Automotive

Settle a claim or go through insurance?

  • Last Updated:
  • May 2nd, 2011 4:10 pm
Newbie
Oct 2, 2009
25 posts
Toronto

Settle a claim or go through insurance?

Anyone have insight to share on this?

- We were involved in a minor minor accident - we touched (won't even call it a hit) a car's back bumper while stopped at a red light. There was no damage obviously visible on his car. Nothing visible on my car.
- He got a couple of quotes and has offered to accept $500 cash settlement.
- I don't mind settling or going through insurance. Obvioulsy I would prefer that insurance not go up as a result, but if that happens then so be it.
- My question: If I settle with him, what is there to then keep him from coming back 6 months for now and suing ME for personal injury, etc? Even if I get him to sign a letter, there likely will always be a loop hole that some lawyer could get around (whether legitimately or for the sake of making money).
- My insurance co said the only way to get relevant advice is to file a claim and then speak to the adjuster. But at that point, will there be a strike against me (even if I end up paying him cash and no claim ultimately gets filed by the other party?).

I've heard a few cases recently where people are suing where obviously there wasn't a legitmate claim - just to make money. Does this essentially mean that nowadays no one sshould settle privately?
13 replies
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Mar 13, 2004
7475 posts
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Going through insurance on this is probably not the best choice since you're rates will go up. At this point all you can really do is pay the money and get him to sign a document saying he cannot sue you after and that because the hit was so minor there is no way possible he would have an injury cause by it and so on. Basically you want to put everything in that document that you can think of to cover you're ass just in case he does come back in the future. Or if you are really concerned get a lawyer to write something up to cover your ass just in case.

But in my opinion if you write out a good document explaining the accident and exactly what happen and how it was such a minor bump with no damage so on and so on by him signing it that will at least give you a good chance in court if it was to ever come to that in the future (which I doubt)

edit: maybe even get a body shop to look over it and be a co-signer saying that there was no damage so i there is no damage to the car there is no way possible the other person could get injured. Sure hes not a doctor but really another person would only strengthen you're case.
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Apr 14, 2007
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How about write an agreement where the case is settled for $500 and they can not go though insurance or claim any injury in the future. I'm sure you can sign it and have him sign it and make copies of it and keep it for future references so if he ever complains in the future you have a document proving that he accepted the terms of agrement
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Mar 13, 2004
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gnuman wrote:
Apr 24th, 2011 2:41 pm
How about write an agreement where the case is settled for $500 and they can not go though insurance or claim any injury in the future. I'm sure you can sign it and have him sign it and make copies of it and keep it for future references so if he ever complains in the future you have a document proving that he accepted the terms of agrement

Did you bother reading his Post?
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May 2, 2010
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jollygreengiant wrote:
Apr 24th, 2011 1:50 pm
Anyone have insight to share on this?

- We were involved in a minor minor accident - we touched (won't even call it a hit) a car's back bumper while stopped at a red light. There was no damage obviously visible on his car. Nothing visible on my car.
- He got a couple of quotes and has offered to accept $500 cash settlement.
- I don't mind settling or going through insurance. Obvioulsy I would prefer that insurance not go up as a result, but if that happens then so be it.
- My question: If I settle with him, what is there to then keep him from coming back 6 months for now and suing ME for personal injury, etc? Even if I get him to sign a letter, there likely will always be a loop hole that some lawyer could get around (whether legitimately or for the sake of making money).
- My insurance co said the only way to get relevant advice is to file a claim and then speak to the adjuster. But at that point, will there be a strike against me (even if I end up paying him cash and no claim ultimately gets filed by the other party?).

I've heard a few cases recently where people are suing where obviously there wasn't a legitmate claim - just to make money. Does this essentially mean that nowadays no one sshould settle privately?

If you're so worried, just go through insurance.

If you have spoken to your Insurance company about it, then you already reported an at fault accident (doesn't matter if you make a claim or not). I guess you talked to your Insurance Broker, not your insurance company.

If it's minor minor like this, I'd settle for the cash settlement /w signed agreement. There's nothing for him to gain for coming back on this to make false claims of injuries, etc.
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Jan 31, 2010
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If there is no damage, why pay anything? I've had someone touch my car before (dummy reversed in a drive-thru) but there was no damage, so I didn't ask for anything... why pay when he's not out anything? Whats the $500 for? What were the quotes for?
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Feb 7, 2006
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jollygreengiant wrote:
Apr 24th, 2011 1:50 pm
Anyone have insight to share on this?

