Motor Vehicle Accidents: Should you Report a Potential Claim to an Insurer?

Kanata CA personal injury, family, and real estate law firm

I was at a party out in cottage country and I collided with a parked car while leaving. There was some damage. I thought it looked pretty serious, but the owner said if I paid $500 cash, it would be no problem. Is there any down side to this?

Yes. It is risky to settle financial issues with respect to a property damage dispute on an informal basis.

The first issue is your insurance protection. If you think you may have to make an insurance claim, then you risk voiding your insurance coverage by taking any steps to settle without the express consent of your insurer.

Secondly, without proper documentation to evidence your agreement, there is a risk that your payment will not be viewed as a final settlement, particularly if there is more damage than the payment would cover, giving rise to a finding of improvident settlement.

If in doubt, you should always report a potential claim to your insurer. Absent insurance, you may want to consider hiring a lawyer to draft a release. At the very least, you should evidence a settlement agreement in writing.