Following a car accident, there are some situations in which a driver should consider not using insurance to repair their vehicle. Car insurance is great to have, and all states require that a certain minimum amount of liability insurance be carried by vehicle owners. Car insurance is there to protect you from loss, and to pay for damage that you may have caused to the property of others in the event of a motor vehicle collision. However, there are some circumstances when it is beneficial for a customer to consider not using insurance.
Minor Damage Following a Single Vehicle Collision
A single vehicle collision is one in which only your vehicle is involved in a collision, usually with a fixed object such as a post or the wall of a garage. The driver of your vehicle would be considered at fault under such circumstances, and so your premiums could be raised if you were to use your insurance policy. It is also possible that you could lose lucrative discounts such as a good driver discount.
If your single vehicle collision caused minor damage to your vehicle, then going through insurance may not be your best option. There are factors to consider such as the amount of your deductible and also the amount of damage to the vehicle. If the amount of damage to the vehicle is less than your deductible, then you should definitely think about not using insurance.
The Other Party is Willing to Settle Out of Pocket
When the driver of your car has caused a collision which resulted in damage to someone's property, you may have the option of settling out of pocket with them. Not using insurance under these circumstances might save you money. It depends on how much damage you caused to the other party's property, and how much your premiums would be raised by your insurance carrier. Also, the other party must be willing to accept a settlement outside of insurance. You cannot force the other person to settle without involving insurance.
When discussing an out of pocket settlement with the other party, be sure to take certain precautions to protect yourself. Obtain more than one estimate on what it will cost to fix the damage in question. Do not pay cash. Only pay using a personal check, cashier's check, or money order so that the payment is documented. Also, draw up a written agreement with the other party which states that they have accepted "payment in full".
There are definitely certain circumstances you should consider not using insurance. Car insurance is there to protect you, but there are times when it makes financial sense to not use your policy.