Understanding Auto Insurance Claims: A Step-By-Step Guide

An auto insurance claim is a request for financial compensation that a driver files with an insurance company after their vehicle is damaged or they are injured in a car accident. The claim starts the process of accessing your benefits so you can cover any damages or injuries you experience. The process can vary depending on the provider and the type of car insurance you have, but there are some general steps to follow. This includes gathering information about the incident, contacting your insurance company, and filing a police report. Once the claim is filed, a claims adjuster will be assigned to review the details and determine fault. After this, the claim will either be approved or denied, and if approved, a payout will be made.

What to do after a car accident

Being in a car accident can be a stressful and disorienting experience. Here are some steps to follow to help you navigate the aftermath and file an insurance claim:

Stop and Assess the Situation

If you are involved in a car accident, the first thing to do is stop your vehicle and move as close to the accident site as possible without blocking traffic. Be mindful of the possibility of fire from the crash. Check yourself for any injuries and try to provide help to other drivers, passengers, or pedestrians involved. If anyone is injured, call for emergency medical assistance immediately.

Contact the Authorities

If the accident is interfering with traffic or involves multiple vehicles, it is important to call the local police. They will assist in managing the scene, ensuring everyone's safety, and creating a record of the incident. Even if the accident seems minor, it is advisable to report it to the police and get a police report number. This report will be crucial when filing an insurance claim.

Exchange Information

If it is safe to do so, exchange information with the other driver(s) involved. This includes names, addresses, and other contact details, driver's license numbers, license plate numbers, and auto insurance information. Additionally, gather information about the make, model, and body style of the vehicles involved, as well as the vehicle identification number (VIN) and a description of the damage.

Document the Scene

Use your phone or camera to take photographs of the accident scene, capturing vehicle damage, license plates, and the overall context of the incident, including street signs and road conditions. If there are witnesses, ask for their names and contact information as their accounts may be valuable for your claim.

Contact Your Insurance Company

Report the accident to your insurance company as soon as possible. They will guide you through the claims process and provide you with specific instructions. Be prepared to provide them with detailed information about the incident, including the location, time, a description of the accident, and the names and contact information of those involved. Your insurance company will likely assign an adjuster to your claim, who will work with you to assess the damages and determine fault.

Seek Legal Advice (if needed)

Depending on the complexity of the situation and the severity of the damages, you may consider consulting a lawyer, especially if you believe you are not at fault and need assistance navigating the insurance claim process.

Remember, it is important to remain calm and follow these steps to ensure your safety and effectively navigate the insurance claim process. Each state and insurance provider may have specific requirements, so be sure to familiarize yourself with the relevant procedures.

How to file a claim

Filing an auto insurance claim is usually a straightforward process. Here's a detailed guide on how to file a claim:

Step 1: Gather Information

First, ensure you have all the necessary information. This includes the names and contact information of everyone involved, insurance policies of both parties, the date, time, and location of the incident, and any relevant photos or videos of the scene and damage. It is also important to obtain a copy of the police report and the names and contact information of any witnesses.

Step 2: Contact Your Insurance Company

Get in touch with your insurance agent or insurer as soon as possible to report the accident. Be prepared to provide them with detailed information about the incident, including which vehicle was involved, the location and time of the accident, a description of what happened, and the insurance information of the other driver. Take note of the claim number and the contact information of the person you speak with.

Step 3: File a Police Report

If you haven't already, go to your local police station and file a report. Your insurance company will request the police report number.

Step 4: Wait for an Adjuster

The insurance company will assign an adjuster to your claim, who will review all the information and determine fault. Provide the adjuster with any additional information they may request, such as photographs or witness contact information. Remember that the conversation with the adjuster will be recorded and used to determine fault.

Step 5: Receive the Adjuster's Report

Once the adjuster has assessed the facts, including your coverage and vehicle damage, they will provide an initial estimate of the repair costs. The insurance company will use this estimate to determine the final payout amount.

Step 6: Approve Repairs or Receive Payment

At this point, you can decide whether to proceed with repairs or receive a payout. If you choose repairs, your insurance company may have a list of preferred auto body shops, or you can select your own. If you choose to receive a payout, you can use the money to cover the repairs or other expenses related to the accident.

Additional Considerations:

It is important to review your policy and understand the specific requirements and coverage of your insurance. Additionally, be mindful of any time limits for filing a claim, as it is best to start the process as soon as possible. If you are not satisfied with the settlement, you have the right to ask questions and file an appeal if necessary.

What an insurance claim covers

Bodily Injury

Bodily injury covers any medical injuries that you cause to another driver. The other driver will file a claim with your insurance company to access these benefits.

Property Damage

Property damage covers any property damages that you cause to another driver. The other driver will contact your insurance company for this.

