Understanding Auto Insurance Claims: What Counts And What Doesn't

An auto insurance claim is a request for reimbursement from an insurance company for the costs of damage or injury in an auto accident. The process of filing a claim involves notifying your insurance company of an accident and requesting access to your benefits to cover any resulting damages or injuries. It's important to note that the types of coverage provided by insurance vary, and you can only file a claim if you have coverage for the specific incident in question. For example, liability insurance covers damage to an individual from an accident where you are at fault, while comprehensive insurance covers damage from events outside the driver's control, such as vandalism or theft. When filing a claim, it is essential to have relevant information, such as the names of everyone involved, insurance policy numbers, details of the accident, and a copy of the police report.

When to file a claim

When You'll Save Money

You should file a claim when the costs of repairing damage to your car exceed your deductible. For example, if the damage is estimated to cost $1,500 to repair and your deductible is $500, you would only pay $500 out of pocket, with the remaining $1,000 covered by your insurance. In this case, filing a claim could help you save money.

When You Cause an Accident or Damage to Someone Else's Property

If you cause an accident that results in damage to another person's car or property, it is generally advisable to file a claim. While minor damage may seem like something you can handle independently, it is often safer to involve your insurer. Their claim agents can work with the other person's insurance company to ensure a fair resolution for all parties involved.

When Someone Hits Your Car

If your car is hit by another driver, regardless of fault, you should initiate the claims process as soon as possible. Gather as much information as you can from the other driver, including their contact details, vehicle information, and insurance policy details. Additionally, collect witness statements, if possible, and take photos or videos of the damage.

When There Are Injuries

If there are injuries to you, your passengers, or anyone else involved in the accident, filing a claim is crucial. Medical expenses can quickly add up, and failing to file a claim can leave you vulnerable to litigation. Inform your insurance company about any medical costs resulting from the accident so they can determine the appropriate payout amount.

When Your Vehicle Is Deemed a Total Loss

If the damage to your vehicle exceeds your ability to cover the loss, you should file a claim through your collision coverage or property damage coverage under your liability insurance. In some cases, the insurance company may consider your vehicle a total loss if the cost of repairs exceeds the vehicle's value. In such cases, they will issue a payment equivalent to the vehicle's value, allowing you to purchase a similar vehicle.

When not to file a claim

When not to file a car insurance claim:

• If you only have liability insurance and didn't purchase collision coverage, your policy won't cover damage to your car.
• If you have collision coverage but the damage to your car is minor, it may be cheaper to pay for repairs yourself rather than filing a claim, as your rates could increase.
• If the repair costs are lower than your insurance policy deductible, it's not worth filing a claim, as your out-of-pocket expenses will be higher than the amount your insurer will cover.
• If the cost of repairs is only slightly higher than your deductible and you can afford it, consider paying for the repairs yourself to avoid a potential increase in premiums at your next renewal.
• If you're in a minor accident that only involves damage to your own vehicle, you may not want to file a claim, as it could increase your premium, regardless of who is at fault.
• If you have damaged your own car, you may be able to get the damage fixed for less than your deductible, so it may be more cost-effective to pay for the damage yourself.

How to file a claim

Filing an auto insurance claim is a relatively straightforward process, but it can vary depending on your insurance provider and the state you live in. Here's a step-by-step guide on how to file an auto insurance claim:

• Inform your insurance company: Contact your insurance company as soon as possible, even if you're still at the scene of the accident. You can do this by calling them or using their mobile app if they have one. Let them know about the incident and find out if your policy covers the specific loss.
• Gather information and documentation: Document as much information as possible about the incident. Take photos or videos of the damage to your vehicle and any other vehicles involved. Get the contact and insurance information of the other driver(s) involved, as well as the contact information of any witnesses. If the police are involved, get a copy of the police report.
• File a proof of claim: Your insurance company will require you to fill out a "proof of claim" form. Submit this form along with any other requested documents within the specified timeframe.
• Supply additional information: Provide any other information or forms that your insurance company requests. This may include details about the accident, your policy, or the damages incurred.
• Understand rental car reimbursement: Find out if your policy includes rental car reimbursement if your car needs to be in the shop for repairs.
• Work with a claims adjuster: After reviewing the materials you submitted, your insurance company will assign you a claims adjuster. The claims adjuster will determine the value of the damage and the appropriate compensation based on your policy. They will be your point of contact and will guide you through the claims process.
• Receive a claim settlement and payout: The adjuster will determine the cost of the damage and the appropriate compensation. They will also inform you of any additional steps needed to repair your vehicle or finalise the claim.

Remember that the specific steps and requirements may vary depending on your insurance provider and your location. Always review your insurance policy or contact your insurance agent to understand exactly what's covered and what steps you need to take to file a claim.

Claim acceptance or denial

An auto insurance claim is a request for reimbursement from an insurance company for the costs of damage or injury in an auto accident. The claim starts the process of accessing your benefits so you can cover any damages or injuries you experience.

Once you submit an insurance claim, the insurance company will begin an investigation. They will consider the damages to the vehicle, as well as the cause of the accident. Once they have collected all the information they need, they will either accept or deny your claim. If they accept the claim, they will provide you with a check based on the type of insurance you have and the value of the damages.

If they deny the claim, it means they will not pay anything. You have the right to ask them why they denied your claim and you can file an appeal if you believe they do not have all the necessary information.

There are several reasons why an insurance claim could be denied:

• Insufficient coverage: It is important to know exactly what your policy covers and what your policy limits are. Your insurance company won't pay beyond your policy limits.
• Waiting too long to file a claim: It is important to report a claim in a timely manner, as insurance companies may deny a claim if they are unable to properly investigate it.
• Non-payment of premiums: If you don't pay your premiums, you could lose your coverage.
• Driving under the influence: If you are found to have been driving under the influence of drugs or alcohol at the time of a collision, your insurance company may deny your claim.

Even if you are not at fault in an accident, your car insurance cost is likely to rise after you make an insurance claim. Insurers are in the business of assessing risk and may consider you a higher-risk driver once you have been in an accident.

Claim impact on insurance rates

The impact of a claim on insurance rates depends on a variety of factors, including the type of claim, the number of previous claims, and the insurance provider's policies.

Number of Previous Claims

The number of insurance claims filed can directly impact insurance rates. The greater the number of claims, the more likely insurance rates will increase. Filing multiple claims in a short period can also lead to non-renewal of the policy by the insurance company.

Type of Claim

Certain types of claims are more likely to result in rate hikes. Dog bites, slip-and-fall incidents, water damage, and mold are red flags for insurers and often lead to higher rates and reduced willingness to provide coverage. On the other hand, a minor automobile accident or a small claim against a homeowner's insurance policy may not always result in a rate increase.

Mitigating Circumstances

Even if the claim is not due to the policyholder's fault, rates may still increase due to mitigating circumstances. These include the number of previous claims, speeding tickets, frequency of natural disasters in the area, and a low credit rating.

Provider Policies

Insurance providers have different policies regarding claim impact on rates. Some providers offer accident forgiveness, where rates do not increase after the first at-fault accident. Other providers may have different criteria for rate adjustments. It is important to understand the specific policies of the insurance company before purchasing a policy.

Frequently asked questions