If you’ve hit a parked car and the car’s owner proposes to cancel their insurance claim in exchange for an out-of-pocket payment from you, there are several factors to consider before proceeding:
Understanding the Proposal: The other driver may want to cancel the claim to avoid potential premium increases on their insurance or because they believe the repair costs are lower than their deductible. For you, paying out of pocket could prevent your own insurance rates from rising.
Documenting the Agreement: If you agree to settle the matter out of pocket, ensure this agreement is documented in writing. The documentation should include detailed terms, the agreed-upon compensation amount, and any pertinent timelines.
Assessing Repair Costs: Before agreeing, ensure that you have a precise estimate of the repair costs. This may involve obtaining a quote from a reputable auto repair shop. Ensure that the amount you agreed upon will fully cover the necessary repairs.
Legal Implications: Consult with your insurance provider before making payments. Some policies require that any incidents be reported, regardless of fault or payment method. Failure to do so could lead to complications if the repair costs increase later or complications arise.
Verify Ownership and Damage: Confirm that the person you’re dealing with is the actual owner of the vehicle, and ensure that the damages being claimed were indeed caused by your vehicle. It might be helpful to document the damage with photos and take note of any discussions via written communication.
Protect Your Interests: If you’re concerned about the other party still filing a claim after receiving money or if there are disputes over the final repair costs, consider the possibility of involving an attorney. Legal advice can ensure that your rights are protected should any conflicts arise.
Tax Implications: While less common, bear in mind any tax implications related to payments you make.
Covering All Angles: Finally, consider whether there might be any additional unseen damage to either vehicle; sometimes damage to internal systems or alignment might not be visibly assessed until later. It may be wise to have a full inspection done by a professional.
Taking these steps can help ensure that if you choose to resolve the incident out of pocket, you do so safely and fairly, minimizing future risk or disputes.
