Pay out of pocket or go through insurance? Minor car wash incident

Dash cam video: https://imgur.com/a/I5SzN0V

Aftermath: https://imgur.com/a/fHwkuOg

Looking for advice on how to handle this properly and whether I’m being reasonable.

I was involved in a very minor incident on private property (conveyor car wash). An employee waved me in and instructed me to put my car into neutral. I did, the car moved forward on the belt, but it appears the gear wasn’t fully engaged in neutral and slipped into reverse, lightly contacting the vehicle behind me (a 2021 Tesla).

There were no injuries, no police involvement, and no visible damage at the scene. The other driver even said it looked fine at the time.

A few days later, the other driver texted me saying he had already been to a body shop and was quoted $550 to repaint, with the trim being “fixed” instead of replaced. His exact text was:

“Good morning, so I just left the body shop, my guy said he can repaint it for $550, he was able to fix the trim piece so that doesn’t have to be replaced. Let me know if you want to pay that or if you’d prefer me go through insurance”

Here’s where my concern starts:

• He initially told me he had a body shop appointment over the weekend

• Then on Monday, he said he had just left the body shop

• On Tuesday, I asked for a written estimate

• He emailed an estimate, but the date/time on it shows it was created after I asked for it, not earlier when he said he had already gone

There’s still no visible damage, and this makes me uncomfortable paying cash directly to the driver. I’m concerned that if I pay him, he could pocket the money, and I’d have no protection if something comes up later.

I told him I would only consider paying if there’s a signed release, which he agreed to, but now I’m unsure whether paying out of pocket is even smart.

My questions:

• For a small incident like this, does paying out of pocket actually reduce risk, or increase it?

• If I do pay out of pocket, should I notify my Erie agent that an incident occurred and that it was settled privately?

• Does notifying insurance but not filing a claim cause any issues later?

• Where do you typically get a release form for something like this?

• What specific wording should be in a release to actually protect me (e.g., known/unknown damages, releasing the insurer, etc.)?

• Is a scanned or emailed signed release generally sufficient?

I’ve been with Erie Insurance for about 3 years and have Rate Lock, which is why I’m trying to handle this carefully and avoid future problems over a very minor incident.

Location: State is Illinois, if that matters.

Appreciate any insight from people with insurance, legal, or claims experience.