Why You Should Report a Minor Accident to Your Insurance Company

It happens frequently: after a car accident with no injuries and negligible damage, the involved drivers agree upon a settlement without involving their respective insurance companies and minus the official police report. Unfortunately, too many times this arrangement just does not end well. According to the experts, the only way that you can be assured that you will get compensated for the damages is to file an insurance claim. Take the following incident for a prime example of the above. I was minding my own business as I drove down the quiet, rural street where my home is located. Suddenly, I felt the force of a crash as another vehicle collided into me from behind. I exited my car to view the damage. To my surprise, the other driver - the one who had caused the accident - was my good friend and neighbor. "Sorry," said John with a sheepish smile. "Don't worry about the damage, I'll take care of it personally. Let's not involve the police or the insurance companies. This way, there's no risk of an insurance premium increase, as often occurs after making a claim." At the time, it didn't occur to me that there would be any problem with this arrangement. After all, John and I were friends, neighbors that met on a regular basis. "Sure," I responded. "If that's the way it works best for you, I'll go along with it." Well, the story did not end on a happy note. I got the back fender fixed and sent my receipt to John, with no thought that there would be anything to worry about. I was wrong. It's been 60 days since the accident, and I have yet to receive recompense from John who has no shortage of excuses and promises that the payment is coming... The above scenario repeats itself time and time again after minor collisions.

 Drivers, beware! Even if the other driver is your friend, neighbor or a trusted acquaintance, there is never 100 percent assurance that you will see payment for the damages he or she caused. In an instance where the liable driver does not honor his or her monetary commitment, time has elapsed and it may be too late to offer adequate substantiation in regard to damages and who is at fault 

Besides, the liable driver may betray your trust and report the accident to his or her insurance carrier. He or she may go even further with the betrayal by twisting facts and actually lying about injury claims that never were present at the time of the accident. If this occurs, your insurance company may have to ship out a large payment. It may also initiate a lawsuit against you, as well as forcing you to pay the remainder of what the courts deem your obligation after your insurance company has reached the limits of your policy's coverage. Lastly, you will be in for an unpleasant premium increase.

The Insurance Take on an Accident by the Person You Lent Your Car to I had to empathize with my friend. Poor guy: out of the goodness of his heart, the man lent his vehicle to a relative. And then, his relative got into a major accident, resulting in two totaled vehicles - the car he had borrowed from my friend and the truck he collided into! For those uneducated in the matter, when you lend your car to someone else, that driver is referred to as a permissive driver by the insurance industry.

 If a permissive driver causes an accident, here's how the insurance companies will respond. Auto Insurance and an Accident Caused by a Permissive Driver If you gave permission to someone not listed as a driver on your auto insurance policy and that person causes a car accident, the procedure is generally as follows. 1. In the event the driver and the car owner have individual auto policies, the car owner's insurance will pay for damages under the collision part of the coverage - after any required deductible is paid out-of-pocket by the policyholder. 2. If there are significant property damages as well as bodily injury to the other driver or his or her passengers or pedestrians, the car owner's insurance will cover the damages as well as any legal fees of an associated lawsuit filed against the car owner. Insurance payouts are subject to the limits on the policy.

If the limits on the car owner's policy lead to an outstanding balance, the driver of the borrowed car can seek compensation from his or her own insurance company to receive the remaining owed funds for the damages. If the borrower of the car to is injured in an accident he or she caused, related payments would generally be covered under the Personal Injury Protection portion of his or her auto policy. In the event, the driver does not have this insurance protection but the car's owner does - coverage will go through that. 3. What if the person who borrowed the car got into an accident but did not have a valid driver's license? In this case, there's a good chance that coverage may be denied. Many insurance company exclude coverage for an unlicensed driver. If this occurs, the car' owner you and the 'permissive driver' will be responsible to pay for all damages as well as court fees if there are any. But aside from related aggravation and possible wallet burnout,policyholders may find their premiums up at time of the policy's renewal.

 Of course, anyone dealing with an experienced independent agency that's appointed to do direct business with many of the leading underwriters have an advantage of working with the edge in the market to locate the lowest premium available under the circumstances.

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