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Auto Insurance Claims/Auto insurance claim vs. direct payoff


QUESTION: I was involved in a fender bender the other night, my first accident in 36 years of driving.  The other party and I plan to settle privately rather than put in an insurance claim.  My question is, what is a reasonable break point to settle privately versus putting in a claim, so as not to be at a disadvantage due to premium increases.  The other party consulted a friend who is an insurance adjuster for a major company, who came up with a figure between $1500 and $2000 for the repair.  My deductible is $250.  What would you suggest:  file a claim or pay it privately?  One other consideration is that my daughter recently totaled one of my cars, and I'm already expecting higher premiums just due to that.


ANSWER: David, First of all I'm not sure who was at fault. You or the other driver and who owes whom?

If it was you, and you had a prior loss recently, I understand your concern but without knowing additional information such as where you reside, what year make and model of your vehicle etc, I can't provide you a reasonable answer.

Before deciding, If it's your vehicle needing repair; I would suggest you find a quality repairer and get a very accurate estimate of a proper repair with quality parts and materials. Keep in mind, oftentimes the full extent of the damages aren't known until the repairs have been completed due to various issues from hidden damages to parts price differences etc. You won't want any surprises later.

As for rates going up, your rates wouldn't likely be raised if you weren't at fault.
If you make a claim against your insurer, the $250.00 deductible is low and a small price to pay for extensive damages.

Additionally, if you weren't at fault, you would be entitled to Diminished Value (DV); the difference between what your vehicle was worth prior to the loss and the value after repair. If the vehicle was fairly new with no prior losses/damages, you could be entitled to thousands in DV.

of course if you were at fault, you may be liable for DV too...thus it may behoove you to allow your insurer to take care of the damages and claimed losses such as DV and rental costs.

We have insurance to give us "peace of mind".

I hope I've been of some help. Good luck in whatever you decide.


---------- FOLLOW-UP ----------

QUESTION: Thanks Barrett.  I realized after sending that I had omitted some critical info, so let me backfill.  I was clearly at fault in this incident (Baltimore County, MD).  My vehicle ('97 Dodge Caravan) got some "minor" dents and scratches, which I will live with; the other vehicle ('03 Xterra) had the front bumper separate on the passenger side, and the owner rightly wants it repaired.  I just don't have any clue how much I can expect my premiums to increase, and what the period of return would be if I just settle with cash up front, assuming the estimate he provided is reasonably accurate.  Can you provide any further advice based on that info?



Thanks for the info.

It would be difficult to speculate on savings or not due to a lack of information on the insurer's underwriting guidelines and such and you really can't rely upon your insurer or agent for sound advice as they don't want you making claims if they can help it.

I would have a quality repairer, you and the other party can trust prepare a solid estimate of the repair costs and being an 03 model, I would suggest seeking used parts if available and in like condition to properly restore the vehicle.

Once you know the cost to repair, then you can judge your best option.
Let's say your premiums go up 10% per year for 4 years before they begin to recede...(if they ever will due to inflation), this will give you some idea of what your looking at.

I would suggest you do it quickly before the other party gets nervous and calls the authorities and your insurer.
Do Unto Others...

Hope this helps!

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Barrett Smith


Auto Claim and Collision Repair issues including quality and thoroughness of repair, Diminished Value, Total Loss settlement valuation, Appraisal Clause matters, Expert Testimony, pre-purchase inspections and others. While having been a Senior Claims Adjuster, I am not licensed to practice law and cannot provide legal counsel. I will provide replies as friendly and informal advice based upon my experiences and those of our clients as possible. For more information on our offerings please visit For more informatin on our offerings please visit


I grew up working in a family owned auto body repair business my father owned and operated in Alaska and after leaving the US Air Force I started my own repair facility in Florida. I later became a senior claims adjuster for a national auto insurer and later managed two GM dealership collision centers. I started another shop which was recognized as a "Top Shop" in central Florida for over 15 years winning numerous local accolades and awards such as Business of the Year. In 2001 I developed Auto Damage Experts to provide its services nation wide and to all segments illustrating balance and equity for all ADE clients. For more information please visit

ASA (Automotive Service Association), SCRS, CCRE and others... For more information please request CV or visit

Local and national publications including but not limited to Auto Body Repair News (ABRN), Body Shop Business (BSB) and others. For more information please request CV or visit

ASE Master Certified in collision repair/refinishing including damage diagnosis and estimating. Please request CV or visit

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As a quality Collision Repair facility owner, we received Top shop, Small Business of the year and other awards and accolades. Please request CV for additional information in this regard.

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ADE provides services to all segments including Legal professionals, Consumers, Auto Dealers, Insurers, Governmental and judicial entities. For more information please request CV or visit

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