A vehicle sped through an intersection, ran a red light and hit my wife’s car. Both air bags deployed and the car was declared a total loss. Luckily, my wife wasn’t hurt physically, other than a bruise from the seat belt and airbag restraints that protected her from serious bodily injury.
A few days later my mother’s car was sideswiped by another driver while driving on a busy street. Then, a few days after that, my niece was involved in an eight-car pileup that sent her to the hospital and totaled her car. Again, no serious injuries in either case.
That’s the “good news” with most auto accident claims; Personal injury isn’t the problem.
“Sixty-three cents of every claim dollar [pays for] physical damage on your car,” says John Eager, senior director of claims services for the National Association of Independent Insurers (NAII).
Filing auto insurance claims requires basic steps whether personal injury is involved or not. However, a personal injury claim may require a different level of proof and persistence than a vehicle damage claim.
Also, insurance regulations vary from state to state, but the basic steps to take information needed to file a claim are fairly similar.
The claims process for vehicle damage is simple in principle: (1) You make a claim; (2) The adjuster estimates the cost to repair the damage; and (3) The insurance company sends a check for that amount to you or the body shop to pay for the repairs.
Negotiating the maze of requirements from insurers makes the claims process anything but simple to those not familiar with the simple steps necessary to complete a successful claim.
“Proof of damage or injury” is required by every insurance claim before an insurer will pay.
For auto claims, Eager says there are five elements of proof that will come into play: (1) What you tell the insurance companies; (2) What the other party tells them; (3) A police report; (4) Witnesses; and (5) Physical damage at the scene.
Here are eight tips to keep with you and pass along to your family, customers and friends:
# 1) At the accident scene, Call 911. Get police and medical help if necessary. Most important: Remember that you’ll need a police report. Some police officers may try to avoid taking an accident report in parking lots or where the damage appears small. INSIST on an accident report.
# 2) Exchange information with the other parties involved: license plate numbers, contact information and auto insurance information. Most states require drivers to have an insurance identification card in the vehicle that will provide most of the necessary information. Make sure to get phone numbers, names, addresses, where they work, etc. Make notes on any pertinent information regarding accident.
# 3) Find witnesses willing to tell what they saw and get their statement and contact information. 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.
# 4) Notify your insurance company as soon as possible. Call your insurer from a cell phone right from the scene. Many insurers have 24-hour claim-filing service by phone. Regardless of who’s at fault you should file the claim with your own insurance carrier.
# 5) If the other party is at fault, 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.
# 6)You’ll get a phone call from the other company asking for your version of events that led to the accident. Be prepared for this.
# 7) The adjuster comes up with an estimate of what it will take to restore your damaged vehicle (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.
# 8) (For disputed cases) If you feel your insurer’s damage settlement offer is too low, ask for “arbitration” to settle the dispute. This process may take two to six weeks, but in most cases you won’t have to wait for payment. The insurance company should 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 insurer, 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 action.
My friend, J. D. Howard, a retired insurance adjuster who co-founded the Insurance Consumer Advocate Network (I-CAN), based in Branson West, Missouri, says, “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 change.”
The police officer may plead “no jurisdiction” if the accident happens in a parking lot. Insist on an incident report, Howard says. If the accident is in a mall or other facility that has a security force, ask security to file a report. In a lot without any security, ask a shop owner to make a statement.
“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 when it comes to auto insurance claims. There are rental car and diminished value issues, time off from work, and whether or not your insurance rates go up.
According to Eager and the National Association of Independent Insurers (NAII), the majority of states have adopted “comparative negligence,” a concept based on the idea that no one party is necessarily completely at fault, but that fault is just a matter of degree. The “degree of fault” may determine how much your settlement is “reduced.”
“You have rights with your own [insurer] 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.
Have the patience to take an unconventional route that will be challenged by the insurer, 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 for what.”
This means itemizing every expense involved, and which insurance check paid for which expense. At the end of the process, you submit the itemized list to your insurer. Then, if there’s anything left in the “kitty”, you write a check for the overage to your own insurer.
“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 insurance carrier.”
Make written notes about your accident. Don’t trust your memory. Write down exactly what you will tell the other insurer so that in case of a lawsuit your statement will remain consistent. The other insurer will be taping your statement and will have your exact words at their disposal.
Consumers don’t know that if an insurance company has a direct repair program (DRP), the adjuster might not even have to come out, Eager says. Under the DRP, their insurance company will refer them to a shop with which they have an agreement. So, depending on the DRP agreement, 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 body shop may also make their own arrangements for a rental vehicle if the customer needs one.
If the adjuster “Totals the car,” the adjuster will estimate compensation on the actual cash value (ACV or depreciated value) of the vehicle before the accident, essentially enabling purchase of a similar used car. However, if the auto insurance policy has “replacement cost value,” the estimate will cover the cost of buying a similar new vehicle.
Getting the claim settled more efficiently and with less frustration will be the likely result of following the above claims tips.