I'm Being Sued for $30,000 for a Car I Hit a Year Ago

Imagine this scenario: While parking your car, you accidentally cause a scratch on the body (or a rub mark on the bumper) of a parked car. The owner of the parked car had been in the vehicle at the moment the accident occurred.

The police are called but fail to show.

You both exchange IDs and insurance info, but since the damage is so minimal, you both shrug it off and go your separate ways.

Months to a year or more later, you never hear from the aggrieved car owner and assume they forgave and forgot the incident.

End of story, right? Wrong!

That's the story behind a recent Reddit r/legal post titled "I'm Being Sued for $30,000 for a Car I Hit a Year Ago" in which the OP explains what happened to him:

"I'm being sued for $30,000 for a car I hit a year ago. I was trying to park in a parking space, and I ended up hitting a car while going into the space while the owner was inside it. I was driving a 4,000 lbs truck and I wasn't going faster then 3 mph.

The owner called the cops, but they didn't show up because the car was parked and no injuries. We exchanged information, and the owner showed me an expired insurance, and then they gave me a number to call because it was expired.

The car I hit got a scratch. There wasn't a dent or anything. It was just a scratch mark.

I got a letter saying I'm being sued for the car, mental health, and her health condition. Apparently, the owner couldn't sleep for nights, and they needed to pay for therapy as well. 

On the letter it says I violently hit the car. But there's no dent, it was just a big scratch. If I truly hit it hard, then there most likely would be a big dent."

Stressed out by the threatening letter, the OP is seeking advice on what to do. Should he hire a lawyer or go to his insurance provider?

The Risks of Not Reporting Even a Minor Car Accident

The OP's concern is understandable with respect to how he got himself into this pickle. 

When minor damage happens to a car, there is the temptation not to report it to prevent the risk of having your insurance go up, as well as add a blemish to your insurance record.

This is especially likely if the party receiving the damage is not overly concerned about a scratch on their car and does not want to risk being ticketed for lack of insurance.

However, there are other risks to consider that are far worse when things go wrong and you have not contacted your insurance provider.

These risks include:

1. The Other Party Could File a Claim Later

Risk: The other driver might decide to report the accident days, weeks, or even months later — possibly alleging more damage or injury than originally seemed apparent.

Result: Your insurance company could deny coverage if they weren't informed in a timely manner, leaving you financially liable.

2. Breach of Policy Terms

Risk: Most auto insurance policies require prompt reporting of any incident, regardless of severity.

Result: Failure to report could be seen as a violation of your contract, and your insurer might deny coverage or drop your policy.

3. Hidden Damage or Injuries

Risk: What looks like a minor scratch could hide deeper structural or mechanical damage. Also, people can claim internal injuries that appear later.

Result: Without a timely report, it's harder to defend yourself or prove the original extent of damage/injury.

4. Legal Liability

Risk: If there's no report or record, and the other party sues you later, you'll have no formal documentation of the event.

Result: You may end up personally paying legal fees or settlements that insurance would have covered if you had reported it.

5. Disputes Over Fault

Risk: If you and the other party initially agree not to involve insurance but later disagree on what happened or who's at fault, the lack of a report complicates your defense.

Result: You're left with a "your word vs. theirs" situation with no insurer support.

Is It Ever Okay Not to Report a Minor Car Accident?

This is a grey area, but many car owners do this. It MIGHT be okay if the following three conditions are met:

1. The damage is to your car only, no one else was involved, and the cost of repair is well below your deductible.
2. You're sure there are no injuries, and you didn't hit any public or private property (like a pole or fence).
3. You are not required by state law to report the accident.

Still, it is generally safer to report it or at least inform your insurer without filing a claim. This way, you meet your obligations, and they will have a record if things escalate, as occurred in the OP's situation.

Why You Need an Insurance Agent You Trust 

Insurance policyholders make the mistake of assuming that just because something might have happened to your car, your insurance agent is ready to pounce on it and drive your rates up.

This is not necessarily true when you have an agent with whom you have more than a passing sign-on-the-dotted-line relationship.

Insurance agents can be helpful and can guide you in the right direction to avoid your insurance rate skyrocketing due to a claim or two being submitted.

In fact, a recent Reddit forum discussion titled "Non-Renewal Notice" shows why you need an insurance agent with whom you have a personal relationship.

