Last Updated on December 5, 2025

So you’ve been in a car accident. Your first instinct might be to immediately file a claim with your insurer—but that isn’t always the best financial choice. In many situations, you may actually be better off paying out of pocket. Below, we break down when you should file a claim, when you shouldn’t, and why it matters.

Key Takeaways

• Reporting an accident is usually mandatory; filing a claim is not.
• If repairs are cheaper than your deductible, paying out of pocket often makes more sense.
• Cash deals with other drivers are risky and often lead to legal or financial issues.
• Filing a claim is typically best for multi-vehicle crashes, injuries, or expensive repairs.

You Have a Responsibility to Report an Accident to the Police and the DMV

Before deciding whether to file a claim, understand that most states require you to report certain accidents to the police, the DMV, or both—even if you don’t file an insurance claim.

Requirements vary by state. For example:

• New York: Must report to DMV if property damage exceeds $1,001.
• Oregon: Must report if property damage exceeds $2,500.
• Wisconsin: Must report accidents causing $200+ in damage to government property.

In nearly every state, you must report accidents involving injuries or fatalities, regardless of cost. Failing to report when required can result in penalties or license issues.

Reporting an accident is not the same as filing a claim—you can report an accident but still choose to handle repairs privately.

You Can File Reports Without Making an Insurance Claim

Many drivers are afraid to call their insurer unless they plan to file a claim. But you can notify your insurance company about the accident without starting a claim.

In fact, your insurer can help you calculate whether filing a claim makes financial sense after reviewing repair estimates and your deductible.

Why Wouldn’t You File a Claim?

There are two primary situations where filing a claim may not be worthwhile:

• The repair cost is less than your deductible
• You are considering a cash deal with another driver (not recommended)

Each situation has different risks, and both require careful consideration.

Your Deductible Is Higher Than the Repair Cost

If your deductible is $1,000 but the repair will only cost $500, filing a claim doesn’t make financial sense. You would pay the full $500 out of pocket anyway, and filing could cause your insurance rates to increase.

When paying out of pocket makes sense:

• The damage is minor (e.g., a small dent or scratch)
• No one else’s property was damaged
• No one was injured
• There are no hidden repair issues (mechanical, structural)

If you’re confident the repair will cost less than your deductible, paying out of pocket can help you maintain a clean insurance record and avoid future premium increases.

You’re Making a Cash Deal With Another Driver

Some drivers offer a private “cash deal” after an accident to avoid involving insurance. This is often a bad idea, particularly in anything more serious than a minor parking lot scrape.

Reasons cash deals are risky:

• No rental reimbursement: Without filing a claim, you won’t receive rental coverage while your car is repaired.
• Hidden injuries or damage: Whiplash or structural damage may appear later—after the cash deal is long forgotten.
• The other driver could still file a claim: If they report the accident later, it may look like you failed to report it.
• Potential legal trouble: In some states, not reporting an accident could resemble a “hit and run.”
• Repair quality issues: Insurers often have preferred repair shops that guarantee their work. Independent shops may not.
• Risk of scams: Fraudsters sometimes stage small collisions or back into cars in parking lots, then demand cash.

Unless the damage is extremely minor and you know and trust the other driver, filing a claim is usually the safer route.

Out-of-Pocket vs. Filing a Claim

Before deciding whether to file a claim, compare the pros and cons—this table highlights when paying out of pocket makes sense and when filing a claim is the better move.

FAQs

Final Word: Should You File a Claim?

Most states require you to file a police or DMV report when injuries occur or damage exceeds a certain dollar amount. However, filing a report does not mean you must file an insurance claim.

Reasons you might not file a claim:

• The damage is less than your deductible
• The accident was extremely minor and involves no other parties
• You want to avoid a surcharge and the repair cost is manageable

Reasons you should file a claim:

• There are injuries or significant property damage
• You hit someone else’s vehicle or property
• You were hit by an uninsured or unknown driver
• You suspect hidden damage
• The other driver becomes uncooperative

If you’re unsure, call your insurance company—they can help you estimate repair costs, evaluate your deductible, and decide whether filing a claim is your best option.