When to Accept Cash After a Car Accident (and When to File an Insurance Claim Instead)

Any car accident you walk away from is a positive outcome, relatively speaking, but even minor fender benders can cause you a lot of hassle: damage to your vehicle and potential injuries, waiting around for the police to come and make a report, and spending time dealing with insurance. So when someone hits your car and then just offers you some cash if you agree to skip all that trouble, you might be tempted.

It seems like they’re making it easy for you, after all—admitting fault and offering compensation without paperwork, delays, or conflict. And their motivation is obvious and understandable—they don’t want their insurance rates to go up, or they’re doing something shady like driving without insurance and want to avoid trouble.

But for all the seeming upsides, there is only a very narrow set of circumstances when taking cash after an accident might be good idea—and even if you decide to do it, you should still document the accident.

The downsides of taking cash after a car accident

There are a lot of possible downsides to accepting cash to just drive away from an accident that wasn’t your fault:

• Hidden damage. The accident might seem minor, and your car might show no obvious signs of a big problem—at first. If your car starts making a weird noise or handling strangely a day or two later, it’ll be too late.

• Hidden injuries. Shock and adrenaline can compensate for a lot, and you might not notice pain or other signs of an injury until much later. If you can’t make an insurance claim, those medical costs will be on you.

• Extra costs. If your car is damaged enough to keep it at a repair shop for a while, you might need a rental or you might not be able to get to work—and it’s unlikely the wad of cash you took at the scene will cover those extra costs.

• Scams. Sometimes drivers pay out cash to keep you from filing a claim stemming from an accident—and then turn around and file a claim with their own insurance to get a payout.

For these reasons, you should always wait for the police to arrive at the scene and make a report, and at the very least get the other driver’s name and insurance info, even if you agree not to file a claim. You might need that information later if the damage to your car is worse than you thought, or you discover you did, in fact, suffer an injury as a result of the accident. If the other driver refuses to provide their insurance information, get their license plate number—your own insurance company may be able to use it to track down their insurer and reach out on your behalf.

When it's OK to take offered cash after a car accident

Of course, sometimes an accident really is very minor, and taking some money might be the easiest and quickest way to resolve it. But you should be certain of the following before you make that decision:

• The car was unoccupied, so injuries aren't a risk. You have to be absolutely certain you were not injured, which means the only time it’s a good idea to accept the cash is if you weren’t in the car at all when it was hit. If you were in the car, even a minor accident could result in injuries you’ll only become aware of later.

• It was a very minor accident. Only accept cash if you’re 100% certain that the damage to your car is cosmetic and/or very minor—and you know the cost of the repair with some certainty, or it’s something you know you can fix yourself, or that you won't bother getting fixed at all.

• You got a police report. If you have an official record of what happened, you’re protected from future claims—and even if you decide to take cash, you’re probably required by law to report the accident and get a police report.

• You have the other driver's information. If you at least have their identity and insurance info, you can avoid future attempts at fraud.

Keep in mind that insurance companies won’t enforce or honor any agreements you might make with the other driver—by accepting cash and not filing a claim, you’re giving up your leverage over the situation. If you’re certain there won’t be any future problems, taking the cash might make sense—but the key word there is “certain.”