“ I Didn't Know They Get Filed as Claims Against My Insurance”

According to the OP this happened, and he is wondering why it is so hard to find another insurance provider:

"So I have had AmFam insurance through Costco (live in Wisconsin) for a couple of yrs, which comes with a few perks that I thought would be helpful; non-deductible coverage for 1k to fix a window and $100 for a locksmith if you get locked out.

Well, in the span of 6 months, I ended up using both of these, but didn't know they get filed as claims against my insurance.

Fast forward 6 months, and I just received a notice of Non-Renewal because I have had three claims in the last 3 years (I've had a claim because of lost baggage 3 years ago).

I'm calling around and getting a lot of refusals, and getting a bit scared that I won't find coverage for the house. I tried appealing the decision, but that didn't work either. Is there any way I can drop these AmFam claims? Or known companies that would still cover here?"

The post comments point to where the OP went wrong and why he is having difficulties getting coverage:

This is why it's important to have an agent. A good agent would have never let you turn those claims in, especially in this market.

You're just going to have to call around to see if anyone will take you. I'd lead with the 3 claims thing, though, otherwise you'll be wasting time for you and the agent because most carriers won't take someone with 3 claims. ―Primetime0509 Top 1% Commenter

This!!!! People do not appreciate having an agent anymore. I work for a national company and cannot tell you how many times I have seen $0 claims on someone or claims that should have never been filed. We always tell people to call us before filing anything so we can help navigate the situation and make sure it is something that is covered and well above the deductible...which we usually set at 2500 or 5000 if high value. ―Ok-Jacket-2983

I have seen this too. It's easy to shop online, but a lot of people don't know what type of insurance they need or how much coverage.

They fail to see the repercussions of filing small claims. Knowing what is and isn't covered would prevent some people from even inquiring about a claim and having that on their record.

I agree that people vastly underestimate the value in having an agent. ―Dapper_Dragonfly

Back to "I'm Being Sued for $30,000 for a Car I Hit a Year Ago"

Returning to the original topic, both forum discussions share the message that even with the most minor of accidents or damage involving your car, another car, or other private property damage, the OPs probably would not have the problems they have today if only they had gone to an agent.

In any case, as some thread comments pointed out, the OP’s $30,000 threatening letter is likely a common scam that will bear no fruit if the OP goes to his insurance agent, alerting them to what happened and what is going on.

However, even then, it might be too late now.

"The point is to avoid this exact situation. When you tell your insurance company immediately, they will try to settle the claim before the other person gets any bright ideas. After someone's car is fixed, they rarely care enough to make any sort of Pain & Suffering claim. If they voice their intention to make an injury or suffering claim upfront, the insurance company will start negotiating immediately in an attempt to settle it before the person can get an attorney and start receiving fake medical treatment.

At this point in time, OP's victim has had a year to see therapists and chiropractors, creating a paper trail of the "injuries" and "trauma" they sustained. It's now very likely that they will get their $30,000. If OP had reported this right away, the insurance company might have given the victim $1000 for her pain, and the claim would have been officially settled.

Source: I spent a decade handling auto injury claims for an insurance company." ―S_balmore

Advice Summary for Minor Car Damage from an Accident

Putting it all together, here is a summary of how both OPs would have fared better:

1. Be sure to have an insurance agent you have a trusted relationship with, to discuss problems.
2. Do not file a claim yourself to your insurance company―seek help from your agent first.
3. If there is a minor auto accident (regardless of fault or anything else), be sure to contact your insurance agent for guidance.
4. Wait for the police to show up and file a report that your provider can use to protect you.
5. Do not delay reporting an accident or damage to see what will happen in the off chance the aggrieved will do nothing.
6. Do not ever "make a deal" with the aggrieved party. Let your insurance agent handle the accident or damages―that's what you've been paying for through your policy.

Have You Had Someone from a Past Auto Accident Try to Sue You Afterward with a Bogus Claim? If so, please tell us about it in the comments section below, including how it worked out for you and what you might have done differently.

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Timothy Boyer is an automotive reporter based in Cincinnati who currently researches and works on restoring older vehicles with engine modifications for improved performance. He also reports on modern cars (including EVs) with a focus on DIY mechanics, buying and using tools, and other related topical automotive repair news. Follow Tim on Twitter at @TimBoyerWrites as well as on Facebook and his automotive blog "Zen and the Art of DIY Car Repair" for useful daily news and topics related to new and used cars and trucks.

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