Thankfully, the vast majority of drivers will never suffer an accident severe enough to file a claim for reimbursement from their auto insurance company. But when a car accident does occur, and the damage is moderate to severe or expensive, a policyholder should take the right steps to file a claim.
At the scene of the accident, file a police report and collect witness statements. This will provide an official, legal record of events, which is important for the insurance company calculating the claim, and if the driver at fault is sued at a later date. And, of course, seek medical attention if necessary. Next, drivers should exchange personal and auto insurance information. Remember that it's important to carry an auto insurance company policy card in the vehicle for just this purpose. The driver should then contact his insurance company as soon as possible, even right from the scene. The company will walk the frazzled driver through the process and collect the necessary information -- policy number, accident details, other driver details, and so on. The driver should do this even if he's not at fault in the accident, but one should always let the other driver know, if applicable, that a claim is being pursued.
Traditionally, the next step is that an adjuster from the insurance company will meet with the driver to assess damage to the vehicle (and perhaps the driver) and estimate how much it will cost to repair the vehicle or replace it, if it was totaled. (Companies pay out "actual cash value," or ACV, which is what the car would have sold for at auction, pre-accident. This usually happens if the repairs total 80 percent or more of the car's ACV.) The adjuster will then decide on the amount due and report that to the auto insurance company, which then cuts a check, minus the policy's collision deductible.
However, the driver may never see an adjuster. Some insurance companies employ a network of affiliate mechanics and auto repair shops. All have agreed to standard costs of repair. This means that instead of an adjuster, the auto insurance company will recommend a shop. The driver then goes to that shop, which will send a repair/replace estimate to the driver's insurance company, which then goes through the process of cutting a check minus the deductible.
Two notes: Drivers may use any auto body shop they wish, by law, not just the ones recommended and affiliated with their auto insurance company. Secondly, it's illegal in some places for insurance companies to cancel a policy after an accident, but the driver should be prepared for coverage rates to rise. The driver's risk and financial burden just went up -- and auto insurance is a business, after all.
For lots more information on the insurance industry, see the links below.
- Anderson, Sil. "Auto Insurance Online: How It Affects You and Your Vehicle." AmpInsure.org. Dec. 21, 2009. (March 12, 2012) http://www.ampminsure.org/auto-insurance.html
- Caputo, Sal. "8 Steps to making an auto insurance claim." Bankrate.com. Sept. 23, 2003. (March 12, 2012) http://www.bankrate.com/brm/news/insurance/steps-file-auto1.asp - Caputo
- CarsDirect.com. "How Do Auto Insurance Companies Make Money?" August 12, 2009. (March 12, 2012) http://www.carsdirect.com/car-insurance/how-do-auto-insurance-companies-make-money#b
- Farmers Insurance Group. "Your Automotive Insurance Questions Answered." (March 13, 2012) http://www.farmers.com/auto_insurance_faq.html
- Hawkins, Kathryn. "Denied! 6 foolish moves that destroy a car insurance claim." Insurance.com. May 5, 2011. (March 13, 2012) http://www.insurance.com/auto-insurance/claims/destroy-car-insurance-claim.html
- Maine Bureau of Insurance. "Automobile Insurance: Making the Claims Process Easier." February 2009. (March 13, 2012) http://www.maine.gov/pfr/insurance/consumer/auto_claim_brochure.htm
- Megna, Michelle. "Report: 10 tips for getting a fair car insurance settlement." Insurance.com. Jan. 23, 2012. (March 12, 2012) http://www.insurance.com/auto-insurance/claims/tips-for-fair-car-insurance-settlement-.html
- New Jersey Department of Banking and Insurance. "What You Should Know About Filing an Auto Damage Claim with Your Own Insurer." 2008. (March 13, 2012) http://www.state.nj.us/dobi/ins_ombudsman/wysk1.htm
- United Services Automobile Association. "Explaining Car Insurance to Your New Driver." Nov. 21, 2011 (March 11, 2012) https://www.usaa.com/inet/pages/advice_teen_insurance