Insurance vs. Out of Pocket: How to Handle Moderate Car Repairs

Insurance for new drivers is extremely expensive and a moderate accident will only cause your insurance rates to become more costly if you make a claim on any incidents before your child reaches the age of 21. If you have a young driver who is in a mild car accident, for example if he hit a parked car or caused a mild fender bender with little damage, you may want to negotiate paying for any damages out of pocket to avoid an increase in your insurance premiums.

If this is your plan of action, you will want to make sure your child knows what to do in advance. So long as no one is hurt, instruct them to call you immediately. It is best if they don't admit guilt or offer any information to the other driver. Instruct them to simply tell the other driver that they have called their parent and a parent will be there shortly to speak with them about the damages. If you can't get away from work or get to the scene of the accident in a reasonable time, you may want to speak with the owner of the damaged vehicle on the phone and reinforce to your child to remain silent as much as possible.

Unless you feel your child can handle the situation on their own or you plan to report the accident to your insurance company, you may want to make a trip to the scene yourself to see that the situation is handled properly. In addition, your child may be a little shaken up, embarrassed, or nervous about getting behind the wheel again and having you with them in this time of distress will be reassuring. You may even want to follow them home after all is taken care of or bring an extra driver that can drive them home so they can have a chance to normalize after the stress of the situation before getting behind the wheel again.

Whether you go to the scene physically or just speak with the other driver, you want to discuss the option of paying for the damages out of pocket if at all feasible. Explain to them that your child is a good kid and just made an inexperienced mistake. If they could find it in their heart to allow you to pay for the damages, you would appreciate it if they didn't contact your insurance company to report it.

You will want to get photos of the accident as well. Have several individuals take photos using their cell phone to include your child, the other driver, and if you can be there, take some yourself. Having multiple photo's taken by all parties will ensure a fair view of the damages before an estimate is provided by the body shop.

Offer to call a collision center to determine the estimated cost of damages. Identify to the collision center the type of vehicle that sustained damages including the year, make and model, and if it is a 2 or 4 door, and the parts of the vehicle that were damaged. Most body shops will not provide you with an estimate over the phone, but you can ask them what the market price is for each part you think needs repaired and what they charge per hour for labor, add it up and get a rough idea. Then you will be able to make a better decision about paying out of pocket or making the dreaded insurance claim.

You may want to explain to the collision center your situation and that you intend to pay for the damages to the vehicle that is in need of repair. Let them know you don't want to claim it on your insurance and that since you are paying out of pocket you would deeply appreciate a fair price. Most shops, especially locally owned centers, will be willing to work with you. Give the collision center your information and ask them to give you a call once the damage is assessed and an estimate for the repairs is done. If you can do this within hearing range of the other driver they will be more likely to trust you and work with you. You can then offer to put them on the phone with the repair center so that everyone is on the same page. They can work out the details for taking the car to the shop and getting the estimate. Give them your personal phone number and ask them to call you when they decide what they are going to do.

Sometimes, people will trust enough to work things out without getting a police report. However, if the other driver insists, have an officer come to the scene and take an official report of the incident. The police report in itself will not cause an increase in your insurance rates. As long as you stay with the same insurance company and no claim is filed, your premiums will not change. If you did decide to change carriers, you might be in a bind if the application asks if there has ever been an accident. If you answer "no" you could be charged with fraud. However, if the question asks, has he ever made a claim, you can still answer "no."

If the driver of the other vehicle agrees to allow you to pay out of pocket without reporting to your insurance company, thank them dearly as they are a godsend. Their understanding and empathy could save you thousands in premiums over the course of 5 years on a new driver with an accident in the first 3 years.