Auto Insurance Claims: Any perils of private settling w/o insurance claim?, minor scratch, side mirror

Question
Scenario (NYS) My wife was involved in a minor incident recently.  She changed lanes and didn't see someone approaching in a blind spot.  As a result, the other car suffered a minor scratch on the right-side mirror.  The police finally arrived and the officer said they should just agree to settle it right then and there (I wasn't consulted during this process). A body shop representative-friend of the other driver arrived to assess the damage while they were waiting for the police to arrive.

The body shop guy said the repairs would cost $125, and both my wife and the other driver signed statements that my wife would pay the other driver $125 to repair the mirror.

My wife also called our insurance company to inform them of the incident before this decision to "settle", as it were.  So, they are in the loop, and someone is supposed to be calling my wife back about that.  They do not know of the agreement to privately settle as of this posting.

Now, I wasn't part of the drafting process of this agreement, and if I was, I would have made sure it was much more specific, and that it had some kind of "final settlement" clause inserted so as to prevent the other party from later filing additional claims.

Ok, that's the rundown.

Questions:  I still want to protect us from any further claims.  What would be the best way to proceed?  Someone suggested a "General Release" to accompany any check, or at least some kind of cover letter that has the verbiage about "By endorsing this check, you agree that no further claims will be made regarding this incident" (I would research better language).  No money has changed hands, by the way...just the signed agreement so far.  

Without resorting to "woulda, shoulda, coulda" stuff regarding this, what kind of document should accompany any check?  Does it need to be notarized, with both parties present?  Obviously, keeping it simpler but still effective would be best.

And lastly, since this is a minor incident being settled privately without traffic citations, but since the insurance company now knows about it, will this result in premiums going up?
This is what we are trying to avoid, yet still keep the insurance company informed so as to protect us legally. We have no prior traffic accidents or tickets.

Thanks!  

Answer
Rick,

I would get the other party to sign a general release before providing them with a check.  Once you have the release signed by the other party (and notarized) you can then issue them a check.  You don't have to sign or give them anything but a check.  I would note on the memo field of the check that the check is being provided "pursuant to full release".

Can your insurance company raise your rates?  My opinion is that they can if you've been in an accident even if it didn't result in any payout on their part.  Will they?  Unfortunately, you'll have to wait and see.

Best regards,

Ernest Ferraro