8 steps to filing an auto insurance claim
More than 220 million motor vehicles clog America's roads today, making it likely
that someday you will have an accident and file an auto insurance claim.
The good news is that in most auto accident claims, personal injury
isn't the problem.
"Sixty-three cents of every claim dollar goes to [pay for]
physical damage on your car," says John Eager, senior director of claims
services for the National Association of Independent Insurers, based in Des
Although a personal injury claim may require a different
level of proof and persistence than a vehicle damage claim and insurance regulations
vary from state to state, the basic steps to take information needed to file
a claim are fairly similar.
For the most part, the claims process for vehicle damage is simple:
You make a claim, the adjuster comes out to estimate the cost to repair the
damage, the insurance company sends you a check for that amount and you use
it to pay for the repairs.
Every insurance claim requires some kind of proof of damage
or injury before a carrier will pay. On auto claims, Eager says, there are five
elements of proof that will come into play: what you tell the insurance companies,
what the other party tells them, a police report, witnesses and physical damage
at the scene.
Step 1 (at the accident scene):
Call 911 if someone has a life-threatening injury. If there's no emergency,
don't tie up 911, but get any needed medical attention and call the police directly.
Remember, you need that police report.
Step 2: Exchange license plate
numbers, contact information and auto insurance information with the other parties
involved. Most states require drivers to have an insurance identification card
in the vehicle and it will provide most of the pertinent information, Eager
says. Fill in any gaps, though. Make sure to get phone numbers.
Step 3: Look for witnesses who
will be willing to tell what they saw and get their contact information as well.
If you are unable to gather information at the scene, the police report can
be a back-up source of information on the other parties involved and witnesses.
"There are a lot of jurisdictions where the police officers may try to
avoid taking an accident report, assuming that the damage is under $500,"
a typical insurance deductible, warns retired insurance adjuster J.D. Howard,
who co-founded the Insurance Consumer Advocate Network, based in Branson West,
Mo. "Insist on a report. If [officers] won't file a traffic accident report,
insist on an incident report. You want an independent, disinterested record
of what happened. You'd be amazed at how often the other driver's story will
If the accident happens in a parking lot, an officer may plead
no jurisdiction. Insist on an incident report, Howard says. Failing that, in
a mall or other facility that has a security force, you may ask security to
file a report. In a lot without any security, you may want to ask a shop owner.
"You want to get something in writing," Howard says,
because "insurance companies are obliged to believe the story given to
them by their own policyholder" unless there's proof to the contrary.
Finding of fault is very important. Besides the rental car
and diminished value issues, the negligent party's carrier might owe you for
any time off work, Howard says. In addition, your company cannot raise your
rates if you are not at fault.
Also, the majority of states have adopted "comparative negligence,"
Eager says. This is a concept based on the idea that no one party is necessarily
completely at fault, but that fault is just a matter of degree. Your settlement
can be reduced based on the degree of fault.
Step 4: Contact your insurance
company as soon as possible. With a cell phone, you may call your company right
from the scene. Many have 24-hour claim-filing service by phone. Your insurance
ID card should provide the number. Whoever takes your claim will walk you through
Although the other party may be at fault, both Eager and
Howard agree that generally you should file the claim with your own insurance
carrier. Each carrier is obliged to protect the interests of its own insured,
making your claim a secondary concern for the other party's carrier. Chances
are you'll get the service you need more readily from your own carrier.
"You have rights with your own carrier that you don't
have with the other party's insurance," Howard says. This includes the
right to a process for resolving disputes over what expenses should be covered
by the insurance.
With no-fault insurance, you have no choice
initially but to file with your own carrier. No-fault insurance has thresholds
below which your own carrier pays all expenses, except the deductible. Above
those thresholds, you may seek restitution from the other party. These thresholds
vary by state.
Assuming the other party is at fault and
you do not have collision coverage on your vehicle, you will have no choice
but to file a claim against the other party's carrier. On the other hand, if
the other party does not have insurance, you will have to negotiate with the
other party directly or go to court.
Step 5 (if the other party is at fault):
You should advise the other party's insurance company that you're pursuing
a claim through your carrier and will seek reimbursement for costs your carrier
will not pay, including your collision insurance deductible, time off work,
auto rental differential and the amount of your diminished resale value, Howard
If you have the patience to take an unconventional route that
will be challenged by your carrier, Howard believes that if the other party
is at fault, you should file claims with both carriers.
"You cannot collect twice for the same thing," he says.
However under "multiple source recovery," he adds, "you can collect
from two sources and put the checks in a kitty and decide how much was paid
This means meticulously itemizing every expense involved, and
which carrier's check paid for which expense. At the end of the process, you
would submit the itemized list to your carrier and, if there's anything left
in the kitty, you would write a check for the overage to your own carrier.
Step 6 (this may happen earlier or later
in the process, depending on the other insurance carrier): You'll get
a phone call from the other company asking for your version of events that led
to the accident. You need to prepare for this, Eager says.
"Especially with an injury claim, you'd want to check with
your insurance carrier to see what statements you need to make to the other
It's a good idea to write down exactly what you will tell the
other carrier beforehand so that in the worst-case scenario -- a lawsuit --
your statement will remain consistent. Don't trust your memory. The other carrier
will be taping your statement and will have your exact words at their disposal.
Step 7: The adjuster comes out
to take a look at the damage to your vehicle and comes up with an estimate of
what it will take to restore it (or replace it, if it's totaled).
Then, the insurance company will cut a check in the amount of the repair,
minus any collision deductible amount.
If an insurance company has a direct repair program, the adjuster
might not even have to come out, Eager says. Under such a program, your insurance
carrier will refer you to a shop with which they have an agreement. So, depending
on the insurance company, the damage claim estimate may be done by the shop
itself, the shop won't have to wait to start repairs and the check can be transmitted
right to the shop, Eager says. The shop may also make arrangements for a rental
vehicle if you need one.
If the adjuster says the car is totaled (in other words,
beyond repair), the adjuster will estimate your compensation on the actual cash
value (or depreciated value) of the vehicle before the accident, essentially
enabling you to buy a similar used car. However, if you've bought coverage for
replacement cost value, the estimate will cover the cost of buying a similar
Step 8 (When disputes arise): If
you think your carrier's damage settlement offer is too low, you may ask your
carrier for a form of arbitration to resolve the dispute. This process may take
two to six weeks, but generally speaking, you will not have to wait for payment.
In most cases, the insurance company will pay you the amount it offered immediately,
and you'll get the rest when and if the dispute is resolved in your favor.
On the other hand, if you disagree with an offer from the other
party's carrier, you may or may not be offered such dispute resolution. If not
and the amount in dispute is significant, it may be worthwhile to take legal
-- Posted: Sept. 23, 2003