If your car is damaged in an auto accident, you will probably want to get it fixed as soon as possible. However, you may have many questions related to specific parts of the repair and recovery process, or do not know exactly how to begin. Here’s a guide for helping you get your claim handled without being taken advantage of. Remember, this is only a guide for working through the claim process.
What Insurance Coverage is Available?
The first step is to notify your insurance company of the accident. Your insurance company can also tell you whether or not you have purchased collision insurance to repair your vehicle when the at fault party does not have enough insurance and the amount of your deductible.
Most insurance companies have an online claim reporting system, but if you feel more comfortable, you can file a claim by calling the insurance company instead. If possible, have a complete copy of your policy handy so that if you have any questions about who is responsible for payment and want to better understand exactly how insurance works, you can discuss all this with either your agent or the claims representative.
The next step is to find out whether the at fault party has property damage liability coverage. Your insurance company can often help you with this process. If so, the at fault party’s insurance company is responsible for repairing your vehicle up to the amount of insurance coverage available. You can coordinate directly with the at fault party’s insurance company to get your vehicle repaired. Sometimes, the at fault party does not have enough insurance coverage, or the at fault party’s insurance company is taking too much time to resolve your claim. If any of these things happen and you have purchased collision insurance, you can ask your insurance company to repair your vehicle. Of course, if you choose to use your own insurance company to repair your vehicle you will have to pay whatever deductible you purchased under your insurance policy.
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How Does the Inspection and Damage Estimate Work?
Once you make the report, your claim will be assigned to an insurance adjuster who will schedule a time to inspect the car. If your car is drivable, you may be asked to take it to a repair shop that is listed as one that is approved by the insurance company. Although the insurer might recommend that you bring the car to one of the mechanics of its choice, you always have the right to use your own repair shop and may prefer to do that.
If your car is not drivable, the insurer may have an inspector go to wherever the car is located, or make arrangements to have the car towed to either the nearest approved repair shop or the shop of your choice. Be sure to understand what those options are with regard to your insurance company or specific policy. You will want to consider the mechanic options at the time of the accident so that if possible, you can have a say in where the car is towed to. Some interim locations and salvage yards charge a daily storage fee for the towed cars they receive. If so, you will want to make sure the insurance company is paying the storage fee and you will want to have your car moved as quickly as possible to the appropriate body shop.
After inspection and an evaluation of the loss, the insurance company will provide an estimate of the damage and an explanation of who will be responsible for making up the total cost of the repairs. If initially the insurance company and the auto repair shop disagree on the damage estimate, the two parties will discuss, negotiate and then generally come to a fair estimation. If the insurance company and repair shop can’t agree on the damage to the vehicle, or if you dispute the insurance company’s final numbers, you might need additional help and consider resorting to mediation, arbitration, or small claims court.
What Does the Term the Car has “Been Totaled” Mean?
It is important to know that based on their damage estimate, the insurance company has the option whether to repair your car or to reimburse you for your car’s “fair market value.” The “fair market value” of your car is determined by the current price for a car similar to yours. The insurance company will compare the “fair market value” to the estimated cost of repairing your car plus interim rental charges and salvage value. A car that costs more to repair than it was worth before the accident is called a “total loss.” If this is the case, the insurance company will use “fair market value” as part of determining your reimbursement for determining the “total loss.”
The insurance company will present to you what it believes is the “fair market value” of your vehicle. You have the right to challenge this determination. If you believe the “fair market value” of your vehicle is higher you can present proof to them. Proof you can assemble includes what similar vehicles are selling for on car sale websites such as Auto Trader and car value websites such as Kelly Blue Book.
If you have a loan on your vehicle and owe more than the “fair market value,” you are considered to be “upside down” on the loan. The insurance company will not pay more to you because you are “upside down” with your car loan. The value of the claim has nothing to do with how much you owe or how much you originally paid for the car. They are only obligated to pay the “fair market value” of your car which is the value of the vehicle at the time of the accident. Also remember to consider that the responsible insurance company will only pay for your vehicle damage up to its policy limits. That is why it is important to locate and read a copy of your policy. If you have any questions regarding your policy limits, clarify with your agent or claims representative.
If your car is declared a total loss, you can accept the total loss value of your car minus the salvage value and keep your car. Or, you can accept the total loss value of your car plus the salvage value and sign the required paperwork so that the insurance company can dispose of your car.
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Do I Have to Fix My Car?
If you own the car and do not have any loans or liens on it, you do not have to make the repairs as long as the car is still drivable, the car can pass inspection, and the cosmetic condition isn’t something that is an issue for you. You can decide to take the money and not have the repair done, but keep in mind that the insurance company may exclude future repair if an accident were to occur and damage the same area of the car.
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Do I have to Pay for a Rental Car While my Car is being Repaired?
If another party was responsible for causing the accident and you are using that party’s insurance to pay for your vehicle, that insurance company is responsible for paying for a rental car during the time your car is repaired. However, if you were at fault for the accident and you are using your own insurance company to repair your car, you may or may not be entitled to a rental car. The answer will depend on whether you purchased rental car insurance.
How Will I Be Compensated for Damages?
Once the vehicle has been repaired, the way in which the payment is made depends on the insurance company’s policies. Generally, the insurance company sends a check directly to the auto repair shop or directly to you if the car has been declared a total loss and there are no lien holders. In the case of repairs, you may be able to pay for the repairs yourself and seek reimbursement from the insurance company, but be sure that the insurance company and repair shop have agreed on the cost. Remember, depending upon your policy, you may have additional out-of-pocket costs such as a deductible or rental car fees that are incurred during the time your car is being repaired. Rental fees may or may not be covered in full based upon your own policy or the situation of the accident and the policies involved.
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