Not college related at all, but teen related! My son backed into another high schooler’s car in the school parking lot. They exchanged numbers and we’ve talked to the parents and agreed to pay. It will be less than $2500 and my husband and I decided that we think we want to not file an insurance claim.
So…the mom texted me a pic of the estimate, and they were told that once they open up the door there could be additional damage of up to $1000 (initial damage $1500), but we have an estimate for the visible damage. At this point, my questions are: 1) Should we pay the car repair place ourselves, or pay the car owners? 2) Husband wants some kind of release form drawn up after the repairs are done, saying we are no longer liable/responsible for any further repairs, has anyone done this? (I did see this on some articles about it, a release of further claims 3) Any other pitfalls we should know about?
We know the parents, the dad is my other son’s assistant football coach, so we aren’t super worried about anything going majorly wrong here. They just went through this on the other end last year when their son ran into someone at high school! So they are confident in the place they are planning to get the repair done. (FYI we’re 99% sure it’s my son’s fault, given the locations and damage there is no real other explanation than my son backed out of his parking space right into the other guy as he was driving behind him).
We did this with my S. Much cheaper than the insurance surcharges would have been! We paid car repair place directly. We did not get any sort of release - that was a risk but we did not think it was worth potentially blowing up the deal. They way we saw it, they were doing us a favor. They were covered either way. It was our son’s fault and they were inconvenienced by having car in the shop.
Someone hit me and handled it outside of insurance. I went to the auto body repair shop of my choice, gave them an estimate, and they paid the shop directly. I did not (and probably would not) sign a waiver. IMO I did them a favor especially since I did not get a rental car while mine was in the shop (which insurance would cover).
I agree that they are doing us a favor, not asking for a rental car. I can’t imagine them coming back like a year later and asking us to pay for a new rattle in the door or something, but my husband is worried about that. I guess we could just say no! No one is signing anything (so far) and the car repair place does warranty the work.
BTDT also with my D. We paid the repair shop directly. My S was hit a few months ago and the other driver paid for his repair. I never thought to get a release, but have not had a problem.
Is the student covering any of the costs related to this incident?
Check first to see IF your premiums will increase. They might not. Or they might, but not a huge amount.
I somehow scraped the door of a brand new car in a friend’s driveway. They got it fixed at the vendor of their choice and I paid the bill. No issues, and we are still friends.
We’ve done it twice. Once my son bumped a car and it was $1,300 and we paid the auto body shop. Did not ask for a release form. The other I did it at out company lot where I worked. It was $600 damage to an old car and we had him sign a release form.
"Check first to see IF your premiums will increase. "
Be very, very careful with this. The idea is to avoid having a record of this accident in the CLUE database or in any other insurer records because that information will be used to set rates for future policies. Just calling your insurer can get the incident added to the CLUE database depending on how you phrase your questions and what the insurer’s policy is. That could be worst of all possible worlds - you pay for the repair out of pocket to avoid a premium increase, but because you notified your insurer the CLUE database shows the accident so you’re still dinged for it in future policy rates even though the insurer paid nothing. Ouch.
Not only that, but even if the current rate algorithms won’t cause your rates to increase due to one accident, there’s no guarantee those algorithms won’t change next year to encompass that data. Also, different insurers use different information in their rate settings, so your current insurer may say “no, that’s not going to increase rates” but then you might be locked into keeping that insurer for years because all the others do use that information to set rates and now the rates for your teen driver with an accident are sky high.
I just got D20’s car out of the shop because of someone who rear-ended her. The auto body shop guaranteed their repairs, so in that case, there would be no need for a waiver.
(FYI - once they got the bumper off, it was slightly more than $3,500 to repair.)
Thanks all, I read that too…that even calling to ask the question can somehow be reported and cause something to happen with our insurance. As I mentioned, the guy my son hit was in this same situation a year ago, and the dad told me that their insurance went up a lot for the minor repair. (Now I realize we have different policies, but we are talking about the young male teen demographic here, which I hear is the highest anyway).
I believe my husband’s fears and desire for a release are coming from his past bad experiences with his own autobody repairs that continued to cause problems for months afterwards. However, this is totally different…it’s a teen boy driving a very old car that’s just hanging on…not a grown man with a very nice car who wants it to be perfect! So I’m not as concerned but we will see.
