Auto Insurance Claims: What You Should Know And Claim

Auto insurance is a legal requirement for drivers in most states. It helps cover the costs of injuries and damage to your car and other people's property in the event of an accident. When choosing an auto insurance policy, it's important to consider the different types of coverage available and select the options that best suit your needs. The cost of auto insurance varies depending on factors such as your driving record, the value of your car, and the coverage options you choose. It's recommended to get quotes from multiple insurance providers and compare their coverage options and prices before making a decision. Understanding your policy is crucial, as it outlines what is covered and what is not. Keep in mind that filing an insurance claim may result in an increase in your insurance rates, depending on the circumstances and your insurance company's policies.

When to file a claim

When to file a car insurance claim depends on the types of coverage you have. Here are some scenarios in which you should almost always file a claim:

Accidents Involving Significant Damage

If you damage someone else's vehicle during a significant collision and you're at fault, you should always file a claim. If anyone else involved in the accident sues you weeks or months later, not having reported the incident will make it harder for your insurer to gather evidence to represent you.

If someone else is at fault and offers to pay out of pocket, proceed with caution. Even if your vehicle is operational after an accident, small leaks or damage to certain parts of your engine could cause problems down the road. A repair shop can fix cosmetic and internal issues like a dented bumper or fender. That said, it's easy to underestimate the cost of auto repairs, and you don't want to get stuck trying to chase them down for reimbursement later.

Accidents Involving Injuries

You should almost always file a claim if bodily injury is involved. Some injuries don't show up immediately, and underlying health conditions may increase the likelihood of this happening. Having an open claim and police report helps drivers and passengers protect themselves from the what-ifs. Several states have time limits for filing injury claims, typically 30 days.

Accidents Involving Theft or Vandalism

If your car sustains damages due to a break-in or theft, it's important to notify your insurance company and law enforcement. The comprehensive coverage portion of your car insurance policy will cover losses due to theft and vandalism.

When Not to File a Claim

While filing a claim for damage caused to others is always encouraged, there are instances where you might consider not filing a claim:

• Minor Damage and High Deductibles: A claim might not be necessary if a minor accident only involves you and your car. For instance, if you back into your mailbox, leaving a small dent on your bumper, you could opt not to file a claim to avoid increased premiums.
• When Repair Costs are Lower than the Deductible: If the repair cost is lower than your insurance policy's deductible, it's probably not worth filing a claim. For example, if your deductible is $1,000 but the cost of damage is $800, filing a claim wouldn't make much sense as your out-of-pocket cost is higher than the amount your insurer will cover.
• When Repair Costs are Slightly Higher than the Deductible: If you can afford it, it may be better to foot the repair bill yourself to avoid paying premium increases at your next renewal.

When not to file a claim

While it's beneficial to go through the insurance claim process for the financial and legal protection it provides, there are some instances when you may want to avoid filing a claim.

When the damages are extremely minor

If you're in a fender bender that leaves little damage to either car, you may not want to file a claim since it might increase your premium, no matter who is at fault. However, it can be challenging to reach an agreement with a stranger, and you might find it easier to contact your insurer.

When repair costs are lower than the deductible

If the repair cost is lower than your insurance policy's deductible, it's probably not worth filing a claim. For example, if your deductible is $1,000 but the cost of damage is $800, filing a claim wouldn't make much sense as your out-of-pocket cost is higher than the amount your insurer will cover.

When the claim amount is the same or less than the deductible

If the claim amount equals or is less than the deductible, there's not much sense in filing a claim. It's better to pay out of pocket to avoid a possible insurance rate increase.

When your insurance rate increase will cost more than the out-of-pocket repair costs

The cost of a rate increase over several years may ultimately cost more than the out-of-pocket repairs. On average, an at-fault accident can cost you around $2,000 in premiums over three years, and accidents remain on your claims history for three to five years.

When you have an older vehicle and aren't concerned about its cosmetic appeal

If your car is old and you don't care about its appearance, you could save money by not filing a claim for minor cosmetic damage.

When it's a single-car accident with nominal damage to your vehicle

If you're the only one involved in an accident and the damage to your vehicle is minor, it may be better to pay for the repairs yourself and avoid a possible insurance rate increase.

How to file a claim

Filing an insurance claim is a relatively straightforward process, but it's important to act quickly. Here's a step-by-step guide on how to file a claim after a car accident:

Step 1: Contact Your Insurer

Get in touch with your insurance company as soon as possible, even if you're still at the scene of the accident. You can do this by phone, by filling out an online form, or by using your insurer's app. It's important to notify them of the incident, even if it appears minor, and to find out if your policy covers the loss.

Step 2: Use Your Insurer's App

Many insurance companies now offer mobile apps that can streamline the claims process. These apps often allow you to report a claim, check its status, upload photos, check your deductible, schedule appraisals, and even recreate the events of the accident.

Step 3: Gather Necessary Documents

Your insurance company will require various documents to support your claim. These typically include a "proof of claim" form and a copy of the police report, if you filed one. Keep all paperwork related to the claim, including any bills.

Step 4: Understand Timing and Deadlines

Ask your insurance provider about any time limits or deadlines associated with your claim. For example, find out if there's a time limit for filing claims, submitting bills, or resolving disputes. Also, inquire about when you can expect the insurance company to contact you.

