The strict legal advice is that everyone has a legal liability to report an accident to their insurers, even if they don't intend to make a claim. This is because an insurance contract is one of 'uberrimae fidei' (utmost good faith) and if you cause an accident (as the neighbour did in this case) it is likely to affect the insurer's view of you as a risk and therefore the premium charged. If you conceal it and are then involved in a serious accident your insurer could deny cover on the grounds of non-disclosure.

But many insurers are loading the premiums of even 'no fault' parties to declared small bumps by as much as 40 per cent, which is completely contrary to 'uberrimae fidei' on the part of the insurer and common sense tells me that unless the cost of the claim is likely to exceed £500 each, both parties will be better off settling it between themselves. (£500 is the cost of a mere scratch these days.) The problem could then come two years later when one of them finds the other has welched on the deal and has used some shyster lawyer to make a personal injury claim. This urgently need to be taken to The Supreme Court and the extent of 'uberrimae fidei' defined because it is plainly ridiculous to penalise a driver involved in a £500 bump with £2,500 of extra premiums over five years, especially where they have an excess of £500 so have to pay for the repair themselves anyway.