What is a Car Insurance Claim?
A car insurance claim is basically a formal request to your insurance company for money after you’ve been in an accident that you're covered for.
You file this with either your own insurance company or the other driver's insurance company. Which company you file with depends on who was at fault and the laws in your state.
To start filing, you'll need to have a few bits of information ready. You'll need your policy number, the other drivers insurance information, photos of all damage, and the police report number.
Most major carriers like Progressive, Geico, State Farm, and Allstate make it easy to file claims right through their mobile apps, their websites, or by phone.
Once you file your claim, your insurance company will assign an adjuster to start the claims process. The claims adjuster will be the one to investigate who was at fault, look at the damage and then decide the amount to payout.
Most insurance companies get these claims processed in about 7-14 days.
How Does a Car Insurance Claim Work?
After submitting your claim the insurance company will assign a claims adjuster to follow through with it. In a lot of cases where the damage is pretty minor, Progressive & GEICO for example will use photo based estimates straight from their apps.
This cuts out the need for an in-person inspection.
With bigger claims however the adjuster will head out to have a look or send it off to a shop in their network. Once they've determined who was at fault, and what it'll cost to fix the car, they'll send you a settlement offer.
Signing the settlement offer gives them the go ahead for payment, usually within 5 business days. They will either send it via direct deposit or mail a check.
Why Does Fault Matter When It Comes to Auto Insurance Claims?
Most states, 46 of them to be exact, use tort (at-fault) liability rules. At-fault means If you cause an accident you have to pay for damages through your liability coverage.
Illinois, Texas, Georgia, Indiana, Nevada and California are at-fault states.
But 12 states plus Puerto Rico use the no-fault system. In this system, you file a claim with your own insurance company, regardless of who caused the accident, and your Personal Injury Protection (PIP) coverage pays your medical bills.
Those 12 states are Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah.
Now some states that do use the tort system also have a system called comparative negligence, which tries to split the blame between drivers. Illinois has a modified comparative negligence system.
It means you can only get damages if you weren't more than 50% at fault. California has a pure comparative negligence system, where you can get some damages even if you were 99% at fault, but the amount will depend on the percentage of fault you have.
When Do You File an Auto Insurance Claim Based on Car Insurance Policy?
Which coverage you submit your claim under all depends on what went on & who's to blame.
Liability insurance pays out to the other driver when you're at fault. Every state has a minimum requirement for liability coverage.
In Illinois for example they are 25/50/20 ($25K per person, $50K per accident for bodily injury, $20K for property damage), in Texas it's 30/60/25 & in California 30/60/15.
Collision insurance pays to fix out the damage to your own car regardless of who was at fault. You file a collision claim through your own insurer and pay your deductible.
Comprehensive insurance kicks in for all sorts of non-collision damage: things like theft, vandalism, hail, flood damage & knocking into a deer.
Unusually, comprehensive claims tend not to raise your premiums anywhere near as much as collision claims.
Uninsured or under-insured motorist coverage is the one that kicks in when the other driver has no insurance, or doesn’t have enough insurance to cover damages. 14% of drivers nationwide don't have insurance, with some states averaging over 20%.
Personal injury protection (PIP) or medical payments coverage is the policy that pays out for your medical bills regardless of who's to blame. In some states this is a requirement.
What Does an Auto Insurance Claims Report Look Like?
When you apply for car insurance, your insurance company checks your CLUE (Comprehensive Loss Underwriting Exchange) report to get an idea of what your claims history is like.
CLUE is a database that keeps track of your claims history over the past 7 years, including car, home and renters claims.
A CLUE report will show the date of each claim, the type of claim, the amount paid out, and who handled the claim.
You can ask for a copy of your CLUE report for free every year, either online at https://consumer.risk.lexisnexis.com/ or by giving them a call at 1-888-497-0011.
How Long Does An Auto Insurance Claims Process Take?
State laws also set some strict rules for insurers to follow when it comes to handling claims.
For example, in Illinois insurers have to accept your claim within 15 days. They also have to make a decision about payment within 30 days after you send them proof of loss. Texas and California have similar laws.
Straightforward claims, where the fault is pretty clear, usually get settled in 2 - 4 weeks. If the claim is more complicated such as injuries or multiple vehicles involved, then it can take 3 - 6 months.
There are also rules called Statutes of Limitation that set out how long you've got to file a claim or a lawsuit. In Illinois you've got 2 years to file a personal injury claim and 5 years to file a claim for property damage.
In Texas and California you've got 2 years to file a claim for personal injury, but in California you've got 3 years to file a claim for property damage.
States Statutes of Limitations:
Illinois: 735 ILCS 5/13-202 (personal injury), 735 ILCS 5/13-205 (property)
Texas: Tex. Civ. Prac. & Rem. Code 16.003
California: Cal. Code Civ. Proc. 335.1 (PI), 338 (property)
Can You Negotiate With The Car Insurance Claim Adjuster's Settlement?
If the settlement offer from the adjuster seems a bit low to you then you can try negotiating. First get 2 or 3 independent repair quotes from different shops.
If you're making a claim for diminished value (that's the loss in resale value after an accident) you might need to get an appraisal. An official appraisal can cost you anywhere from $150 to $400.
Keep all of the relevant documents: repair invoices, rental car receipts, medical bills, lost wages, etc. Send a written demand letter with your counter offer and all your supporting evidence.
Adjusters have the power to negotiate but only within certain limits. They can usually pay about 10-20% above the initial offer without needing to get approval from their boss.
If you still can't come to an agreement then you can take it higher by filing a complaint with your state's Department of Insurance. In Illinois their phone number is 866-445-5364, in Texas it's 800-252-3439.
What Is The Relationship Between a Car Insurance Claim and an Auto Insurance Deductible?
By now, you're familiar with all aspects of filing a car insurance claim. We only have to cover the role vehicle insurance deductibles play in it.
A car insurance deductible is an amount you agreed to pay in the event of an auto insurance claim. Many car insurance policyholders use their car insurance deductible as an indicator to file a car insurance claim.
If you face damage costs higher than your auto insurance deductible amount, then filing a car insurance claim would be ideal.
Let's say that you damaged your car in a car accident or collision, and the total cost to fix your vehicle is around $350. Suppose your car insurance deductible is $300 or $250.
In that case, it may be worth covering the damages on your own rather than filing an auto insurance claim. At least doing that will also keep your auto insurance premiums constant.
Insurance Navy Insures Drivers with Claims History
Insurance Navy works with several insurance companies that will take drivers with claims on their driving record. We actually specialize in insuring high-risk drivers.
We shop around our large network of carriers that include Progressive, Dairyland, Bristol West and National General to get you the best coverage at the lowest rates. You can get a quote by calling 888-949-6289, or applying online or in person at one of their offices in Illinois, Indiana, Texas, Georgia, California or Nevada.
