SARATOGA SPRINGS — The fear of insurance rate hikes has many drivers taking handshake deals when they get into a collision where the damage is minor and no one is hurt. But settling a crash on your own might cause you serious trouble down the road.
A Saratoga Springs woman learned of those risks after a fender bender in October 2024.
When a woman rear-ended Andrea Olsen’s Dodge Durango at a stoplight in Lindon, she immediately offered to pay to repair Olsen’s vehicle, saying she didn’t want insurance involved.
“‘I’ll just pay out of pocket,'” Olsen said the driver told her. “‘I’ll just pay out of pocket.'”
No one was hurt, and the damage seemed relatively minor.
“It has dislodged the bumper entirely, as well as the tail pipe is no longer seated,” Olsen said of the damages.
So, Olsen was happy to oblige, understanding the other driver did not want her car insurance premium to go up.
They took pictures, exchanged information and parted ways.
Deal falls apart
Olsen got two estimates from two separate shops to repair her Dodge — both around $1,500. That’s where this handshake deal began to fall apart.
“She immediately starts accusing me of trying to take her for money, being dishonest,” said Olsen.
Text messages show the conversation got heated with the other driver blasting: “Are you kidding me?” and “Don’t try to be dishonest in this, it won’t work.” And at one point, the driver texted, “Just know that my father is a person who has some power.”
Olsen’s response: “If you cannot pay, I am more than happy to go through insurance.”
She called the police, filed a report and then she filed a claim with Progressive, the insurance covering the other car. But she said Progressive denied that claim.
“Even though we have the police report stating that it was her fault, pictures showing it, her even admitting it was her fault,” Olsen said.
Her next move was to Get Gephardt.
“I just want it fixed,” she said.
Risky handshake deals
The KSL Investigators reached out to Progressive on her behalf, and while we waited for its answer, I took her case to Brent Thurman of Keystone Insurance.
“If you decide to settle it on your own, you’re taking a big risk of complications,” Thurman warned.
For one, handshake deals often fall apart.
“Intentions really are always the very best in the heat of the moment,” Thurman said. “Things change over time, and you don’t want to be chasing them down. You want to give it to the insurance company so that they can handle the exchange.”
Another risk with a handshake deal: Fixing a fender bender might cost a whole lot more than you or the other driver might think.
“What you don’t realize is they have to take that bumper off. Now, there’s brackets. There’s sensors. There’s other things,” said Thurman. “And so, what looks like a couple hundred could easily be a couple thousand dollars.”
Duty to report
Another reason to avoid making a settlement with the other driver on the down-low is most insurance companies require you to report an accident with a second party, even if there’s no claim.
“You actually have a duty that you will report any accidents that involve other parties to the insurance company,” Thurman said.
If you don’t and the other driver later goes to their insurance, don’t expect help from your own carrier.
“It could come to the point where they say, ‘Hey, you took this on your own hands, and so we’re kind of out of the picture,'” said Thurman.
In this situation, Andrea Olsen got good news.
Progressive’s spokesperson wrote us that it couldn’t go into details, but its “claims team worked to resolve Ms. Olsen’s claim, and the matter is now closed.”
And just like that, her Dodge was repaired to what it was before. I asked if she’d do anything different.
“I probably would have just filed through the insurance anyway,” she said.
You should know
Utah state law prohibits an insurance company from jacking up your premium over an incident that you or someone you loaned your car to has been deemed not at fault.
Also, if you’re paying out-of-pocket for damage you did to your own car or your own property — say, backing up into your fence post — you don’t have to report that to your insurance.
The Key Takeaways for this article were generated with the assistance of large language models and reviewed by our editorial team. The article, itself, is solely human-written.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.