Why you should report a minor accident to your insurance company

It happens frequently: After a car accident with no injuries and insignificant damages, the drivers involved agree to a settlement without involving their respective insurance companies let alone the official police report. Unfortunately, many times this arrangement just doesn’t end well.

According to experts, the only way you can be sure that you will receive compensation for damages is to file an insurance claim.

Take the following incident as an excellent example of the above.

I was minding my own business as I drove down the quiet country street where my house is located. Suddenly, I felt the force of a crash when another vehicle hit me from behind. I got out of my car to see the damage. To my surprise, the other driver, the one who had caused the accident, was my good friend and neighbor.

“Sorry,” John said with an embarrassed smile.

“Don’t worry about the damage, I’ll take care of it myself. We don’t involve the police or the insurance companies. This way, there is no risk that the insurance premium will increase, as is often the case after making 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.

“Sure,” I replied. “If that’s the way it works best for you, I’ll take it.”

Well, the story didn’t end on a happy note. I fixed the rear fender and sent my receipt to John, not thinking there would be anything to worry about.

I was wrong.

It’s been 60 days since the accident, and I have yet to receive the reward from John, who has no shortage of excuses and promises that payment is coming …

The above scenario is repeated over and over again after small collisions.

Drivers, beware!

Even if the other driver is your friend, neighbor, or a trusted acquaintance, there is never a 100 percent guarantee that you will see payment for the damage you caused.

In a case where the responsible driver defaults on his monetary commitment, time has elapsed and it may be too late to provide adequate justification regarding the damages and who is at fault.

Also, the responsible driver may betray your trust and report the accident to your insurance company. He or she can go even further with treason by misrepresenting the 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 send a large payment. It can also start a lawsuit against you, as well as force you to pay the remainder of what the courts deem your obligation after your insurance company has reached the limits of your policy coverage. Lastly, you will encounter a nasty premium increase.