Is It Illegal to Pay Out of Pocket for a Car Accident?
If you have a minor car accident, you may think you could save money by just paying for repairs out of pocket, rather than contacting your insurance company. It is not illegal to do so in certain situations, but it can affect your ability to retain insurance in others.
That is because your insurance policy is a contract, and you agreed to abide by it. Every insurance policy requires that the policyholder report any accident immediately. If you fail to report a claim, the insurance company can cancel your policy. The insurer can also refuse to pay a claim if one arises from this incident.
From a monetary perspective, it may make sense to not file the claim if the repairs are less than your deductible. Even if the repairs cost slightly more than the deductible and the insurance covers it, you could end up with a higher premium. That is especially true if you filed other claims recently. It does not make sense, however, to do something that can come back to haunt you from a liability perspective.
A Southern California car accident lawyer at Ellis Injury Law can advise you on what actions to take if you paid for an accident out of pocket and are now involved in a dispute with your insurer. We can negotiate with the insurance company on your behalf.
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Minor single car accidents
Perhaps you backed up into a tree on your property. The dent is not that large, and you figure repair costs are less than your deductible. Maybe you scraped your vehicle along the side of your garage. Under these circumstances, there is no need to inform your insurance company.
However, if you backed up into a tree on another person’s property, or into someone else’s garage, fence, or other structure, reporting the accident to the insurance company is necessary. It is possible that the collision caused damage to the item hit.
Minor two car accidents
After a fender bender, the drivers involved might talk it over and decide not to report the incident to their respective insurance companies or to law enforcement. While it is tempting to avoid a possible spike in premiums or points on a driver’s license, this is a mistake.
If the other driver changes their mind or discovers the damage was greater than originally thought and reports the collision to their insurer –and has your contact information– your insurance company may refuse to cover the damage. You would indeed pay out of pocket, but the money would go toward the other driver’s repair costs and possibly any medical bills. Whiplash is a common injury in low-impact crashes, and the pain and stiffness may not appear for a couple of days after the collision.
There is another scenario that plays out too frequently. The other driver says you were a hit and run, leaving the scene of the accident. That is illegal, and you could face fines or even jail time.
Under California law, any car accident resulting in more than $1,000 in property damage or any fatalities or injuries requires reporting to the California Department of Motor Vehicles within 10 days. From a property damage perspective, even minor vehicle damage may cost more than $1,000 to repair.
You must also report a car accident to the California Highway Patrol or the police department overseeing the accident scene if the vehicle incurred more than $1,000 in damage.
After any type of serious car accident, obtain legal counsel as soon as possible. Car accident attorneys know a reasonable settlement amount for the injuries and property damage involved.
Contact an experienced Los Angeles car accident lawyer
If you decided to pay for damage to your car out of pocket and are dealing with insurance company issues, you need the services of an experienced Los Angeles car accident attorneys at Ellis Injury Law. We offer free consultations. Arrange an appointment by submitting our online contact form or calling or texting 24/7.
After reviewing your claim and your policy, we will discuss your options. Over the past 25 years, we have represented thousands of clients in car accident cases, and our track record speaks for itself.