Claiming On Another's Auto Insurance

If you've been in a car accident that wasn't your fault, you may need to file a claim on the other driver's auto insurance. This is known as a third-party claim. The process is relatively straightforward: first, make sure you and your passengers are uninjured, then move your vehicle to a safe location and call the police. Exchange insurance details with the other driver, and take photos of the scene of the accident, including vehicle damage, skid marks, and any other relevant details. You should also request a copy of the police report, as you may need this to file your claim. Contact your insurance company, who will work with the other driver's insurance company to sort out liability coverage. You can also file a third-party claim directly with the other driver's insurance company.

What is a third-party insurance claim?

A third-party insurance claim is when you use the other driver's liability insurance to cover damage or injury caused by a car accident. In this scenario, you are the third party to the other driver and their insurance company. These claims generally hold the at-fault driver responsible for any damages to your vehicle and, depending on your location and coverage, any resulting medical expenses.

In a third-party insurance claim, the liable party's insurance company will negotiate a settlement amount to cover all relevant damages resulting from the accident. This settlement amount could help cover various damages, including economic damages such as medical costs and property damage, along with non-economic damages like pain and suffering.

When making a third-party insurance claim, it is important to notify the police and your insurance company, even if you are not at fault. The police will generate an accident report, which will help support your case when filing a claim with insurers. Your insurance company will then work with the at-fault driver's insurance company to sort out liability coverage.

It is worth noting that if you are in a no-fault state, you will need to use your own insurance to cover any injury claims first. These states require personal injury protection (PIP insurance) for this purpose. You can only sue another driver when certain qualifications are met, which are defined by each state. Property damage claims can still usually be made on the other person's liability insurance.

When to file a claim

• Immediately After the Accident: It is generally recommended to file a claim as soon as possible after a collision. This allows for a timely investigation and can prevent unforeseen consequences, such as the discovery of additional vehicle damage. It also enables you to take advantage of your auto insurance coverage for property damage, injury expenses, and legal costs.
• When You Are Not at Fault: If you believe you are not responsible for the damage to your vehicle, you have the option to file a claim with the other driver's insurance company. This can save you from paying a deductible, and the other company may provide alternative transportation or a rental car during repairs. However, be prepared that the other company may dispute their driver's responsibility and may offer only partial payment.
• When Dealing with an Uninsured or Underinsured Driver: If the other driver is uninsured or underinsured, you may need to file a claim with your own insurance company to seek compensation. This is where your uninsured/underinsured motorist coverage comes into play.
• When the Other Party is Liable: If another driver or entity is liable for the accident, you may have grounds to file a third-party claim against their insurance. This includes situations where teens or distracted drivers cause an accident, or cases where mechanical failure, road conditions, or other factors contribute to the incident.
• When You Have Sufficient Evidence: Before filing a claim, ensure you have gathered key information and evidence. This includes the other driver's name, contact details, license, vehicle information, and insurance details, as well as photos of the accident scene and damages. Contacting the police and generating an accident report can also strengthen your case.
• When You Need Legal Assistance: If your case involves injuries, extensive damages, or complex liability issues, consider consulting a car accident lawyer. They can guide you through the claims process, negotiate with insurers, and help ensure you receive fair compensation.

Remember, each situation is unique, and it's always a good idea to review your own insurance policy and understand your coverage options before making a decision.

Understanding basic insurance types for claims

There are several types of insurance claims, and it's important to understand the differences between them. Here are some of the most common types:

First-Party Insurance Claims: These are claims made by the policyholder or insured individual against their own insurance company. This could include health insurance claims, homeowner claims, or car insurance claims. In the context of auto insurance, a first-party claim would involve using your own insurance company to cover the costs of repairs, damages, and medical expenses after an accident.

Third-Party Insurance Claims: A third-party claim is when you file a claim with the other driver's insurance company if they are found to be at fault for the accident. In this case, you are the third party to the other driver and their insurance company. Third-party claims can cover various damages, including medical costs, property damage, and non-economic damages like pain and suffering.

