Auto Insurance Claim Settlement Tips
Claims with your own insurance company
When you have filed a claim with your own insurance company for physical damage to your vehicle from a car accident (Collision Claim), or from vandalism, or another type of event under the comprehensive section of your policy, (Comprehensive Claim) or for injuries sustained in a crash, (Med Pay Claim), as long as there are no problems with your coverage, your claim should be approved and paid. For collision or comprehensive damage, most insurers will pay the body or glass shop where you have your car repaired directly after they receive an estimate from the shop. Occasionally, although this doesn’t happen much any more, an adjuster will come to your home or work, write an estimate for the damage him or herself, and hand you a check right then and there to cover it.
If you have rental car coverage on your policy and your car must be in the shop for several days or weeks, the insurer will either arrange for a rental car for you with a company with whom they have a relationship, or tell you whom to call. There is usually a daily or weekly dollar limit and the insurer will pay the rental car company directly.
For a Medical Payments claim, some people also have health insurance that will cover their bills. Read your auto policy to determine which coverage is “primary”, i.e., pays first, and how your insurer handles it if you have double coverage. Although you are entitled to receive payment from your Med Pay coverage on your auto insurance policy, some insurance companies may choose to subrogate against (legally request reimbursement from) your health insurer if your health insurance is primary. Other companies will just pay you directly for your bills even if they were already covered by your health insurance and you can keep that money. Your policy will only cover you for reasonable and necessary treatment, and as long as the amount is within your policy limits.
Claims with the other driver’s insurance company
When you are in an accident with another driver and it is, at least partially their fault, and you are not in a no-fault state, you may make a claim with the other driver’s insurance company. For a Property Damage claim, similar to claims with your own insurer, they will typically pay the body shop directly for repairs once they receive an estimate from the shop. The other driver’s insurance will also pay for a rental car for you for a reasonable and necessary time that your car must be in for repairs.
If your car was totaled, (it would cost more to repair it than its value), they will pay you the Actual Cash Value (ACV) of the vehicle and take the salvage and sell it, keeping the profit. Alternatively, they may offer you the salvage (your damaged vehicle) and the ACV less the salvage value. An agreement on the ACV must be reached in order to settle this type of claim.
If you are injured and making a bodily injury claim with the other driver’s insurance company, there are no hard and fast rules regarding settlement. If you are offered a settlement amount that you believe is fair and you want to take it, you will be asked to sign a Release and Waiver, which waives your right to come back and sue for more money from them or their insured at a later time even if you learn new information about your injury. It is always good practice to have an attorney look at the documents before you sign them. Better still, if you have anything more serious than a minor injury, it is often beneficial to have an attorney represent you so you know you are being dealt with fairly.
If you are on your own and cannot reach a settlement, you may:
- Contact an attorney to negotiate for you unless time is of the essence (Check the Statute of Limitations in your state) in which case you may need that attorney to file suit to protect your rights.
- Contact an attorney to file suit against the responsible party (especially if time is of the essence).
- In some states you may file suit and/or file a complaint with the Department of Insurance for Third Party Bad Faith (At the time of this writing, those states are Alabama, Hawaii, Michigan, New Hampshire, Florida, Louisiana, Montana, Washington and Nebraska.) Check with an attorney in your state who specializes in bad faith cases; this is a shifting area of the law in many states.
Settling a claim of any kind is sometimes tricky. If you don’t understand what the insurance company is telling you, whether it is your insurer or the other driver’s, ask questions until the adjuster explains it clearly, or consult an attorney for assistance.
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