Auto Insurance Claims 101

If you have a car,  there is a good chance that you may need to file a claim in the future. The more you know about the process of auto insurance claims 101, the easier and more painless the process will be.  It’s always a good idea to take the time to understand exactly what is a car insurance claim and what will be expected of you before you get into an accident.

Read on to learn how to file a car insurance claim and other important claim information. If you want to start shopping for the best car insurance that will provide coverage for a number of accidents, use our free quote comparison tool.

How to File a Car Insurance Claim

Whenever an auto accident happens, the first step to recovering the cost of repairs is filing a car insurance 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.

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.

Read more: What is the claims adjuster’s role in the car insurance 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 car insurance 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 meantime, 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 bring 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 car. Either way, a deductible will apply to any loss that you file on 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.

Other Car Insurance Claim Considerations

If you are not at fault for an auto accident, you have a few choices about how to handle the claim. If you file a 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.  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.

Car Insurance Claims Process

Insurance can be complicated, but by taking the time to understand your policy and the car insurance 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 professional 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.

The vital role of claims in the insurance industry, is paying people for their insured losses. This is what the insurance industry is supposed to do, at the most basic level.

Case Studies: Understanding Auto Insurance Claims

Case Study 1: The Comprehensive Coverage Dilemma

John, a responsible driver, parked his car on the street overnight and found it vandalized the next morning. He had comprehensive coverage on his insurance policy, which includes vandalism and non-collision damages.

After filing a claim, providing evidence, and having the damages assessed, John received a settlement. He promptly repaired his car without financial burden.

Case Study 2: At-Fault Accident and Subrogation Process

Sarah rear-ended another vehicle in a car accident. No injuries were reported, but the other driver’s car suffered substantial damage. Sarah promptly reported the accident to her insurance company and filed a claim. As the at-fault driver, her insurance covered the damages to the other vehicle.

Sarah had collision coverage, which also covered her own car’s repairs, minus the deductible. Her insurance pursued subrogation to recover the expenses from the other driver’s insurance. Once the subrogation claim was accepted, Sarah’s insurance reimbursed her deductible.

Though the process took time, Sarah ultimately received compensation for the accident’s damages.

Case Study 3: Direct Third-Party Claim

Lisa was hit by a driver who ran a red light. She filed a claim directly with the other driver’s insurance, providing evidence. The third-party insurer accepted liability, approved her claim, and offered a settlement. Since she was not at fault, there was no deductible, and she received a rental car during repairs.