A Complete Guide to Car Insurance Claims
The most common types of auto insurance claims are rear-ending accidents and windshield damage, but not every minor accident needs an insurance claim. If you want to lower your auto insurance rates, knowing when to file a car insurance claim is just as important as knowing how. Learning how to file an auto insurance claim and more in our Complete Guide to Car Insurance Claims below.
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UPDATED: Jul 16, 2021
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If you haven’t been through the car insurance claims process before, knowing what to do can be a bit tricky. Depending on what type of claim it is you might need to talk to your own insurance company’s claims department and the insurance claims department of the other person if there was a car accident. This guide will provide you with an overview of what to expect and how the process works.
Most common car insurance claims
The most common types of car insurance claims are:
- Rear end Crash
- Windshield Damage (Chipped, cracked, etc.)
- Damage to a Parked Vehicle
- Backup Accident
- Hail Damage
- Single Car Crash
- Car Crash at an Intersection
- Stolen Vehicles
- Multiple Car Crash
- Animal Collisions
- Personal Injury (Whiplash, Back Injury, etc.)
Many of the most common claims can cost a couple thousand dollars but a few, depending on how severe they are, can costs tens of thousands if not hundreds of thousands of dollars. While no one knows ahead of time which coverage and protection they will end up needing, being prepared for some of the most common car insurance claims can help ensure you don’t suffer a serious financial hardship if you need to make a claim.
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When to file a claim and when to pay out of pocket
When you have a claim that isn’t an at-fault accident, your insurance rates won’t go up if you turn a claim in. If you have a comprehensive claim you’ll need to pay out of pocket if the damage doesn’t exceed what your comprehensive deductible is.
If you have an at-fault car accident you don’t necessarily need to handle it through your insurance company. When the damage is minor you can try to work something out with the other party where you pay for it out of pocket. A common arrangement is for them to take the car to a repair shop and you pay the bill to get the car repaired.
A good reason to take care of small car accidents out of pocket that don’t involve bodily injury is that your car insurance rate will go up if you report the accident to your insurance company unless you have accident forgiveness on your policy. You will likely save quite a bit of money by just paying for a small accident yourself versus how much your policy will go up for the next three years.
You just contact your own insurance company for most types of claims. The exception is if another person caused an accident you were involved in. You can wait for the other party to report the claim to their insurance company or you can contact them yourself to get the ball rolling.
In this case, they’re going to need to talk to you anyway to get your side of what happened and arrange to get your car repaired. If you were physically injured you should definitely call their insurance company or have someone do so for you. Being proactive and calling can speed things up instead of relying on the other person to start the claims process.
Being prepared prior to filing a claim
Before you file a claim, you will need to collect some information. You will need your policy number which you can find on your evidence of insurance card. If you’re calling about a car accident and there was a police report you will need to give the insurance company the report number.
If it’s a car accident you’re contacting your insurance company about you will need to have on hand the other person’s information. This includes their name, phone number, the insurance company, and their policy number.
How to make a car insurance claim
You can find the phone number to call when you need to file a claim on your evidence of insurance card. You will need to navigate through a phone tree and indicate what type of claim you will be filing. Eventually, you’ll talk to a person who will collect information about the accident and your contact information. Depending on the type of claim, you’ll get a call back from an insurance adjuster who will handle the claim. If it’s something like a towing claim, they’ll just get a tow truck out to you.
Most insurance companies also let you file a claim online. Just go to the insurance company’s website and, usually at the top of the page, there will be a link that says “file a claim”. You’ll input all the information about the claim and hear back either by someone calling you back or by email.
Do I need a police report?
Small accidents don’t need a police report. In many parts of the country, police won’t respond to small accidents where nobody was hurt and only property damage is involved.
You can file a report about an accident after the fact by contacting the police department where the accident took place. You will need to drive to the police department but some do allow you to file a report online.
Whether you need to file a police report depends on the state you are in. Some have a time limit to file one, such as five days. They also usually have a dollar amount that the accident needs to exceed in order to file a report. You also need to file a report if the other person fled the scene of the accident and if there are injuries.
You will want to have the name of the other driver(s) and the insurance information for the police report. If there are any witnesses their names and contact information should be collected. It’s also a good idea to take pictures of the cars that were involved including the damage that resulted from the accident.