Liability Insurance: This is the most basic coverage for vehicles and is required in almost every state. Liability insurance covers a victim's claims in medical expenses, property damage, lost wages, and more. It also pays for your legal defence if you are sued over a covered incident, such as a car accident.

Collision Insurance: This type of insurance covers repairs or replacements to your vehicle if it is damaged in an accident with another vehicle or object. While it is optional in some states, it may be required if you have a car loan or lease.

Comprehensive Coverage: Comprehensive insurance covers situations that fall outside of a collision, such as theft, flood, fire, or animal damage. Like collision insurance, it is usually packaged with liability coverage and may be required for a car loan or lease.

No-Fault and Personal Injury Protection (PIP) Insurance: In some states with no-fault insurance laws, you must make injury claims through your own insurance provider, regardless of who is at fault. PIP insurance is often coupled with no-fault insurance and covers medical expenses resulting from an accident.

Underinsured/Uninsured Protection: This type of coverage comes into play when the other driver involved in the accident doesn't have enough insurance to cover the damages. In this case, your own insurance company may cover your medical bills through underinsured motorist coverage.

Using your own insurance to fix the problem

While it's natural to feel that the person who caused the accident should pay for the damages, there are several situations in which you might need to turn to your own auto insurance. Here are some of them:

No-fault states

In states with no-fault insurance laws, you must make injury claims on your own insurance first. These states require personal injury protection (PIP) insurance for this purpose. You can sue another driver only when certain qualifications are met, which are defined by each state. In many cases, there needs to be serious injury or death before you can sue someone else for a car crash in a no-fault state. However, property damage claims can still be made on the other person's liability insurance.

Underinsured driver

If the driver who caused the accident doesn't have enough insurance to cover the injuries they caused, you could sue them for the remainder. But if they don't have any assets, it may not be worth it. In this case, you can turn to your own underinsured motorist coverage, if you have it, to cover your medical bills.

Avoid dealing with the other person's insurance company

You could decide to use your own insurance for car damage, rather than dealing with the other person's insurance company. If you have collision insurance, you can use it to cover damage to your car caused by someone else. However, your insurance check will be reduced by your collision deductible amount. You might get that deductible amount reimbursed later if your insurance company gets reimbursed by the other person's insurer.

Stuck with a car loan balance

If your vehicle was totalled in the accident, insurance should compensate you for the value of the car at the time of the accident, whether you're making a liability claim against someone else or using your own collision insurance. However, in some cases, you could owe more on a car loan or lease than the car was worth. This can happen if you financed most of the cost of the car, or if the vehicle has lost value quickly. Gap insurance can provide the difference between the insurance payment and the loan/lease balance in these situations.

When not to file a claim

There are a few scenarios in which it may be advisable not to file a claim with another driver's insurance company. Firstly, if there is absolutely no damage to the other vehicle or other people's property, you may choose not to file a claim. In this case, consider whether the cost of repairs is less than or comparable to the cost of your policy deductible. It is important to note that even if you decide not to file a claim, there is always a risk of being sued by the other party at a later time.

Another scenario to consider is if you live in a no-fault state. In these states, you must first make injury claims through your own insurance provider, and you can only sue the other driver if certain qualifications are met, such as serious injury or death. However, property damage claims can still usually be made on the other person's liability insurance.

Additionally, if the other driver is underinsured or uninsured, you may need to turn to your own insurance coverage to compensate for any damages or injuries. In the case of an underinsured driver, you could still choose to sue them for the remainder of the cost, but if they have no assets, it may not be worth the effort.

Lastly, if you are unsure whether the other driver is at fault or if there are complexities in determining liability, it may be advisable to consult with an attorney before filing a claim. They can help review your case and determine the best course of action to ensure you receive the full compensation you deserve.

Frequently asked questions