Auto Insurance Claims 101
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UPDATED: Mar 13, 2020
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Many people have auto insurance without ever needing to use it. The monthly premium provides peace of mind knowing that if something happens, the damage will be covered. Unfortunately, accidents do happen and you may someday need to use your car insurance. In order to make the process as easy and painless as possible, it’s a good idea to take the time to understand exactly how claims work and what will be expected of you.
How to File a Car Insurance Claim
Whenever an auto accident happens, the first step to recovering the cost of repairs is to file a claim with the insurance company. Even if you do not have full coverage insurance, it’s a good idea to contact the company anyway to report the accident. This fulfills your obligation to report all accidents and ensures that the other party does not make a falsified claim against you.
- Check out Top Auto Insurance Claim Questions
Some insurance companies enable the insured to file a claim through the insurance agent, but most companies prefer that you call the toll-free claims number instead. Some companies also enable online claim reporting, but if you file online you will still be contacted by an adjuster to complete the claims process.
Filing a claim will take approximately 15 minutes, although the time frame may change depending on the complexity of the claim. The representative will ask questions to confirm your identity, verify what happened and make note of the damage. It’s easiest to answer the questions if you have a police report available, but it’s unnecessary as long as you exchanged information with the other person at the scene of the accident.
Once the claim has been filed, the representative will provide you with adjuster information, discuss your coverage and make arrangements for the vehicle to be inspected. If you do not have coverage that applies to the loss, they will advise you of this; depending on the situation, you may still need to have the vehicle inspected to assist with the liability determination.
What Happens After a Claim is Filed?
Depending on the loss facts, an adjuster may or may not need to complete a liability investigation after the claim has been submitted. This will require the adjuster to get a recorded statement from everyone involved in the loss. They may also interview witnesses, order a police report or do further investigations. Once liability has been determined, the adjuster will advise you of the findings and explain how your coverage will be applied to the loss.
In the meanwhile, you will get your vehicle inspected. Depending on your insurance company, this may require you to obtain individual estimates, bring the vehicle to an inspection location, have the adjuster come out to look at your vehicle or simply bringing the car to an affiliated body shop. Regardless of where the inspection occurs, the adjuster will need to assess the damage and determine how much repairs will cost.
After the estimate has been completed, the insurance company will offer a settlement based on the cost of repairs. If the vehicle is not repairable, the settlement will be based on the replacement value of the damaged auto. Either way, a deductible will apply to any loss that you file against your own insurance. If you are not at fault for the loss, the deductible may be reimbursed to you at a later point.
Once the settlement check is received, you can have the vehicle repaired. If the body shop discovers additional damage beyond what the initial estimate covered, the shop will submit a supplement request to the insurance company to make up the difference. During the repairs, you may be eligible for a rental car if your policy covers it.
If you are not at fault for an auto accident, you have a few choices about how to handle the claim. If you file the claim with your insurance company and have the applicable coverage, your insurer will settle the claim with you. You are responsible for paying the deductible in this situation. After the claim has been settled, the insurance company will file a claim against the other party’s insurance in a process called subrogation.
Once the subrogation demand has been accepted by the third-party carrier, they will reimburse the full cost of repairs to the not-at-fault insurer. At this point, the insurance company will be able to reimburse your deductible to you. This process may take several weeks or months depending on the severity of the claim and whether liability is clear.
Your other option is to file the claim directly with the third-party carrier. If you know that you’re not at fault, you can call their claims department and start the claim through them without needing to use your insurance. The claims process for this is the same as for filing with your own insurer, although it sometimes takes longer for the settlement to be received.
Filing a third-party claim will allow you to forgo paying your deductible. It also makes you eligible for a rental car regardless of what coverage you carry on your own vehicle. On the other hand, the insurance company may not accept liability and the claim could be denied, requiring you to use your own insurance after all.
Insurance can be complicated, but by taking the time to understand your policy and the claims process before an accident happens you can be prepared for an accident. If you have any questions about a specific accident, you should be able to contact your insurance adjuster to clarify situations regarding your claim. He or she will be happy to discuss your situation in detail and advise you on the next steps of the process.