Minor Accidents: When to Report to Insurance & When to Pay Out of Pocket (With Cost Scenarios)

It’s a common question after a light bump or small scrape: should I report a minor car accident to my insurance company, or handle it privately? Reporting is generally recommended if:

• There appear to be injuries (even mild or delayed ones)
• Vehicle or property damage is uncertain or could cost more than expected
• The other party might file a claim against you later
• Your insurance policy requires you to notify them of all incidents

Failing to report a minor accident can leave you vulnerable if hidden damage or injuries emerge, or if the other driver disputes your account down the line.

On the other hand, paying out of pocket might be safe if:

• The costs are well below your deductible
• Only your own car is involved and no one is injured
• Damage occurred on your private property

Real-World Cost Scenarios for Minor Car Accidents

You should file an insurance claim for vehicle damage if the damage costs more than your deductible. This way, your insurance company can cover the difference. Expenses your insurer might reimburse you for include, but are not limited to, repairs for damage to your vehicle and medical costs for injuries sustained during the accident.

Bear in mind when assessing damage and injuries that medical treatment and car repair may cost more than you expect. It’s not always possible to determine the severity of injuries or damage at the scene, and looping in your insurance company is the best way to ensure a speedy solution for all parties.¹

How you file a claim depends on the insurer, but the first step is to get in touch with your insurance agent or submit a claim online, through your insurers app, or by mail.

Filing a claim can affect your insurance premium and your car’s resale value. It’s understandable to be reluctant to file a claim for a minor incident, and instances when you may reasonably choose to pay out of pocket after a minor accident do exist. For example:

• Accidents involving just you or your car: Your car insurance company may not reimburse you if another party was not involved (e.g., backing into a pole), so in this instance you may choose not to file a claim.
• Repairs cost less than your deductible: Your deductible is part of the repair bill you agreed to pay before your insurance will reimburse you for a covered claim. If the repairs cost less than your deductible, you will pay for any repairs out of pocket.
• Accidents on your property: This is the only time you don’t have to call your auto insurance provider after an incident. Examples include backing into your garage door or scraping a fence on your property. If the damage on your property is significant, you will need to contact your home insurer instead.
• Very minor accidents: These may include a very slow speed rear end, or bumping another car in a parking lot. If you and the other driver are both satisfied the damage is insignificant, it may be more cost effective to resolve the issue without involving insurance.

Before you pay out of pocket for a minor accident, make sure you can answer these questions:

• Is the damage estimate correct? Get a second opinion. If the damage is more extensive than it appears initially, your insurance might cover more of it than you think.
• Do you trust the other party? If you want to work out compensation with the other party directly, you need to be sure they’ll follow through with what they promise to do. The best way to hold the other party accountable is to exchange insurance information.
• Do you have accident forgiveness? If so, and it’s your first accident, there is no harm in submitting a claim to your insurance provider. Accident forgiveness prevents your premium from going up if you have an accident.² Insurers apply accident forgiveness differently, either at no charge or as a purchased endorsement.
• Are you considering switching insurance companies? Insurers will ask questions about your accident history and look at your driving record when providing you with a quote. Not reporting an accident could be considered insurance fraud.

Every auto insurance policy requires you to report any accident immediately, whether or not you are at fault.³ While it’s true that accidents may impact your premium, raising your premium isn’t the only reason insurance companies want you to report an accident. Contacting your insurance company after a minor accident benefits you if any of the following situations apply:

• Either party was injured: If either party sustained injuries in the accident, contact your insurer. Personal injury protection can help cover the cost of injuries to your or your passengers, and bodily injury coverage helps cover the cost of the other driver’s medical expenses if you were at-fault.
• Unclear injuries: Some injuries take hours or days to develop or get worse over time. Reporting a minor accident protects you in the event you need to rely on your medical payments and liability coverages later.
• Costly property damage: It’s hard to assess vehicle damages on the spot. Either party may discover damage after the fact that is expensive to repair.
• Untrustworthy drivers: What do you do when someone hits your parked car and leaves? Or if you exchange phone numbers only to realize later that they gave you fake information? Settling outside of insurance is dependent on trust, which is risky. You can’t trust the other party to make you whole (compensate you fully); that’s what your insurance policy is for.
• Quick repairs: You may have access to better, faster repair shops and experts that will get you back on the road faster than if you pay out-of-pocket for damages.
• No-fault state: If you live in a no-fault state, the at-fault party will pay for the other party’s property damage; however, each party pays for their own medical expenses under medical coverage, and the victim can sue only for non-economic damages like injuries. As such, people who live in no-fault states like Massachusetts or New York will have a very different experience than people who live in liability, or at-fault insurance, states. If you’re injured in a no-fault state, you should contact your insurance company regardless of who is legally liable for the accident.

You should not contact the other party’s insurer after an accident. You are not responsible for informing their insurer an accident occurred, and your insurance company will advise you on the next steps in the reporting and claims process. In rare cases, your insurance provider might instruct you to contact the other driver’s insurance company to file a third-party insurance claim for car repairs and medical expenses, but it’s common for your insurance company to do this step for you.

Your insurance company can help you with everything from towing to getting a rental car to paying for a defense if the other driver pursues a claim against you.⁵ Here’s how each type of insurance coverage can come in handy after an incident:

• Collision coverage: Whether you’re in a crash with another vehicle, you hit an object, or you roll over in your car, collision insurance pays for out-of-pocket expenses whether or not you are at fault.⁶
• Bodily injury liability coverage: Bodily injury liability coverage pays the costs of injuries to others if you are at fault in an accident.
• Property damage liability coverage: Property damage liability covers the other party’s property damages if you are at fault. Both bodily injury and property damage fall under the liability types of coverage.
• Medical payments coverage: Medical payments coverage pays for medical bills for you, your family, and the passengers in your car in the event of an accident. You’ll also have protection if someone hits you while you’re walking.
• Personal injury protection (PIP): Like medical payments coverage, PIP covers your injuries. PIP also covers lost wages and child care. No-fault states require PIP, and at-fault states require medical payments coverage.
• Uninsured/underinsured motorist coverage: If the other driver in the accident doesn’t have any or enough insurance to cover the costs of your and your passengers’ damages and injuries, your uninsured/underinsured motorist coverage will pay.

Here’s how you report an accident or file a claim with your insurance company:

1. Gather all the information you can about the accident, including:
   • When and where the accident occurred
   • Your insurance policy number
   • A description of the accident
   • Information about the other driver, including their name, phone number, and insurance information
   • The VIN of any cars involved
   • Details about law enforcement involvement or a copy of the police report (You can file a claim without a police report, but we don’t recommend it, as police reports provide valuable evidence for your claim.)
2. If you have an insurance agent, contact them for tips to speed up the claims process.
3. Submit your claim by:
   • Calling a claims processing phone line
   • Filling out an online form through your insurance company’s website
   • Using your insurance company’s mobile app
4. When you speak to your insurance company, don’t apologize or claim that you have no injuries. Do not offer up details that are not requested.⁷

In summary, when it comes to “should I report minor car accident,” the safe and recommended option is usually to notify your insurer—especially if injuries, uncertainty, or another party is involved. Paying out of pocket can work for truly minor, clear-cut cases, but never at the expense of your financial protection and legal peace of mind. While a history of claims can increase your premiums, it’s still very much possible to find cheap car insurance after an accident.