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What Is a Car Insurance Claim?
When you have an auto accident or otherwise experience damage to your vehicle, you can file a claim with your car insurance policy. After you pay your plan’s deductible, or out-of-pocket amount, the insurance company will cover the remaining repair expenses up to the limit of your policy, according to auto insurance website, The Zebra.
When Should You File a Claim?
CarInsurance.org recommends filing an auto insurance claim when the estimated repair costs exceed your out-of-pocket deductible. For most policies, you can choose a deductible from about $500 to $2000. Let’s say you have a $1000 deductible and have a minor accident that damages your bumper. If your mechanic quotes you $800 for repairs, you should not file an insurance claim.
According to Credit Karma, you should also consider the increased insurance premium that may result from filing a claim. This may not be a concern if you have an auto insurance policy with accident forgiveness, however.
After notifying the insurance company about the accident, you should take your vehicle to a mechanic you trust for an estimate. Then, do some research to see how much you will pay for coverage after filing a claim, from a source such as the State of Insurance report from The Zebra. Multiply that increase by three and add your deductible. If the result exceeds your estimated repairs, you may want to pay out of pocket.
In some cases, you should always file an insurance claim. Examples include the following:
- If you finance your vehicle, your auto loan contract may require you to file a claim after any type of auto accident. You might also have to provide a receipt to the lender to show that you repaired the vehicle. Even if you do not file an insurance claim, the lender will receive notice as the owner of the vehicle, if law enforcement submits an accident report.
- You should always file an insurance claim after an accident involving injuries. This provides the opportunity for you and other injured individuals to obtain costly medical care. If you potentially caused the accident and do not file a claim, you open yourself up to an expensive lawsuit.
- You do not need to have a fault determination to file a claim. When you file, the insurance adjuster will investigate to determine whether your policy covers the related expenses, including whether your actions played a role in the accident. If the insurance adjuster finds that the other driver was at fault, your insurer will pay your claim and seek reimbursement from the at-fault driver’s insurance policy.
If you have collision coverage, you can file a claim through this policy if you have significant damage to your vehicle. If you have only liability coverage, you will not receive compensation for repairs in an accident unless another driver caused the crash.
Minor single-car accidents usually do not require a claim, especially if you only damage your own property. For example, you might not want to risk the increase in insurance premiums that comes from filing a claim if you simply back into your own mailbox.
What if You Have an At-Fault Accident?
Contact your insurance company right away if you have an accident with another vehicle that involves significant property damage or any injuries. If an investigation finds that you were at fault, your liability coverage will pay for medical bills and property damage for the other parties involved. This policy also covers your legal costs if anyone sues you for expenses resulting from the accident.
In this case, if you do not report the collision shortly after it happens, you may lose the chance to file a claim with your liability policy. If that occurs, you would be responsible for the full cost of the accident if the other driver sues.
What if Another Driver Causes an Accident?
File a claim with your insurance company even if the other driver tries to negotiate a financial settlement with you. Unfortunately, without going through the insurance company or the legal system, you have no recourse if they fail to pay up as agreed. In some cases, unscrupulous drivers even provide fake contact information after causing a collision.
Even if it looks like your vehicle only sustained minor damage, you cannot tell if the car has more extensive issues after a crash unless you have an evaluation by an expert mechanic. In this case, you should at least get an estimate by a mechanic before deciding whether or not to file an insurance claim.
What Is the Process of Filing a Claim?
You can file a claim either by calling your insurance company directly or submitting the required information through the insurer’s website or mobile app. After you do so, the insurance adjuster will take responsibility for investigating the accident and will gather damage photos, accounts from accident witnesses, and the police report. The insurance company will also pay the repair shop directly for your damages, minus the deductible, if you have collision insurance.
After this step, the process varies based on the type of insurance coverage you have and whether you live in a fault or no-fault state for auto insurance. In a no-fault state, you must file a claim through your own insurance company. You cannot seek compensation from an at-fault driver except in cases where you have serious injuries as defined by state law. Value Penguin notes that if you do sue, you must do so within the statute of limitations established by state law.
You may receive only a small insurance rate increase after an accident, especially if you were not at fault and you have a clean driving record overall.
Check this out if you need additional information, resources, or guidance on car insurance.
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