Can car accidents be resolved without insurance companies?
In short, yes, they can. Minor car accidents that leave no one injured often go unreported to insurance companies and are settled privately between drivers. By doing this, drivers can avoid the stressful process of having to deal with an insurance company, having their insurance rates increased, and being limited to certain auto repair shops that the insurance companies have preselected. The drivers must agree to keep insurance companies uninvolved, and if one driver is set on notifying their insurance company, the other driver can assume that their insurance company will also be notified. When those involved in an accident decide to settle the matter privately, it is still important to gather evidence and document the events. Take pictures of both vehicles and the place the accident occurred, write down the other driver’s contact and vehicle information, and file a police report which will detail the events and those involved in an official document. However, if you are the at-fault driver, only take pictures if the other party is also taking pictures, and let the other party notify police if they choose to do so. You do not want to make evidence that could potentially be used against you later. When deciding where to have the vehicle fixed, be sure to get multiple quotes from different auto shops to get the best deal. After repairs are made and money is exchanged between the drivers, the paying driver should have the driver that is being paid sign a release of claims form, that states that the driver paid for the damages out pocket.
Only simple car accidents should be settled without insurance companies because there are also risks involved. There is the risk that the other driver does not actually have any money and cannot pay for the damages to your vehicle that they promised to pay. Most insurance companies require that their insured report accidents within a “reasonable time,” with no strict guidelines on what that means. Not reporting an accident could potentially cause a driver to lose their ability to later file a claim if the insurance company feels the driver waited too long. Also, just because drivers initially settle minor damages that resulted from a car accident privately does not mean that one driver cannot sue the other driver later in court for medical bills and pain and suffering. If there are injuries that were caused by the accident or substantial damage to either vehicle, it is best to notify insurance companies.