It happens regularly: after a car accident with no injuries and negligible damage, the drivers involved agree a settlement without the intervention of their respective insurance companies and minus the police report. Unfortunately, this arrangement all too often does not end well.
According to the experts, filing an insurance claim is the only way to be sure that you will be reimbursed for the damage.
Take the following incident for a good example of the above.
I minded my own business as I drove down the quiet country street where my house is. Suddenly I felt the force of a crash as another vehicle hit me from behind. I got out of my car to inspect the damage. To my surprise, the other driver – the one who caused the accident – was my good friend and neighbor.
“Sorry,” John said with a sheepish smile.
“Don’t worry about the damage, I’ll take care of it personally. Let’s not call in the police or the insurance companies. That way you don’t run the risk of an insurance premium increase, as often happens after a claim.”
At the time, it didn’t occur to me that there would be a problem with this arrangement. After all, John and I were friends, neighbors who met regularly.
“Of course,” I replied. “If that’s the way it works best for you, I’ll go with that.”
Well, the story didn’t end on a happy note. I repaired the rear fender and sent my receipt to John, not thinking there would be anything to worry about.
I was wrong.
It has been 60 days since the accident, and I have not yet received any compensation from John, who has no shortage of apologies and promises that payment will be forthcoming…
The above scenario repeats itself over and over after minor collisions.
Even if the other driver is your friend, neighbor or a trusted acquaintance, there is never 100 percent certainty that you will compensate for the damage he or she caused.
In the event that the liable driver fails to honor his or her pecuniary commitment, time has passed and it may be too late to provide adequate substantiation as to the damages and who is at fault
In addition, the liable driver may betray your trust and report the accident to his or her insurance company. He or she may take the betrayal even further by distorting facts and actually lying about injury claims that were never present at the time of the accident. If this happens, your insurance company may have to make a large payment. It can also file a lawsuit against you and force you to pay the rest of what the courts deem your obligation after your insurance company reaches the limits of your policy’s coverage. Finally, you will have to deal with an annoying premium increase.