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How Do Car Insurance Claims Work? Everything You Need to Know

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After you’ve been injured or had your car damaged in an accident, you’ll want to collect compensation from your auto insurance provider. Whether it’s before or after you pay for your medical and repair expenses, you’ll have to file an insurance claim in order to begin the payout process. If you’re reading this, then you must have questions about the claims process as a whole. This tell-all guide is here to help you understand when to file claims, which insurance company to file them with, how to file, and the bigger picture of the role claims play in auto insurance. The good news is that car insurance claims are one of the primary functions of car insurance, so it is not difficult for a new policyholder to understand.

What is a Car Insurance Claim?

The primary function of a claim is to notify your insurance provider that you have been in an accident so you can access your coverage benefits. Whose insurance company receives the claim is determined by which driver was at fault -more on the importance of fault will be covered in the next section. In order for a claim to be filed, you will need the names of the drivers involved, your policy number, the other party’s involved insurance info, accident details like photos, and a copy of the police report. From there, the insurance company will begin an investigation with an adjuster, which will decide if they will accept the claim. If the claim is accepted, then the policyholder will receive the benefits that their policies entitle them to. Appeals can also be filed if the claim is rejected. Claims play a role in every type of insurance, like homeowners or businesses, and they all function the same way.

What Is The Car Insurance Claims Process?

With an idea for what insurance claims are, let’s walk step by step through the process of filing car insurance claims and the best practices for doing so. Naturally, the first step is to notify your insurance company of the information covered in the previous section. Again, the best practice for documenting the accident is with pictures. Information you should especially collect is the claim number you are given and the contact information of the insurance agent or adjuster you spoke to with the initial news of the claim.

From there, you should do the following:

  • Request the police report of the accident - You will need this because your insurance provider will ask for the report number. If the report hasn’t been filed, you can do so at the local police department.
  • Be contacted by an adjuster - An adjuster from your insurance company will contact you for you to share information regarding the accident and why your claim should be accepted. They may also ask you to show them your car or take it to a certain auto shop for documentation. From there, the adjuster will determine who is at fault.
  • Receive report from adjuster - The report you receive from the adjuster afterward will include an estimate for the total repairs, which your insurance company will now take into account when providing payout. You’re almost there!
  • Payment is accepted - All that’s left to do is to sign the release form accepting what your insurance company offers as the payout for expenses related to the accident like car repairs.

What Information Should be Reported to The Insurance Company And Adjuster?

In addition to the photo documentation you may have taken at the scene of the accident, there are other things you must inform your insurance company’s adjuster about in order to ensure a smoother and efficient payout.

Provide the following information to your adjuster:

  • The vehicle on your policy that is subject to the claim
  • The driver
  • Scene of the accident and time it transpired
  • Accident description and type of damage
  • Other drivers’ insurance and contact information
  • Contact information of others who have seen or were involved in the accident

Why Does Fault Matter When it Comes to Auto Insurance Claims?

It’s a common practice of auto insurance in North America for at-fault drivers to cover the damages they cause to others on the road. It’s the adjuster’s job to determine who was at fault and which insurance company has to provide a payout. Several states have at-fault laws in place to regulate this practice. Some states, however, may divide the fault up between more than one driver if legislation allows it.

Here’s how fault affects car insurance claims and payouts:

  • You are at fault - File a claim with your insurance company for a payout for the damages you cause.
  • You are not at fault - You can file a claim with the other driver’s insurance company. You have the option to use your own as well.
  • You are in a no-fault state - You file a claim and use your own insurance to pay for your own damages and injuries.
  • You and the other driver(s) share fault - Damages can be limited with both drivers filing a claim with their respective insurance companies.

When to File a Claim Based on Car Insurance Policy

Fault isn’t the only major factor in the claims process. The type of insurance policy that you have also plays a role. If you’re carrying more than your state’s mandatory minimum liability coverage, then you’ll have to decide whether you’ll have to file something like a comprehensive claim or a collision claim.

Here’s how the different types of auto insurance correlate when it comes to filing claims:

  • Liability coverage - In car insurance, liability insurance is the foremost and basic coverage you carry because it’s often required by law. When a liability claim is filed, it is done with the at-fault driver’s insurance.
  • Comprehensive coverage - Comprehensive coverage claims are filed when your car is damaged by circumstances other than collision -like criminal or weather damages. Naturally, this is with your own insurance provider.
  • Collision coverage - You can file a collision claim if you were found to be at fault for an accident and want your damages to be covered while your liability coverage pays out. This can be filed with your own insurance company or the other driver(s) involved. You can also file a collision claim if the fault isn’t clear.
  • Uninsured motorist coverage - If you find yourself in an accident with an uninsured driver at fault, you can file a corresponding claim in order to receive a payout for the damages they are unable to cover.
  • Personal injury coverage - You can file injury claims with your own insurance company to receive payouts for your medical bills if you are injured in the accident.