Collision

A collision policy covers damage to your own vehicle due to an accident, even if you are at fault. You will file an insurance claim with your own provider to access benefits.

Comprehensive

A comprehensive policy covers damage to your own vehicle that is not due to an accident. This may include theft, vandalism, a tree falling on your vehicle, or flooding.

Uninsured or Underinsured Motorist Insurance

File a claim with your uninsured/underinsured motorist coverage after an accident with an uninsured or underinsured driver who is at fault.

Personal Injury Protection and MedPay Insurance

File injury claims with your insurance company under personal injury protection (PIP) or MedPay insurance if you have either type of coverage.

Guaranteed Auto Protection (GAP) Insurance

If you total a vehicle, the insurance company offers a settlement based on its actual cash value. This value may be lower than the amount still owed to the lender. GAP insurance can cover the difference.

Classic Car Insurance

Classic car insurance lets you negotiate a vehicle's value with the insurer. Following a covered loss, this type of insurance can help pay the high cost of specialized repairs or restoration.

Rental Car Reimbursement

If your car is damaged in a covered accident, rental car reimbursement coverage can help pay the cost of a rental car while yours is in the shop.

Custom Parts and Equipment

Custom parts and equipment coverage helps pay the cost of restoring your customizations following a covered loss. Typically, standard auto insurance policies do not cover cosmetic modifications or equipment you've added.

Rideshare or Delivery Driver Coverage

If you drive for a transportation or delivery company, this coverage can help protect you and your vehicle when the company's insurance does not cover you—for example, while waiting for your next passenger or order.

Roadside Assistance

When you break down, roadside assistance coverage can help pay for flat-tire changes, fuel delivery, locksmith services, and towing.

What to expect after filing a claim

Once you've filed an auto insurance claim, your provider will assign an adjuster to your account. You will work closely with the adjuster to receive your benefits. If you have a loan on your vehicle or are driving a lease car, your lender may need to be part of the process and may even control where the cheque is sent or how repairs are made.

If you have full coverage and are filing a claim to cover damages following an accident, you will need to pay your deductible—the previously agreed-upon amount that you pay out of pocket before your insurance company covers the rest.

Different insurance companies have different requirements throughout the claims process. For example, you may or may not have to take your vehicle to an approved mechanic, depending on the requirements of your insurance policy. It is also important to know the filing requirements for your provider. Most insurance providers have a time limit on how long you can file a claim following an accident.

If your damages are more expensive than the total value of your vehicle, the insurance company may consider it to be a write-off. This means that instead of paying to repair your vehicle, they will issue a payment that is equal to its value. If you have a loan on your vehicle, it may pay off the remaining balance. If you own your vehicle, you can use the cheque to buy another vehicle of a similar value.

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 assess risk, and it's possible that they may consider you a higher-risk driver once you've been in an accident, regardless of the circumstances.

Total loss claims

A total loss claim is made when a vehicle is damaged beyond repair or destroyed. The process for making a total loss claim is similar to the general auto insurance claim process but with some differences.

Firstly, it is important to understand what constitutes a total loss. A vehicle is deemed a total loss when the cost of repairing it is higher than the actual cash value (ACV) of the vehicle. ACV is calculated by taking the replacement value of the car and subtracting the depreciation or "wear and tear costs". The specific criteria for a total loss designation vary among states. Some states use a “total loss threshold” (TLT), where damage only needs to exceed a certain percentage of the car's value. Other states use the “total loss formula” (TLF), where the sum of the repair costs and the salvage value of the car must exceed the car's ACV.

If you believe your vehicle is a total loss, the first step is to file a claim with your insurer, as you would for any accident. You will need to provide information such as the names of everyone involved, your insurance policy number, the other driver's insurance information, and details of the accident. It is also helpful to provide photographs or video evidence from the scene of the accident, as well as a copy of the police report.

After you have submitted your claim, a claims adjuster will inspect your vehicle to assess the damage and determine if it is indeed a total loss. If your vehicle is declared a total loss, you will typically be required to remove your license plates and personal items, leave the key with the claims adjuster, and send in any additional keys. You will also need to fill out the necessary paperwork and, if you lease your car, contact the leasing company.

Once you agree to the total loss designation, the insurance company will issue a payout. The amount of the payout will be based on the ACV of the vehicle, which is determined by its make, model, mileage, condition, and other factors. If you own the vehicle, you will receive a cheque for the ACV minus your deductible. If the vehicle is leased or financed, the compensation will go to the leasing or financing company. It is important to note that the settlement amount may not cover the full amount of your car loan or lease, and you may be required to pay the remaining balance out of pocket.

If you disagree with the total loss designation or feel that you are not adequately compensated, you have the right to negotiate with the claims adjuster or seek legal assistance.

Frequently asked questions