Do I have to report every car accident to my insurance company?
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UPDATED: Mar 13, 2020
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You are in a minor “fender bender” and the other party is willing to take cash to settle the damages. Do you really need to report this accident to your insurance company? Will reporting it make your rates go up, even if you do not file a claim? What if you do not have a police report? These are questions that many people ask when involved in a small accident.
First, let us look at the standard answer. You should always call the police, and you should always notify your insurance company of any accident, however minor. The reason for this attitude is simple: without a police report or a notification to your insurance company, you could be staring at a small claims lawsuit six months from now which you have no chance of winning, and which will cost you hundreds or thousands in out-of-pocket expenses.
Now, for the “real” answer: you can choose not to report an accident which is taken care of informally, but there are risks involved of which you should be aware.
Fender Bender Accidents
Many fender bender accidents are so minor there is no visible damage. In cases like this, people often choose to wave off the accident, saying that they are not interested in pursuing a claim. Even if there is slight damage, some people just do not want to be bothered with getting the car fixed, or feel sorry for the other driver and do not want to cost him or her any money.
However, this attitude may change quickly if the victim discovers that there was damage which was not visible and is going to cost a great deal to fix. In that case, the victim may change his or her mind about not wanting to pursue a claim, and may contact the other driver wanting payment for the damages.
Do not let the Proof disappear
This leaves the at-fault driver in a seriously compromised position. First, if the police were not called, there is no real “proof” of what happened in the accident. A small claims court will have to go by the statements of the drivers and the damage to the vehicles, trying to piece together the truth from conflicting stories. Further, if the at-fault driver did not notify his or her insurance company, the company could well deny the claim in the future, causing the at-fault driver to have to pay out of pocket for any damages awarded to the victim.
This problem extends in the other direction, as well. By refusing to call the police or file with the at-fault driver’s insurance company, you as the victim are taking a chance that there is no real damage to your car. If you find out there is damage later, it may be too late to collect without a complicated small-claims court struggle. You also do not have proof that the at-fault driver was, indeed, at-fault, and you may not win a court case without that proof.
All in all, it is usually better to let the police sort it out if you are involved in any accident, no matter how minor. A police report protects both the victim and the at-fault driver by documenting what happened in the accident.
Will my car insurance rates always go up by reporting a car accident?
Notifying your insurance company will not raise your rates if no claim is filed. Car insurance companies base rate increases on actual events, so they cannot justify raising your rates if you or the other driver make no claims. Of course, they may hold the accident “open” for some time to be sure that all claims are satisfied; during that time, it is possible your premiums might be altered, although this is highly unlikely.
Notifying your car insurance company is as simple as placing a phone call to your agent or to the company itself. The insurer will probably want a copy of the accident report, and will file that away until a claim is made. If you were the victim and you choose not to file a claim against the at-fault driver’s insurance company, be sure to talk to your own insurance company first. Your agent or company may have information for you that might alter your decision not to file a claim. If the other driver was uninsured, your own company will handle your claim under your “uninsured motorist” coverage.