How do Car Insurance Claims Affect Insurance Premiums?

There is a direct relationship between car insurance claims and your monthly rates. A claim is a notification that you have been in an accident and your insurance provider’s response to this is to increase your rates anywhere from 12% to 50%, depending on how severe the accident and claim was. In fact, a broad claims record is something that insurance companies keep an eye out for when looking at potential policyholders. Several claims suggest that you are a high-risk driver to insure because you get into accidents frequently. The fault also plays a role in the increase in premiums. An example would be that a comprehensive claim causes less of a premium hike than a collision claim would since you weren’t at fault for it. Similarly, if you file a claim with an at-fault driver’s insurance company, then your premiums will not go up. However, it’s best to avoid claims altogether if you wish for affordable rates.

How to Find Insurance Companies With Affordable Rates After a Claim

If you’re shopping for insurance after a claim, you probably would like to know which providers offer the most affordable policies for drivers with a history of claims. Looking at different providers would be your best bet, as everyone handles claims differently.

The good news is that you can shop for the best auto policy by analyzing the following:

  • Policy cost
  • How much coverage you will receive
  • Deductibles
  • Claim requirements
  • Customer reviews
  • Agent response time
  • Available discounts

What Does an Insurance Claims Report Look Like?

Every prospective insurance provider will look at your claims report to assess how much of a risk you are to insure. These reports will typically cover the last five to seven years. It’s not like a driving record where they look at decades. The more claims you have, the higher your premiums are likely to be. These claims reports can also include claims for different types of insurance like homeowners’ or business-coverage, for example. You are allowed to request a complimentary copy of your claims report every year from your insurance company. Another good way to keep track of your claims is to make notes of claim numbers. This way, you’ll be not only familiar with the number of claims you have but also the reason the claim was filed.

How Long Does The Claims Process Take?

A big drawback is that the claims process isn’t an over-and-done thing as it can take months to get a payout. Insurance payouts usually come after you have paid for damages such as repair costs and medical fees in the form of a reimbursement check cut by your insurance company. Claims are typically paid out 30 days after the initial filing. The claim itself can be filed anywhere up to 10 years after the accident, but policyholders typically do it within the week it occurs for a quicker payout. All in all, the amount of time your claim takes to be completed depends on the severity of the accident. The more drivers are involved, the longer it will take.

Can You Negotiate With The Claim Adjuster’s Settlement?

Your insurance policy has an amount that the insurance pays out in the event of a claim. The job of the insurance adjuster is to determine how much of that amount they will payout. If you feel the amount they come to isn’t enough, then you may make a counteroffer.

Here’s how you can do this with a settlement you feel is insufficient:

  • File the initial claim - Already, you’re a couple of steps into the claim process with the damages being submitted, and the payout is requested.
  • The adjuster contacts you - They tell you the settlement and await your signature of approval.
  • Make counteroffers - If you’re not happy with the settlement the adjustor offers, make a counteroffer. You’ll have to provide the reason and evidence that the amount you have in mind would be the ideal payout. Documentation usually helps this case -like medical bills and auto repair receipts.
  • Come to final settlement - The adjuster approves your counteroffer offer thanks to the evidence you provided, and you can now receive your new payout.

What Is The Relationship Between Claim And Deductible?

By now, you’re familiar with all aspects of filing a car insurance claim. The only thing we have to cover is the role deductibles play in it. A deductible is an amount you agreed to pay in the event of a claim. Many policyholders use their deductible as an indicator to file a claim. If you are faced with damage costs higher than your deductible amount, then it would be ideal to file a claim. Let’s say that you damage your car and the total cost to fix it is around $350. If your deductible is $300 or $250, it may be worth it to just cover the damages on your own rather than file a claim. At least doing that will also keep your premiums constant. The insurance claims process is also a math game as you determine whether or not it will truly be worth it.

Great car insurance coverage at low rates is possible with Insurance Navy. Call us today at 888-949-6289 to get a free auto insurance quote. You can also apply online via our website and mobile app or drop in at one of our many storefront locations.

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