A Guide To Filing An Auto Insurance Claim

A Guide To Filing An Auto Insurance Claim

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After an accident, auto insurance policyholders can file a claim to their insurance company to request compensation for damage. Filing a claim is beneficial when the out-of-pocket cost of damage exceeds your policy's deductible and can help pay for property damage, medical expenses, loss of salary due to missed work and even legal fees, depending on your coverage. You should always read your policy or contact your insurance agent or provider to understand exactly what's covered under your plan.

What is a car insurance claim?

A car insurance claim is a request for reimbursement from an insurance company for the costs of damage or injury in an auto accident.

There are several types of auto insurance coverages that address different types of incidents. You won't be able to file a claim unless you have coverage for the specific incident in question. The most commonly held coverages include:

  • Liability insurance covers damage to another individual resulting from accidents in which you are at fault. Liability insurance covers both bodily injury (BI), or physical harm to another driver or passenger, and property damage (PD), such as vehicle or structural damage. Some amount of liability insurance is required in every state except New Hampshire.
  • Personal injury protection (PIP) and Medical Payments (MedPay) coverage offer bodily injury reimbursement for the costs of physical harm to you or your passengers in an accident, regardless of who was at fault. PIP may also cover the cost of wages lost due to missed work.
  • Comprehensive and collision insurance cover damages to your car. Comprehensive insurance refers to damage resulting from 'acts of god', or events outside a driver's control; for example, vandalism, impact with an animal, theft or a tree branch that falls on your windshield. Collision insurance covers damage from accidents that happen while driving your car regardless of who was at fault, such as crashing into another car or a tree.
  • Uninsured and underinsured motorist coverage are similar to liability insurance but provide coverage to you in accidents involving an at-fault, uninsured or underinsured driver. When the other driver is at fault, you usually make a claim directly to their insurance provider. However, if the at-fault driver is uninsured, then uninsured motorist insurance will cover your bodily injury and property damage. Similarly, if the at-fault driver has insurance but not enough to cover your expenses, underinsured motorist coverage would pay for the remaining damage.
  • Full coverage refers to a policy that includes all of the insurance coverages listed above.

What your auto insurance covers

Required coverages vary by state, and you will often need to opt-in for a specific type of coverage if you do not choose a full-coverage policy. Liability insurance is almost always required, and several states also mandate PIP. Other coverages, however, are not as commonly required by law.

You should read your policy to understand what coverages you hold, and check with your state's insurance department to understand local regulations. Your car insurance may include all of these coverages or just one, so it's always good to confirm as you seek help with filing your auto insurance claims.

How do car insurance claims work?

There are three primary steps to filing a car insurance claim after an accident:

  1. Gather relevant evidence and documentation: Prepare to file your claim.
  2. Call your insurance company: File a claim and work with a claims adjuster.
  3. Claim settlement and payout: Receive a decision from the insurance company and appropriate compensation.

To help you understand the procedure to file a car insurance claim, we outline these stages in further detail below, including the key steps to take in each.

Gather relevant evidence and documentation

To prepare for filing an auto insurance claim, you should gather all the relevant evidence and documentation regarding the accident. Before contacting your insurance company, you should call the police, record the details of the incident and take steps to limit your liability.

Call the police.

Immediately contact 911 if someone is hurt or there is vehicle or property damage. Your insurance company may want to see a police report prior to processing your claim.

Record all accident details.

Documenting the accident with pictures and a written summary will provide the insurance company with the information needed to process your claim. Be sure to take photos or notes of any car involved, not just your own. This includes information about the other driver, such as their name, phone number, license plate, vehicle model and make, insurance company and policy number.

When writing up your summary, try to remember as much as you can about what happened immediately before, during and after the accident.

Avoid mistakes that could impair your claim.

We typically recommend that you do not apologize or accept fault, and do not tell the other driver about your coverage limits. If your insurance has a higher coverage limit than the other party, they may blame you to avoid paying for any damage. You may be considered liable if you touch the other person, so we recommend avoiding physical contact. However, you can use your own judgment if you believe the person's life is at risk without your assistance. We also suggest you do not accept any cash or agree to settle privately unless you are absolutely sure you do not plan to file a claim, as these actions could hurt your ability to ultimately receive compensation.

Call your insurance company

Calling your insurance company will officially initiate the procedure of filing a claim. After you've prepared all the relevant documents and materials, you should call your insurance company to open a case and work with a claims adjuster to eventually determine your settlement and payout. Keep in mind the statute of limitations deadlines to file your claim in an appropriate amount of time after your accident. You should also check with your provider, as claim submission deadlines can vary by insurer and policy.

Open a case.

When you call your insurance company to initiate a claim, your provider will open a file regarding your case and request for compensation. During this call, you should explain the nature of the accident and claim, including the total payment for damage you're requesting. Offer your insurer as much information as possible to expedite the process.

Work with a claims adjuster.

After the call, your insurance company will read all the relevant material regarding your case, and you will be assigned a claims adjuster, often referred to as a claims specialist. The claims adjuster will determine the value of the damage incurred as well as the appropriate compensation aligned with your policy. He or she will manage your case on behalf of the insurance company and will take the steps needed internally to settle your claim.

Claims adjusters may ask to meet in person, see the damaged vehicle and potentially even specify the repair shop or network to get your car fixed. When speaking to the claims specialist, be sure to ask them to specify how your policy handles vehicle repairs as well as any bodily injury claims and medical expenses. Don't hesitate to ask questions or reach out to your claims adjuster to get more information about your car insurance claim.

