Last Updated: September 7, 2024
Getting through the aftermath of a car accident can be an exhausting experience. Between getting medical treatment for your injuries, repairing or replacing your car, and dealing with insurance companies, the process is often time-consuming, stressful, and expensive. You may wonder whether it would be easier – and cheaper – to skip going through insurance and just settle with the other driver privately.
While this may be an option, settling a car accident privately may come with some legal and financial repercussions that you should be aware of from the outset.
North Dakota Car Insurance and Accident Reporting Laws
North Dakota is one of only a handful of U.S. states that uses what is known as a “no-fault” insurance system. Following an accident, you file a claim with your own insurance company, regardless of who is responsible for causing the collision. Depending on your policy and coverage, personal injury protection (PIP) coverage helps pay for your medical expenses, while collision coverage takes care of the physical damage to your vehicle.
But regardless of your coverage, is it illegal to settle a car accident privately? While it’s not illegal to settle a car accident without going through your insurance company, North Dakota law requires drivers to report collisions to law enforcement if they cause injuries, death, or property damage totaling at least $4,000.
Pros of Settling a Car Accident Privately
Settling a car accident privately means the parties involved in the collision come to a mutual agreement as to who pays for the accident damage and medical bills associated with the crash. The biggest advantage that comes to mind when people consider whether to settle a car accident privately is the money they save in insurance premium costs. For some, a one-time upfront payment to another person is preferable to the long-term costs associated with higher insurance premiums due to an accident.
One of the other benefits of handling the case between only the involved parties is a faster resolution to the situation. People can bypass the lengthy claim process, paperwork, and insurance red tape. There is also a sense of privacy, allowing individuals to keep their personal and financial information private and avoid formal documentation. Some people may also feel like they have more control over the process, instead of handing the claim over to an insurance adjuster and waiting for a decision. Instead, they work with the other driver to find settlement terms that meet everyone’s needs and expectations.
Cons of Settling a Car Accident Privately
At the same time, there are some significant drawbacks to handling a car accident yourself. First, you lack formal and legal protection if one party fails to fulfill their obligations. You also risk fraud and overpayment if the other party does not want to negotiate in good faith or exaggerates their injuries or the damage to their vehicle. You also lack protection if you require future medical care or there is hidden damage to your car that you did not account for in your original agreement.
In addition to the potential for conflict, you may limit your overall compensation. Private settlements often focus on tangible losses like repairs or medical bills. What about lost wages, emotional distress, or pain and suffering? Additionally, you forfeit coverage that might otherwise protect you from financial loss. If your situation escalates, a court may not recognize an informal settlement, leaving you with little recourse for recovering the money you need.
Contact Our North Dakota Car Accident Attorney for Help
Can you settle a car accident privately? Yes. Should you settle a car accident privately? Probably not. Working with an experienced North Dakota car accident attorney to file a formal insurance claim is always in your best interest because it’s more likely to result in getting you the money you need and deserve. At Pringle & Herigstad, P.C., we can manage this whole process for you while you focus on healing. Contact our office today and request a free consultation to learn more.
