When To Pay Out Of Pocket For Insurance Claims, Must-Know Information

by | May 1, 2020 | Insurance Claims | 0 comments

pay out of pocket insurance claim

Let’s say your significant other scratches the side of your car on the side of your door trying to squeeze into a tiny garage. The damage to both cars is very minimal. Should you pick up the phone and report it to your insurance company? Or would it be wiser to avoid the insurance company all together?


There’s just one conclusion, pay for the damages out of pocket and avoid the blemish on your insurance records.

To begin, lets put everything out on the table; its sometimes always in your best interests financially to bite the bullet and pay for the repairs out of pocket.

In most of the cases, we see at New Image Auto Solutions the collisions are minor and don’t involve many people. There’s no incentive to make an insurance claim when we are ready to win your business and give you the best price possible. When it comes to the moment of decision we like to provide as many options as possible and help you save in the long run.

Its no wonder why according to yelp we’re the number one choice for auto body repair shops in Silverlake, CA.

insurance company car accident

When Should You Speak With Your Insurance Company About The Claim

It is your insurance companies job to be transparent and offer the best advice about moving forward with a claim. Some drivers choose to not disclose to their insurance company about every small accident they are involved in. If you suspect the repairs are going to exceed your deductible it’s not a bad idea to get them to help forecast the repair bill and get there opinion if whether you should open your wallet.

Here’s the caveat, it can be a bad idea to talk to your insurance company if you have a checkered past and history of AT FAULT CLAIMS with them– You may have to be cautious that they do not cancel your policy out of no-where

Things To Think About Before Paying For a Claim

Here is some sound advice for deciding to pay or not to pay…

Are There Other Vehicles or Parties Involved?

Multi car accident

Its very common and practical to often pay for single-car accidents out of pocket. Our Silver Lake auto body shop repairs usually come out to the lowest, so why ring the bell for an accident that may cause your rates to skyrocket for the next couple of years. Just bring your car in and we will give you a FREE ESTIMATE, in most cases the customers are surprised the cost to fix minor dings and scratches cost lower than the deductible.

California Law On Reporting Accidents

Los angeles report car accident

In cases of accidents that happen in California involving injury, death, or property damage exceeding $1,000, drivers must also report the accident to the Department of Motor Vehicles within 10 days.

When Another Party Is Involved It’s a BAD idea To Pay Out Of Pocket.

When you are involved in an accident involving another person its really out of your hands and its law that you have to file a report with the Police and the DMV within a 10 day period. Many outcomes can take place, you might not receive the full medical and repair costs from the other person until weeks after the incident.

Have You Been At Fault In a Claim In The Previous 3-5 Years?

Your rates are going to rise if you have been in a single at-fault claim recently. If you have multiple at-fault claims it can get really expensive to keep your car on the road. The worst thing that can happen is that they cancel your policy.

If you were recently involved in an at-fault claim you may decide to pay out of pocket for the repairs even if it surpasses your deductible. Let’s say for instance repairs may cost $900 and you have a $500 deductible, Over the course of 3-5 years, the extra money that you will be paying can hurt you more in the long run.

You don’t want insurance companies seeing you as a HIGH-RISK driver sometimes paying out of pocket is the wiser option.

Are The Cost Of Repairs Higher Than Your Deductible

repair cost deductable

Try to imagine the alternative .. you get in a minor accident. –Rates go up and you lose more money in the future. Or speak to us at New Image Auto Solutions we give you professional advice and make the incident manageable for you. Our job is to help you

and since we know that times can be tough we will do everything to help and create a cost-effective solution where you will not have to compromise on the quality of craftsmanship needed to fully restore your vehicle.

From what we have seen it always suits your best interest to always pay the repairs if damages are in the range of $500 – $1000 of your deductible.

Are Car Repairs Tax Deductible When Paying Out Of Pocket?

Unfortunately NO, you cannot subtract the costs from the car accident if you did not file an insurance claim during the time of the incident. Also if you caused the accident due to your own negligence you are not legally entitled to deduct any money for the damages.

If You Do Pay Out Of Pocket and There Is an Insurance Claim…

The answer is, YES. If you use your car for business purposes there is an actual expense method that allows you to write off some of the costs. I bet you will agree that if you end up having to pay out of pocket you will want to get some of this money spent back.

During tax season You can deduct the physical and property damage caused by an accident on your federal taxes using Form 4686 and Schedule A of Form 1040.

In Conclusion


New Image Auto Solutions is a good friend to have by your side when you get in a wreck. We will give you the best price in all of the Silver Lake / Los Angeles area for out of pocket repairs. Your vehicle will get the top-priority treatment, we will handle the job from start to finish making the process as less stressful as possible. Let us come through during crunch time!

About Author

Izzy A

Izzy A

Izzy has been in the automotive industry for a lifetime. His auto body repair shop has been serving the Los Angeles, Silver Lake community for over a decade and his passion for restoring vehicles has made him the foremost authority in collision repair.


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