Do I need a lawyer?
The majority of car accidents don’t need the involvement of a lawyer. If there is just property damage involved getting a lawyer involved doesn’t make a lot of sense, for example. When there are serious injuries involved than getting a lawyer involved can make sense.
Ads from law firms that appear on TV make it sound like you need to instantly call a lawyer for any type of fender bender. The truth is, most of the time insurance companies are going to take care of the people involved in a car accident in a fair manner.
The severity of physical injuries determines whether you should contact a lawyer. If you didn’t have any broken bones and didn’t miss more than a few days of work it’s probably not worth contacting a lawyer. If you are checked out by a doctor who feels you’re not at risk for complications, this holds true as well.
When you should contact a lawyer is if you have broken bones and a lengthy stay in the hospital, or if someone died. If you’re going to have to stay out work for an extended period or if there is pain and suffering involved are other reasons for contacting an attorney. The amount of damages should also be high. You don’t want to pay a law firm $5000 if you’re only going to get $10,000 for the claim, for example.
Car insurance claims process
The claim process starts once someone calls in the claim or files it online. It will get assigned to an insurance adjuster who will get the claim resolved. If it’s a glass or towing claim it can get resolved in just one phone call. For most claims, an adjuster will get hold of someone filing a claim within a day.
How long do claims take to process?
As indicated, glass and towing claims are simple and quickly handled. Claims involving comprehensive can also usually be handled relatively quickly. If you agree to take your car to a pre-approved auto repair place it really just depends on when they can get your car in. If your car was stolen then the claims process can take some time as they want to give it time to see if the car will be recovered.
If there’s no dispute who caused a car accident, the matter can be handled pretty quickly. When there is a dispute about who caused it, or if it was partially the fault of both drivers, the insurance companies will need time to assign blame. When everyone cooperates the damage can be fixed usually within a few weeks.
Claims involving bumps and bruises will also be handled pretty quickly with the insurance company taking care of the bills. If there are serious injuries, then the claims process can take a long time to get sorted out. Depending on the severity of the injury(s) the process can take months to be completely settled.
How does the claims process work?
Towing and glass claims are very easy to handle. They’ll either send out a tow truck or a glass company and get things handled right away. If you file a comprehensive claim, they can either send you to one of their pre-approved auto repair places or work with you if you want to use your own.
You might need to work with two insurance companies in the event of an accident, especially if there is a dispute about who caused it. The insurance companies will need to talk to everyone involved to get their side of the story, and they’ll look at the police report if one was filed to determine who is at fault. If the insurance companies don’t agree who is at fault they can handle this disagreement through an arbiter.
If property damage and injuries are involved there will likely be more than just one insurance adjuster involved. Most insurance companies have some insurance adjusters that just handle property damage and others that handle bodily injury.
Insurance Carrier vs Repair Shops
Most insurance companies have a list of pre-approved shops they can send people with claims to. An insurance adjuster will look at the car and determine how much money it will take to make repairs. The shop will then fix the car and you’ll be on your way.
You can choose to use your own repair shop but it might slow the process down. The insurance adjuster will need the repair shop’s contact information and will work with them to establish how much it will cost to fix the car. The insurance adjuster isn’t going to pay an inflated amount to repair the car which is sometimes an issue when you choose your own repair shop.
Another reason to use a pre-approved repair shop is that if further damage is exposed once they start doing repairs the adjuster won’t need to see the car a second time. If you use your own shop, the adjuster will have to re-inspect the car.
In either case, don’t repair anything until the adjuster has had the chance to inspect the vehicle. They need to see the damage before they can authorize repairs.
Getting paid for your claim
If you have a glass claim, you will need to pay your comprehensive deductible unless you have optional glass coverage on your policy. If you have this coverage you will pay $100 to have your glass replaced and nothing if it’s getting repaired. You will pay the glass shop the deductible and the insurance company will send them a payment for the rest.
In many cases, they will directly pay the repair shop while you pay them the deductible, if applicable. They will usually also directly pay the doctor’s office or hospital for your medical bills. If you are getting paid for something like pain and suffering they will send you payment for that directly.
They can also send you payment and you pay the repair shop yourself. Or, you might decide not to fix the car in which case they will cut you a check. They will also send you a check directly if your car is totaled or stolen.
How are payments calculated?
