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At-fault Driver Wants To Pay Out Of Pocket

Car Accidents
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What Happens if an At-Fault Driver Wants to Pay Out of Pocket?

If you are involved in a car accident, one of the top concerns is knowing the party who should pay for your accident-related losses. In most cases, the injured victims obtain compensation through insurance claims and lawsuits against the at-fault driver.

An injured victim might receive a cash settlement offer immediately after the accident. The at-fault party may want to settle the losses in cash instead of involving an insurance provider or calling the police.

While avoiding filing a claim may sound like a good idea, you should never accept an immediate cash offer. Accepting an out-of-pocket cash settlement benefits the at-fault driver much more than you.

You should consult a trusted Baltimore car accident attorney before accepting any offer from the at-fault driver.

Why an At-Fault Driver May Offer Money

If involved in a relatively minor crash, the at-fault party might offer you money at the scene. Here are a few reasons behind out-of-pocket settlements:

  • The at-fault party might have a suspended license or operate without insurance.
  • The at-fault party may prefer settling the losses out-of-pocket to avoid having the crash on their driving record. For instance, a speeding driver who caused a car crash may get a ticket if the police arrive at the scene.
  • Paying the accident out-of-pocket is a tactic to avoid a potential premium increase. Most insurers make a premium adjustment anytime a policyholder or injured victim makes a claim.
  • The at-fault party may offer a cash settlement to avoid paying more in an insurance claim or a lawsuit.

Is Offering and Accepting Money Illegal?

It is legal for the at-fault party to offer to pay for the losses out of pocket, and it is similarly legal for the accident victim to accept a cash settlement. While taking the cash and moving on might be a great idea, you should reconsider.

You should speak to a car accident lawyer about whether to accept the proposal or proceed with an insurance claim. The proposal likely does not accurately reflect your damages. Neither you nor the at-fault party can accurately predict or value the losses related to the accident right away. The at-fault party will usually only offer the amount they’re comfortable paying.

You should work with an attorney who will accurately evaluate your current and anticipated losses. More importantly, an attorney can file an insurance claim on your behalf and negotiate for a fair settlement value that covers your losses.

If the at-fault party offers to pay for the losses out-of-pocket, their intention might be to keep the police or insurer in the dark. In that case, you might receive a penalty for not notifying the police or insurance company about the accident.

If the losses overwhelm you, making it necessary to file a claim, the insurance provider may reject your application for lack of evidence to prove the at-fault party.

When It Might be Acceptable

You should only accept an out-of-pocket cash settlement if it adequately covers your damages. Out-of-pocket cash settlements mostly apply to accidents with minimal damage, such as small paint scratches and no injuries. 

Here are a few questions on whether to accept a cash offer or not:

  • Do you know the driver, and are they trustworthy?
  • Is it a minor accident with minimal damages
  • Are you the only person involved in the accident?
  • Can you confirm whether you were injured or not?
  • Does the cash settlement sufficiently cover your damages?

If the answer to the above questions is yes, leaving out the insurance company might be okay. Ask for the at-fault party insurance, contact information, and a quote for the repair costs. Then, return to the at-fault party with the quote to see if they’re still willing to pay out of pocket. 

Regardless, you should put the offer on hold and consult a car accident attorney for legal advice before you make your decision.

When It’s Not Acceptable

While accepting an out-of-pocket settlement has its advantages, some disadvantages might hurt your interests:

You Don’t Know the Extent of Your Injuries

It is impossible to understand the extent of your injuries immediately after a crash. Only a qualified healthcare provider can provide an objective evaluation of your injuries. 

Suppose you suffered a concussion after a car accident and the symptoms may not be immediately apparent after the incident. In that case, a comprehensive examination from a physician may reveal the condition and associated medical expenses.

Suppose you develop a severe medical condition days after the accident. In that case, you may be financially disadvantaged if you’ve already accepted an out-of-pocket payment from the at-fault party.

Unknown Vehicle Damage

After the accident, you may only understand the full extent of the damages with the input of a qualified mechanic. Any money you receive is a rough estimate of the losses, at best. While your vehicle damage may appear minimal, some hidden damages may be extensive.

You should, therefore, request a quote for repairs and parts replacement from a service provider before accepting an out-of-pocket settlement proposal,

You May Lose Other Damages

You may lose the chance to obtain additional damages when you accept an out-of-pocket settlement proposal. Besides medical expenses, an attorney can help you recover damages such as lost wages, emotional anguish, and pain and suffering.

Cash offers at the scene may not include non-economic damages, such as emotional anguish, that are not immediately apparent after the accident.

Hurting Your Chances of Filing a Claim Later

It may be challenging to file a claim if your injury worsens after you receive a cash offer from the at-fault driver. The at-fault party’s insurer may reject your claim, stating the driver has already fulfilled their obligation to compensate you.

Get Legal Assistance From an Experienced Baltimore Car Accident Attorney

After a car accident, knowing what to do or who to trust can be difficult. Never hesitate to meet with a reliable and experienced car accident lawyer in Baltimore who will be your advocate. Bob Katz Law has recovered over $100 million in personal injury claims over the last ten years, and we can fight for you.

Contact us online or at 410-576-4287 to schedule an initial consultation.

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