Again, if getting a signed release (signed by all parties involved) is a major concern, then let the insurance company & their claims people & attorneys handle the matter.
Again, with respect to increased premiums, that can be offset by altering your current policy to a higher deductible.
Insurance companies are experts at protecting the interests of their insureds (and their company) when accidents occur.
P.S. Does your auto policy require reporting of all accidents ? Or has that time frame passed ?
This happened to me once when I was young, but I was on the receiving end. The person who hit me asked for 2 estimates, and they paid me by check (made out to me) the higher amount. They told me to keep the extra if I used the lower estimate. Whatever you decide to do, I would add a little extra on for any inconvenience.
“Again, with respect to increased premiums, that can be offset by altering your current policy to a higher deductible.”
Not exactly. It’s complicated. Every insurer sets rates based on a large number of data points. Their proprietary algorithm uses the data points to calculate risk and set rates. Some insurers are willing to disclose what data goes into the rates, some aren’t. But I can tell you from my experience as a CPA auditing insurers that there are some insurers that use data points that don’t involve the actual money paid for a claim, they’re simply examining whether or not there was an accident (even if the insurer paid $0.)
So under your example of having a higher deductible - meaning the insurer might not pay out any $$$ for the claim - there are some insurers where this wouldn’t cause an increase in future premiums because their algorithm only uses claims paid data, but there are other insurers where just the fact that there was an accident at all would be a data point used to adjust future rates. To complicate things more, insurers change their algorithms so what might be true today could change tomorrow.
The absolute safest thing you can do to ensure an accident like this doesn’t impact future rates is to pay it yourself and not report it at all to the insurer.
Not to argue, but increasing one’s deductible will always lower one’s premiums on an auto insurance policy in the US. (Although one may be placed in a higher rate classification moving to a higher deductible may offset the premium increase. Auto insurance rates are regulated by the states.)
Again, IF a release is a major concern, then let the insurance company handle it if still within the time frame for reporting a claim.
Yes, but the rate reduction for increasing the deductible may not come anywhere close to the rate increase by virtue of the accident. The rate increase is not limited to collision coverage, it is for the liability coverage as well.
We can debate all day long, but the fact remains that if an effective waiver is a primary concern, then let the experts handle it.
P.S. I am not unsympathetic to rate concerns. Even as far back as the 1980s, I had clients wanting health insurance policies with $50,000 and higher deductibles as they just wanted protection from major claims. Auto insurance is much easier to deal with unexpected consequences so long as there are no unrevealed, or no, medical claims or unforeseen major potential liabilities.
In my opinion, too often clients are concerned with the wrong end of a transaction, or, in this case, the wrong end of an insurance policy.
In a similar situation, we talked to our broker, not the insurance company, snd he advised us to not involve the insurance company.
The kid’s parent got an estimate from the dealership that was about $3500. We were freaking out because it was a very old car, and we asked if they would consider using a body shop we like that is reasonable, and they agreed to let us take it for an estimate. Our guy fixed it on the spot for free! And everyone was happy (amazingly ).
I was really worried but everyone did what they could in good faith. And we did make it clear from the outset that how we handled this on both sides was a teachable moment for our kids…
A year later, someone hit me in a parking lot. I took the car to the same body shop and she paid them directly. It was fine for both of us.
The other reason higher deductibles won’t work to mitigate an entire increase is how the premiums are generated. Each policy has a separate charge for liability, collision, comprehensive (and other items). Liability is by far the largest premium category and there is no deductible for liability to raise. Collision is next in line but the amount charged is generally no where near as much as liability so even a 50% savings on collision (by taking a really high deductible or even dropping collision completely) will not offset the increase in the liability premium. Comp coverage is typically the least expensive and there is actually a pretty big disincentive to increasing that deductible. You may save $4 by taking on another $500 in deductible exposure.
You also have to consider the increase in premium will last for 3 - 5 years depending on the carrier. An increase of $300 every 6 months (cheap for a young male with an accident) will, in the long term cost you between $1,800 and $3,000; paying small claims out of pocket makes sense. The other thing to consider is how much more punitive carriers get with a second accident. Kids have accidents, if you turn in this one (which might be break even over time) and then there is a larger accident you can not pay out of pocket (or injuries involved) the next increase will be huge and possibly result in non-renewal.