The insurance adjuster will calculate payments. For your car, they base this on both the parts involved and labor. They’ll cover a reasonable amount to get the car back into the condition it was before the accident occurred.
If your car was stolen or totaled they will offer a settlement for how much it was worth when the incident occurred. They might look at how the same car costs at local auto sellers or other methods of determining how much a car is worth. The dollar amount they assign the car is based on depreciated value.
If the car is newer and you have a loan it is entirely possible they will offer you an amount that is less than what you owe. This is because cars lose a lot of value once they are driven off the lot. When you buy a new car, you have the option of putting gap coverage on your insurance policy. This will cover the gap between what you owe and what the car is worth if it were to be totaled or stolen.
For injuries, they pay what it cost to get checked out by a doctor. They will also cover documented wage loss. They will look at your medical reports to offer you compensation for pain and suffering. If you are going to need more surgery at a later date they will also factor that into what they offer you as a settlement. If there are serious and ongoing injuries you will probably want to get a lawyer involved and not waive your settlement options before they go over the offer.
Tips for Getting a Fast Car Insurance Claim Payment
To get your car repaired quickest you should take it to one of their pre-approved repair shops as this really speeds the process up. You will also want to respond promptly if the insurance adjuster or car shop needs some information from you.
If the accident was the other person’s fault you should contact their insurance company yourself instead of relying on them to report the claim. They will need to talk to their insured before they cover your damage but this process is quicker if you’re proactive.
What to Do If You Are Not Satisfied with Your Claim
You have options available if you’re not happy with what the insurance adjuster is offering you. You can contact your insurance agent and let them know you’re not happy. They can contact the adjuster and try to get your offer increased. Some insurance companies also have a complaints department you can talk to.
You can send documents to the adjuster or their supervisor showing why you should receive a higher settlement. You can look at your policy and see if the policy includes arbitration or appraisal services which can be used to settle the dispute.
If you are unhappy with what you are being offered, you can contact your state’s department of insurance. They can’t resolve every complaint a person may have with an insurance company, but, they do review some claims. You can have your case decided by an independent arbiter. Your other option is to contact an attorney if there is a huge gap between what you think your case is worth and what is being offered.
Common Reasons for Having Your Car Insurance Claim Rejected
If your policy hasn’t been paid for the date the accident occurred, the claim will be denied. If you were using your personal car for business purposes, the claim will also be denied. You will also be denied if you don’t carry the relevant coverage. If your car is stolen and you don’t have comprehensive coverage, for example, you aren’t covered.
You have a set period to report a claim. When you take to long the claim, it won’t be covered. If an excluded driver was at the wheel, the claim will be denied. If you fraudulently made a claim, it’s not only not covered but is also a felony that the adjuster will report to the police. You have 30 days to change the car on your policy if you get a new one. If you exceed this time it is not insured.
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Car Insurance After a Claim
Once the claim has been taken care of the policy will continue as is. The insurance adjuster will note the policy with the information about the claim and how much was paid out. This information is also put into a national database of claims that insurance companies operate. This means that if you check other insurance companies for a quote they will know about your claim history for the previous three years.
Car Insurance Rates
If you have a comprehensive claim or the accident wasn’t your fault, your car insurance rates won’t be impacted. If the accident was your fault your rate will go up on the next renewal of the policy. The only time it won’t be is if the policy has accident forgiveness.
Some insurance companies offer accident forgiveness to their best customers free of charge while other insurance companies charge extra for this. This usually only applies to the first car accident after which this coverage is removed. Each insurance company handles this coverage differently so it’s important to read your policy.
How long are rates affected by a claim?
Your car insurance rates will be increased for three years after an at-fault accident has occurred. In general, the rate you pay decreases a bit on each renewal. Once the car accident is three years old the surcharge for having an at-fault car accident will be completely removed.
Should you switch insurance companies after filing a claim?
Once you’ve reported a claim it is put into the national database so every insurance company will know you have an open claim. The database will be updated once the claim is completed.
If you’re not happy with the amount that your policy went up on renewal, you can check around with other insurance carriers. It’s often the case that the insurance company you were with is going to offer the best rate, especially if you’ve been insured with them for a long time. Insurance companies don’t want to lose a good customer. They’re not as willing to offer a good rate to someone who has an at-fault accident that they don’t currently have insured.