How to Pay for that Auto Accident

Not sure how to pay for that auto accident? Unfortunately, there aren’t crash courses taught on how to file your taxes, auto insurance, and writing checks. Instead many refer to them as life lessons that are learned through experience. Auto accidents are typically hit and miss, especially if you’ve never been involved in one. Although you never know how to handle the accident because you can never know the severity ahead of time, we can still be as prepared as possible from a financial perspective in case the event occurs. It’s a sticky situation but the CGS team is sharing a few tips to help you determine when to let your insurance pay or pay out of pocket by yourself.

How Serious Is the Auto Accident?

Did you lightly tap the person in front of you? Did you scratch a car when pulling out of a parking lot? If the accident wasn’t too serious, it may be better for you financially to pay out of pocket.  When you report the accident to the insurance company, your insurance is likely to go up.

On top of that, insurance companies need to appraise the vehicle themselves and typically end up charging you the deductible anyways.  If the person you hit is fine paying out of pocket, be sure to have a reputable body shop give you the damage estimate.  If the amount is too much for you, report it to insurance.

How Much Damage Was Done?

Most states have mandated that all accidents that exceed a certain amount in damages have to be reported. Usually that amount in damages is upwards of $1,000. With so many flimsy finder binder accidents and expensive cars, it’s easy for damages to get close to this $1,000 mark. Although many wouldn’t report accidents that are considered inexpensive, it’s usually illegal. A driver must report all accidents big or small, expensive and inexpensive.

Was Anyone Hurt, or Just Your Car?

Accidents that involve injuries and medical care can be very complex and expensive. If you or anyone else was hurt, be sure to contact your insurance company so proper protocol is followed. However, if no one else was involved in the accident and the damage to your car is just a few scrapes or dents don’t worry!

It typically doesn’t make a lot of sense to file a car accident claim when the repairs cost less than your deductible. Find a reputable collision repair shop and ask them for a general estimate to repair the damage. If the cost is less than your car insurance policy deductible, consider paying for it yourself.


If you, or anyone you know, may have been involved in an auto accident and didn’t know if paying out of pocket was the right thing to do, remember that it’s better to be safe than sorry. If you truly can’t afford it, contact your insurance company. That’s what they are there for. Have you ever been involved in an auto accident? Did you end up paying out of pocket or going through insurance? Share your story with us by leaving a comment below.

-The CGS Team



1 thought on “How to Pay for that Auto Accident”

  1. I recently had someone hit my parked car. They asked if they could pay out of pocket for the damages. After having the damages accessed I let the person who hit me pay out of pocket vs taking the chance that both of our insurances could rise. It worked out well.

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