When Should You Pay for Vehicle Repairs Out of Pocket?

Last Updated on November 12, 2022

If your vehicle needs repairs, then you can either make an insurance claim or pay for repairs out of pocket.

If the cost of repairing your vehicle is less than your deductible, or if the cost is roughly equal to your deductible, then you should pay for vehicle repairs out of pocket.

Keep reading to discover everything you need to know about paying for vehicle repairs out of pocket – and when to do it.

Filing a Claim Versus Paying Out of Pocket

When you make an insurance claim, you pay a deductible, and your insurer covers all remaining costs of repairing the damage.

  • If you crash into a wall, for example, and do $5,000 of damage to the front of your vehicle, then you may pay a $500 collision coverage deductible, and your insurer covers the remaining $4,500 for repairing your vehicle.
  • Now, let’s say you only scrape against a wall. Your bumper only has minor damage. It will cost around $400 to repair this damage. In this situation, it’s not worth it to make a claim: you’d pay a $500 deductible to make a claim, which is more than the total cost of repairing the damage in the first place.

Claims Could Increase Premiums

Even if the damage is equal to or slightly higher than your deductible, it may not be worth it to make a claim. Making a claim today could lead to higher premiums in the future.

Let’s say it will cost $800 to repair your vehicle after a single-vehicle accident. Your deductible is $500. It may seem worth it to make a claim. However, making a collision coverage claim could lead to a surcharge:

  • An at-fault collision coverage claim raises insurance premiums
  • Unless you have accident forgiveness, a single at-fault collision claim could raise premiums by 20% to 50%
  • Even if your collision coverage deductible is less than the cost of repairs, it may not be worth it to make a claim because of these higher premiums
  • Insurers do not typically raise rates after comprehensive coverage claims; comprehensive coverage covers vehicle break-ins, vandalism, hail damage, fire damage, collisions with animals, and other incidents that occur outside of accidents

When to Pay Out of Pocket

Situations vary. However, some of the situations where you may consider paying out of pocket include:

A Single-Car Accident with Little Damage and No Injuries

If it’s an inexpensive, single-car accident, then it may be worth paying for the damage out of pocket. If you’re pulling into your driveway and scrape the side of your vehicle along your garage, for example, then it may be worth paying for repairs out of pocket.

Two-Car Accidents with Very Minimal Damage and Zero Injuries

In most cases, you should make a claim for any collision with another vehicle. You or another person may be injured, and even minor injuries can lead to thousands in medical bills.

However, if it was a minor collision with no damage to either vehicle, then you may make an agreement with the other driver to not involve car insurance companies. As long as you trust the other driver, and as long as there are no injuries or significant damages, you may be better off paying out of pocket in this situation.

However, be wary of situations where the other driver changes their mind and makes a claim. The other driver could alert their insurer after the accident, for example, and make a claim. This could leave you with limited recourse.

When to Call Your Insurer

You should report some accidents to your insurer in all situations. Situations where you should call your insurer and make a claim include:

Accidents Involving Injuries

If you or someone else is injured, then you need to report the accident even if the injuries are minor. Even minor injuries could lead to thousands of dollars in medical bills. Even if the other driver requires basic treatment, you could be liable for thousands in medical bills.

Contact your insurer and the police after an accident involving another person with injuries. Remember: even if injuries are not immediately apparent after the accident, they could appear days or weeks later.

Accidents Involving Significant Damage

Many are surprised by the cost of vehicle repairs. Even seemingly minor damage to a vehicle can cost thousands to repair. Scrapes along the side of your car, for example, could cost thousands to repair. Even if the accident does not look serious, you should contact your insurer for any damage beyond small dents, scrapes, and scratches.

Other Things to Consider When Paying Out of Pocket

Before paying for vehicle repairs out of pocket, consider the following:

Injuries may not be apparent for days, weeks, or months after an accident. If you were in a serious collision but had little damage to your vehicle, then that doesn’t mean you can avoid making a claim. If you pay out of pocket today and avoid telling your insurance company, then you could miss out on significant compensation.

If you already have one or more at-fault accidents on your recent driving record, it may not be worth making a claim. In this situation, an additional insurance claim could significantly increase insurance premiums – or even double insurance premiums or lead to policy cancellation. Even if the accident led to significant vehicle damage, it may not be worth it to make a claim.

Do the math. Deciding whether or not to involve insurance and make a claim requires basic math. Consider the cost of your deductible, the cost of repairs, and the amount by which your premiums will increase. Based on all of these factors, you can make the smartest decision about whether or not to make a claim.

Collision and comprehensive coverage have different deductibles. Typically, your comprehensive coverage has a $250 to $500 deductible, and your collision coverage has a $500 to $1,500 deductible. Depending on the type of damages, you could pay either the comprehensive coverage or collision coverage deductible, which affects whether or not you pay out of pocket.

You do not pay a deductible if the other driver was at fault. If the other driver was at fault for the collision, then you make a claim through the other driver’s insurance company. The other driver pays a deductible, and the other driver’s insurer covers the full cost of repairing your vehicle to pre-loss condition.

Paying Out of Pocket for Windshield Repairs and Replacements

If you’re debating whether or not to pay out of pocket for windshield repairs and replacements, then the math works differently.

  • Most insurance companies do not charge a deductible for windshield repairs. If your windshield has minor damage and can be repaired, then your insurer should charge a $0 deductible, which means you get free windshield repairs (assuming you have full coverage car insurance).
  • All insurance companies will charge a deductible for windshield replacement. If your windshield has significant damage that needs to be replaced, then you pay your deductible (typically around $250), and your insurer covers the rest.
  • If you have full glass coverage, or if you live in Florida, Kentucky, or South Carolina, then you pay a $0 deductible for all windshield repairs and replacements.

If you’re unsure whether or not it’s worth it to pay out of pocket for windshield repairs and replacements, contact your insurer. Your insurer can explain the pros and cons of repairing or replacing your windshield.

Final Word on Paying for Repairs Out of Pocket

Paying for vehicle repairs out of pocket versus making a claim is not an easy decision.

However, by considering the situation and doing basic math, you can determine if the cost of repairing your vehicle exceeds your deductible.

Generally, you should make a claim for all serious accidents and incidents, including situations with extensive vehicle damages and injuries.

However, for minor accidents with minimal vehicle damage and zero injuries, it may be smart to pay out of pocket for basic repairs.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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