible, so you’d save $100 if you filed a claim. However, your rates might be raised by your insurance company, which would cost you a lot more than $100 long-term.
If you end up paying for body shop costs yourself, ensure you have an accurate estimate. You will not be capable of filing a later claim if your repair shop costs end up being more than you expected. This is because insurers require that drivers report accidents and end up submitting claims in a certain time period. Read your policy to check for details.
You do not have to report accidents when you’re the only one involved, no injuries are involved, you didn’t cause over $1,000 worth of property damage to someone else’s property and you’re capable of paying for repair and medical bills yourself.
However, when pedestrians are struck, this must always be reported.
A Minor Car Accident Where You Trust the Other Driver
If you end up getting in a crash with a single other driver that involves minimal damage, you might agree not to get insurance involved. This way, you and the other driver can avoid increases in rates. However, we don’t advise doing this unless you trust the other driver not to change their mind.
Unless the other driver is someone you know or you have a good reason to put your trust in them, we recommend that you call your car insurance company even when two-car accidents are minor.
The Risks of Accepting a Cash Offer After a Car Accident
Another driver may try to prevent you from making a claim with insurance by making a cash offer at the accident scene. They might even refuse to provide their insurance info. Without this info, you can’t make a claim for damages.
Any cash the driver offers is just an estimate of how much money you’re entitled to for injuries, pain, suffering, property damage and medical bills. You’re not yet aware of how badly you’re injured or how much it will cost to repair your vehicle. Many injuries don’t show themselves until days after accidents, at which point the other driver is long gone.
Your time spent recovering may involve out-of-pocket costs like transportation costs or lost wages. These can cost a lot of money and the other driver likely isn’t considering these.
The thing is, it’s considered a settlement when you accept cash. Say you accept cash and end up finding out it’s not enough. You might be able to track down the insurance information of the other driver, but if the insurance company finds out that you accepted a cash offer, your claim may be denied.
You can’t get more money later after accepting a settlement offer, even if more damages are discovered. You can’t ask the insurance company for more. If you accept cash at the accident scene, the insurance company will claim you’ve been compensated already so they’re not obligated to compensate you further.
It can be impossible to fight against this – it’s a lot better to not accept a cash offer and make a claim with insurance.
Worse yet, if you accept cash at the scene, you could end up being the victim of a common scam:
- You accept cash at the accident scene and don’t trade insurance or contact info. They might claim it’ll be a lot easier, or attempt to make you feel sorry for raising their rates.
- Once you leave, the scammer will make a fraudulent claim, claiming you committed hit and run. You might even get a notice from a lawyer suing you saying you did this.
- Without having evidence of an insurance or police report, it’s very tough to prove you didn’t commit hit and run, and fault may fall upon you since it will look you committed hit and run.
When You Must Report a Car Accident to Your Insurance Company
Every insurance policy is different regarding when you must report accidents to them. Be careful to read your policy to see when they require you to report an accident.
Often times, policies will require you to report any accident to your insurance company. When in doubt, read your policy.
For example, if you lightly bump into a trash can, slightly denting your car, you may be able to pay that out of pocket. If you run over a tree branch that scratches your car, you may not have to report that.
At the end of the day, however, what your policy says goes.
What To Do After a Car Accident
If you’re involved in an accident, you should:
Get to Safety
Get your vehicle to a safe location which is well-lit if you can. If your car may pose a roadway hazard and you’re capable of moving it, do so, maybe even onto the sidewalk.
Stay calm and make sure other vehicles are alerted to your presence by using hazard lights.
If you can’t move your car, get yourself as well as everyone else involved to safety, away from the accident, but don’t leave the accident scene.
Make Sure the Vulnerable Are Secured
Make sure the vulnerable, like pets, seniors, disabled people and children, are safe. Don’t leave them in hot vehicles after accidents. Don’t remove children from car seats after accidents as they may be injured – allow first responders to remove them from car seats and check for injuries.
If it’s safe for children, incapacitated people or seniors to remain in the vehicle, make sure they remain in the vehicle, even if frightened or agitated.
Call 911
Check everyone involved, including yourself, for injuries. If anyone has even minor injuries, call 911.
File a Police Report
If the police or CHP show up to the scene of the accident, request a copy of the police report from them. This police report may be vital when it comes to trying to recover compensation for damages later on, or protecting yourself in the event that you are sued.
The the CHP or police don’t show up to the accident, visit a police station as soon as possible to file a police report and ask for a copy of it.
Collect the Right Info
Collect the following information:
- Names of all drivers involved
- Contact info of all drivers involved
- Insurance info of all drivers involved
- Driver’s license numbers of all drivers involved
- Type, color and model of all vehicles involved
- Location of the accident
- Photos and videos of all vehicle damage
- Photos of injuries
- Photos of the accident scene, including photos of relevant traffic signals, roadway conditions, etc.
- Contact information of witnesses
- Write down your account of how the accident occurred as quickly as you can since memories fade quickly
Be Careful What You Say at the Scene
Keep conversation at the scene of the accident to the bare minimum necessary to collect the information you require. Don’t say anything else. Be especially careful not to:
- Make admissions
- Apologize
- Express anger
- Blame others
- Accept blame
- Discuss fault regarding the accident
- Discuss possible injuries
- Discuss the amount of insurance that you carry
Get Medical Attention Right Away
It’s important to receive medical attention as soon as possible after an accident, even if you do not think you were injured or injured that badly. The reason why is it’s common not to realize you’re injured after an accident, and the longer you wait to have injuries discovered and documented by a medical professional, the more likely it is an insurance company is going to claim that something else caused your injuries than your accident, thus refusing to pay you for your injuries.
Injured in An Accident? Contact an Attorney
If you have been injured in a car accident, our lawyers can help you recover financial compensation for medical bills, lost wages, pain, suffering, property damage, wrongful death and more.
We have been helping accident victims recover compensation for their injuries since 1990 and have recovered hundreds of millions of dollars for accident victims.
If you can’t afford to have your accident injuries treated, we can get you to doctors who will treat you without charging for treatment until your case ends, since those doctors trust us to get great results for our clients.
We won’t charge any fee to handle your accident case until and unless we obtain a recovery, meaning our only fee is a percentage of any compensation we recover and you’ll never owe us an upfront fee or out-of-pocket fee.
Contact us today for a free consultation if you or a loved one was injured or killed in an accident in California.
Jeffrey Nadrich
Jeffrey Nadrich is a nationally-recognized California plaintiff’s personal injury attorney. He is a graduate of UC Berkeley and UC Hastings College of the Law. He has successfully represented thousands of injury clients over the last 40 years.