File the report before the deadline.

You might wonder when you should file your car insurance claim or how long you have to file the claim from the date of the accident. This varies across insurance providers and states, so be sure to confirm with your provider as soon as possible to avoid any statute of limitations deadlines.

Understand fault.

Depending on the nature of the accident, you should either call your insurance company or the other driver's insurer. You should only contact the other driver's insurance company if they are at fault.

Sometimes fault in an accident isn't clear or can be shared, which is another reason it's important to collect as much information as possible about the incident prior to filing a claim. And some states are also considered no-fault states because they require all drivers to have personal injury protection (PIP), eliminating the need to file a claim with another driver's insurance company.

Claim settlement and payouts

To ultimately settle and pay out your claim, the claims adjuster will determine the cost of the damage, appropriate compensation and any additional steps needed to repair your car. When waiting for your settlement offer, it helps to understand local regulations regarding insurer response times, why claims are rejected and how to negotiate payouts.

Be aware of how long it may take to settle a claim.

Drivers often ask how quickly their claim will be processed, but the answer varies with every state and insurer. Many states have legislation that protects consumers by establishing a time limit for claim settlement to encourage insurers to act promptly. California, for example, requires insurers to notify policyholders of a decision within 40 days of receiving a proof of the claim. Check with your state's insurance department if you believe your insurance company is not processing your claim in a timely fashion.

Know why claims are often rejected.

It's worth keeping in mind that sometimes your claim may get denied depending on the nature of the accident and your coverage policy. For instance, your claim will likely be rejected if there is evidence you violated state law during the accident.

It's also possible your claim may not be paid in full. Your coverages generally have limits, and insurers will only offer payouts for covered claims up to your coverage limits.

Negotiate your settlement offer.

If you are not satisfied with your settlement offer, you can negotiate with your provider; however, you should prepare for these discussions by providing all the necessary evidence to support your claim, such as medical records, police reports and comparable cases. The better your evidence, the more likely you are to receive higher compensation both initially and after negotiation.

If you are still unsatisfied with the terms of settlement, you may need to hire an attorney, but be sure to consider any fees associated with hiring a lawyer and initiating a lawsuit. You may also consider contacting your agent for support or even obtaining alternative coverage for potential future incidents.

When should you not file an auto insurance claim?

You should always check with your insurance agent or provider to confirm what's actually covered under your policy. It's also important to compare your deductible relative to the out-of-pocket cost of repairs to your vehicle, especially in the case of minor accidents or damage, such as a small scratch, bumper damage or fender bender. If the deductible is higher than the out-of-pocket cost of damage, you won't receive any compensation. Furthermore, you'll likely save time and avoid potential rate increases from filing a claim. A rate increase could significantly raise your out-of-pocket costs in the long run. You should also consider not filing a claim if the costs of the damage are only slightly higher than your deductible because the long-term effect of rate increases could outweigh the short-term cost of repairs.

Other considerations when filing a claim

The auto insurance claims process can be complicated. Below, we've provided answers to some frequently asked questions about how to file a car insurance claim.

Will my insurance rate go up if I file a claim?

It is possible that your rate will go up after filing a claim, but rate increases depend on several factors, including your driving history, who was at fault and the extent of damage.

If you have little to no previous claim filings, you may only see minimal rate increases. If your insurance coverage has an accident forgiveness policy, you may even be able to receive no rate increase. Drivers with an extensive history of accidents are much more likely to receive a large rate increase.

If you were at fault in an accident, there is also a greater chance of a rate increase. If you were not at fault, you are much less likely to see your rates go up; however, you should always double check with your provider because some insurers may still apply a rate increase, regardless of the circumstances.

The extent of damage is also a factor because higher payouts are greater liabilities for insurance companies. Insurers mitigate the risk of future payouts of similar value by increasing rates. If the damage is minimal, the size of a potential rate increase is likely smaller.

You can also always consider switching insurance providers, as there may be some insurers willing to offer you a lower rate than what's offered in your current policy.

How do I file a claim against someone else?

At the time of the accident, you should record the other driver's name, license plate number, insurance company and policy number. Afterward, call their provider directly to initiate a claim under the driver's liability insurance. If the at-fault driver is uninsured or underinsured, check with your own provider to determine if you have uninsured and underinsured motorist coverage.

Can you file a car insurance claim without a police report?

We typically do not recommend filing a car insurance claim without a police report. A police report is often the best way to gather detailed evidence about an accident, especially in cases where fault is unclear or shared. Insurance companies also often require police reports to process your claim for reimbursement when there is any damage to drivers, passengers, vehicles or other physical property. To process your claim quickly and efficiently, we recommend sharing the police report with your insurer as soon as possible.

The police will not automatically send the report to your insurer; however, your insurance company still has several ways of obtaining the police report if you do not provide it to them directly. If another driver or passenger files a claim with their insurance company and identifies you as involved in the accident, the police report may be shared between insurers. Additionally, state law enforcement agencies submit police reports directly to the DMV. Your insurance company can access police reports affiliated with your license number from the DMV. For these reasons, you should not assume you can hide a police report from your provider.

Michael Hoffmann is a Senior Research Analyst focused on insurance. He was previously a Technology Editor at The Economist Intelligence Unit and has had prior roles as an ETF and Equity Analyst focused on emerging technologies like artificial intelligence, cybersecurity and cloud computing.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.