- We were involved in a minor minor accident - we touched (won't even call it a hit) a car's back bumper while stopped at a red light. There was no damage obviously visible on his car. Nothing visible on my car.
- He got a couple of quotes and has offered to accept $500 cash settlement.
- I don't mind settling or going through insurance. Obvioulsy I would prefer that insurance not go up as a result, but if that happens then so be it.
- My question: If I settle with him, what is there to then keep him from coming back 6 months for now and suing ME for personal injury, etc? Even if I get him to sign a letter, there likely will always be a loop hole that some lawyer could get around (whether legitimately or for the sake of making money).
- My insurance co said the only way to get relevant advice is to file a claim and then speak to the adjuster. But at that point, will there be a strike against me (even if I end up paying him cash and no claim ultimately gets filed by the other party?).

I've heard a few cases recently where people are suing where obviously there wasn't a legitmate claim - just to make money. Does this essentially mean that nowadays no one sshould settle privately?

insurnace protects you from being personally sued up to an amount.
If its an issue, just sign a release saying that the $500 releases you from any damages in the future.
Sr. Member
Aug 31, 2008
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Thornhill
sounds like there is no damage what so ever.. where did this $500 quote come from? if anything the guy just wants to make some cash out of this.
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May 2, 2010
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trky wrote:
Apr 24th, 2011 3:25 pm
sounds like there is no damage what so ever.. where did this $500 quote come from? if anything the guy just wants to make some cash out of this.

$500 for OP is a big break. Even if there's no obvious damage, if two cars collide there will be some damage, and as in this case it would be some minor scratch.
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Feb 15, 2008
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Check your insurance contract; you may be actually obliged to report any events that have a bearing on your risk to the insurer, including, but not limited to, accidents for which you have a financial responsibility, even if small. Failing to do so could be grounds for recission of future coverage.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
[OP]
Newbie
Oct 2, 2009
25 posts
Toronto
Thanks for the feedback. Some additional thoughts - might be helpful for someone else in a similar situation in the future.

- What I'm concerned about is a lawyer finding some loophole in our written "settlement agreement". Seems like there is a way around everything these days!
- It all goes back to the intention of the other guy. If one day someone tells him a story about how their neighbour made money in a suit after an accident, that might spark his interest and go for it.
- It's unclear to me what the damage was - perhaps a scratch after a thorough cleaning and buffing? I doubt he would undertake any type of repair and just pocket the money. I suppose though that is his decision.
- On initial conversation, no claim was opened up on our end. Insurance co advised that the choice is ours - no legal /contractual obligation to file the claim.

Does anyone know ... At what point is there a "strike" against the driver (e.g. # "stars" reduced)? What if I report it and pay the guy $500. If he never reports it to his insurance company would there be a strike against me? Or is it only when there is a "cost" to my insurance company that I am penalized?
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May 5, 2005
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Mark77 wrote:
Apr 24th, 2011 4:14 pm
Check your insurance contract; you may be actually obliged to report any events that have a bearing on your risk to the insurer, including, but not limited to, accidents for which you have a financial responsibility, even if small. Failing to do so could be grounds for recission of future coverage.

Some rare good advice. This is what most people on here call people "jerks" for doing.
Sr. Member
Jun 12, 2007
742 posts
53 upvotes
jollygreengiant wrote:
Apr 24th, 2011 10:51 pm
- On initial conversation, no claim was opened up on our end. Insurance co advised that the choice is ours - no legal /contractual obligation to file the claim.
Did you give them your name and policy number when you discussed the matter with your insurance company? If yes, then it's too late to be asking if you should settle outside of insurance - they already have you on record as being a part of an accident.
As for the other question - if you settle outside I think you souldn't sign any documents at all and payment should be cash strictly. The reason is, no laywer can find any "loophole" on something that doesn't exist (written settlement) about something that never happened (accident with no police or insurance company involvement). 6 months later it's going to be his word agains yours - good luck to him with that and his non-exsiting evidence on his bumper. Again, if you already called your insurance then 99% you'll be throwing $500 down the drain because the damage you're trying to avoid - having an accident on your record, is already written down on your record!
[OP]
Newbie
Oct 2, 2009
25 posts
Toronto
OP here.

Thanks for the insight everyone. We ended up paying the other party the amount requested and both parties signed a waiver that we (together) wrote.
As an aside, insurance co did indicate that decision was ours as to whether to formally report or not. Perhaps there is a clause (e.g. damage > x$ or if there is personal injury) when claim must be reported. Didn't seem to be mandatory for something so minor.

Hoping that's the end of it. And we'll be more careful!
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