Step 5: Understand Rental Car Coverage

If your car needs repairs, find out if your policy covers a rental car. Understand the estimate and repair process as it relates to your claim. Check with your insurance agent or company about any rental car coverage limitations.

Step 6: Provide Information and Fill Out Forms

Supply your insurance company with any information they request, and carefully fill out all the necessary claim forms. Keep thorough records of everything related to the claim, including the names and contact information of anyone you speak with at your insurance company.

Additional Considerations:

• Protect Your Vehicle: After an accident, take steps to prevent further damage to your vehicle and ensure it doesn't cause injury to you or others.
• Keep Records of Expenses: Keep receipts for any roadside service expenses, such as towing, as these may be reimbursable.
• Understand Your Coverage: Before filing a claim, review your policy to understand your coverage and follow the claims process outlined by your insurer.
• Choose Your Repair Shop: Typically, you can choose the auto repair shop. Discuss with the insurance adjuster the type of parts they recommend for the repairs.
• Understand Rental Car Limitations: If you need a rental car due to the other driver's fault, their insurer may offer rental car coverage. If you're at fault, check your policy for rental car coverage.
• Be Aware of Delays: Delays in vehicle repairs may cause you to reach the rental car limit on your policy before the repairs are completed, resulting in out-of-pocket rental expenses.

What happens after filing a claim

Once you've filed an auto insurance claim, your provider will start an investigation. They will look into the cause of the accident and the extent of the damage to your vehicle. They will either accept or deny your claim. If they accept, they will provide a payout based on the type of insurance you have and the value of the damages. If they deny the claim, they won't pay anything, but you can ask them why and file an appeal if necessary.

After filing a claim, your insurance provider will assign an adjuster to your case, and you will work closely with them to receive your benefits. If your vehicle is leased or you have a loan on it, your lender may need to be involved in the process and might control where the payout is sent and how repairs are made.

If you have full coverage, you will need to pay your deductible—the amount you agreed to pay out of pocket before your insurance company covers the rest. The claims specialist or adjuster will help determine who is at fault for the incident. If you are found to be at fault, you will have to pay your deductible, and your premium will likely increase when it is time to renew your policy.

It's important to fix any damage to your vehicle as soon as possible to ensure it is safe and legal to drive. Your insurance provider may have a list of preferred auto body shops, but you are not required to use them. If your car is in the shop, your insurance may be able to provide rental reimbursement or ride-sharing benefits.

After an accident, it is a good idea to review your car insurance coverage to ensure it still meets your needs. If you are found to be at fault for the accident, your premium will likely increase, so it could be a good time to shop around for a new policy.

How to get the most money from a claim

When it comes to auto insurance, it's important to know when to file a claim and how to get the most money from that claim. Here are some tips to help you maximise your insurance payout:

Know when to file a claim

Firstly, it's important to know when to file a claim. Generally, you should file a claim whenever you'll save money, i.e., when your out-of-pocket costs would be higher than your deductible. You should also file a claim when you've caused an accident or damage to someone else's car or property, when someone has hit your car, and when people were injured in an accident.

Conduct independent research on your vehicle's worth

Before accepting any offer from an insurance company, get an independent valuation of your vehicle. Factors that will affect its value include the make, model, year of manufacture, condition, features, and mileage. You can take your vehicle to different used car yards to get an idea of what it's worth, or consult sites like Kelley Blue Book, Autotrader.com, or Carfax.com.

Provide supporting documentation

Even with an independent valuation, the insurance company may still refuse to make a better offer. To improve your chances of getting a higher payout, provide documents that support a higher valuation, such as accident reports, insurance policies, and maintenance records. These documents will help establish your car's pre-accident condition and support your claim for a higher payout.

Negotiate with the insurance company

Negotiating with an insurance company can be complex and frustrating, but it's a necessary step to get the most from your insurance. Here are some tips for effective negotiations:

• Understand your auto insurance policy: Know the coverage limits, exclusions, and how much you're entitled to in the event of a total loss.
• Provide documents: Have copies of all your interactions with the insurance company, including emails, letters, and phone call logs. Also, write down the details of your discussions and any promises made by the insurer.
• Be patient and persistent: Negotiations may take time, so be prepared to make several phone calls and have multiple meetings before reaching an agreement.
• Stay calm and polite: Maintaining a respectful and polite attitude throughout the negotiation process can help keep things moving forward. Losing your temper could delay negotiations and damage your case.
• Be clear with your intentions: State your preferred settlement amount and provide reasoning and evidence to support your position. Bring copies of valuation reports, appraisal reports, the policy document, and receipts for any aftermarket accessories.
• Speak with a manager: If you're not making progress with the insurance company's representative, ask to speak to their manager, who may have more authority to make decisions.

Contact a car accident lawyer

If negotiations with the insurance company fail, you may need to involve a car accident lawyer. A lawyer can communicate with the insurance company and let them know that you have legal representation. This can help expedite the claim process, as the insurance company will know that you have the option to litigate the matter and obtain a court order if they don't settle.

Remember, it's important to act promptly when dealing with an insurance claim. Provide all the necessary information and documentation to the insurance company as soon as possible to increase your chances of receiving a fair payout.

Frequently asked questions