How to Handle a Car Accident without Insurance


If you’re found at fault for a road collision, tamp the brakes before you file a claim. You may want to handle it another way, depending on the situation.

In most places, you have a legal requirement to have auto insurance before you can put the pedal to the metal. So why would you go to all the trouble of hunting down policies and paying your premiums if you’re not even going to use it?

Keep scrolling to learn when insurance might not be the best idea, when it is, and how you can pay for repairs without it.

Why You Should File a Claim with Insurance

Broadly speaking, insurance is the way to go when it comes to major accidents that involve property damage, medical expenses, and even legal costs. This might include a rollover or head-on collision that totals both cars and causes injuries.

If an accident results in bills that you can’t pay on your own, you can file a claim and have your insurance company step in.

Why You Might Not File a Claim with Insurance

For smaller accidents, your options might not be as cut and dry. While you can always involve insurance to cover at-fault collisions, you should keep in mind that your claim could increase your premiums.

An at-fault claim almost always triggers a penalty on your policy. Your insurance company will add this surcharge to your monthly premiums, potentially increasing your premiums by 34 percent.

You also have to consider how much your deductible will be. If your deductible is $2,000and repairs cost $10,000, you’ll pay the $2,000 deductible, and your insurance will cover $8,000.

With this kind of ratio, insurance makes sense. But it might not if your repairs come to $2,500 and you’re still stuck paying $2,000, especially if your claim will raise your monthly premiums by more than $500.

How to Finance an Accident Without Insurance

In a minor accident, you may forgo filing a claim to insulate your premiums. If the deductible-to-pay-out ratio isn’t worth the eventual rate hike, you can try these other ways of paying for repairs.

1Tap into Savings

A minor accident is your emergency fund’s time to shine. You squirreled away these savings exactly for this kind of unexpected emergency, so you should tap into this fund if you have it.

Financial experts recommend keeping three to six months’ worth of living expenses in this fund. With a goal this big, it could help you afford minor detailing and bodywork caused in a crash.

2Take out a Loan or Line of Credit

If you don’t have savings, you might apply for an online line of credit or installment loan, two popular cash advances. You can find quick borrowing options with fast and simple application processes that may put money in your hands if approved, so you can take care of essential repairs as soon as possible.

Of course, any cash advance comes with rates and fees. Find out how much these financial products will cost and compare it to the cost of accident surcharges. If these rates are lower than your penalty, it may be a cheaper idea to borrow an installment loan or put repairs on a line of credit.

Bottom Line

There are a lot of variables you have to consider before you make a decision, so do your research. Whatever you do, don’t panic. Take some time to compare your options, and you’ll find a way that works.


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