Is it ever worth paying for small accidents out of pocket? The money you save isn't usually worth the risk.
After a minor fender bender, drivers are sometimes inclined to pay for the repairs out of pocket in lieu of filing an insurance claim. Ostensibly, this saves them money in the long run by keeping their insurance premiums low. Drivers often believe that not filing a claim avoids the risk of getting dropped from their policy altogether. It's a tempting proposition that many people will recommend, but it is a good idea? The short answer is a resounding "no."
Most states have a mandate that all accidents involving more than a certain dollar amount of damage have to be reported, usually between $500 and $1,000. With today's flimsy bumpers and expensive cars, it's almost impossible for an accident to cause less than $500 worth of damage. Even if not reporting an accident seems prudent, it's usually illegal.
After being involved in one accident, it's unlikely that a driver's insurance rates will go up more than the amount it would take for non-reporting to be worth it. Even if rates increase, it will be a steady, three-year drain rather than one massive hit. Financially, a reoccurring withdrawal is usually much more manageable.
If both parties agree to settle up on their own after a small accident, so many things can go wrong. Consider the victim of a fender bender who is promised restitution from the at-fault driver. Later, it might turn out the repairs are much more expensive than the driver anticipated, or that he or she is just plain broke and doesn't actually intend to make things right. Now the victim is in a precarious situation. Because the accident went unreported, it could be difficult to pursue legal action without a police report. Insurance companies may also balk at the prospect of having any responsibility to pay for an accident that, legally, never happened.
If you're the victim and the at-fault driver convinces you to settle without insurance, you are certainly not guaranteed the dollar amount to which you are entitled. For example, insurance companies will often pay for a rental car while your car is in the shop, an expense an average individual might not see as necessary. While you may know a moderately priced body shop that you already trust, the other driver might expect you to find the cheapest place around.
There just aren't enough advantages and far too many risks to justify paying—or accepting payment—for an accident out of pocket. If the accident wasn't your fault, most states have laws in place that prevent your rates from going up. Accidents are the reason you have insurance, so take advantage of what your premiums are paying for.
The long answer, just like the short answer, is a definitive "no."