Surviving the Claims Process

It is Monday morning and you have just been involved in an accident.  In addition to coffee spilled on your shirt and the fact you will be late for work, you now have to file an auto Insurance claim.  The most important thing is that you are ok but you will have to deal with many challenges over the next few week.  Some include getting repairs done to your car, arranging for alternative transportation, working with your claims adjuster, and a host of other tasks.  Depending on how your current insurance policy is structured, this can a seamless process or a nightmare.

Filing a claim is when you find out how good of a policy your agent sold you and how dependable your insurance company is.  Everyone wants to save money wherever they can but when your car is totaled and people are being driven to the hospital by an ambulance, it is a terrible feeling when you find out you have State Minimum Bodily Injury Liability Limits and no Comprehensive or Collision (but your agent saved you $300!).  This is NOT the time to have a serious conversation about your coverage with your insurance agent.  Times like this is why you need to be properly insured so that you can focus primarily on recovering from the accident (injuries, and getting your car fixed) and not law suits from the other people involved because you were not sufficiently covered.

In addition to being adequately covered, it is important to know what to do DIRECTLY after the accident.  This is a critical time where you have to be on guard for your best interests.  This can be challenging considering the circumstances, yet by remaining calm and following the advice outlined here can save you money on your future Auto Insurance rates and protect your assets.

Proper Insurance Coverage Levels

Everywhere you look online and on all forms of media you see and hear insurance companies and agents telling you that they can save your more money, they have the lowest rates and $9 a month for Insurance ads galore.  Cost always matters but your Insurance premium should not be the only factor you should consider when purchasing Insurance.  If you own a home and have significant assets, the last thing you should be worried about is having cheap Insurance.  Your licensed agent should advise you to have Proper Bodily Injury Liability Limits.

The recommended Bodily Injury Liability Limits for homeowners is at least $100,000 per person, $300,000 per accident and $50,000 per accident for Property Damage.  Even if you do not own a home, this is a solid amount of liability coverage to have.  If you are found at fault for an accident, the other party involved in the accident can sue you for damages.  If they win the case, they can go after your home and other assets you have.

By law, your insurance company has to pay for your legal fees and will defend you in court free of charge regardless of if you win or lose.  Should you lose, having high liability limits means your insurance company will pay the damages.  Having State Minimum Limits on the other hand means that should you lose, your insurance company will pay up to your limits and then you will be responsible for the remaining balance and the other party AND their insurance company will come after you for that additional money owed.  As you can see, it is imperative to have good liability limits and unless it is financially impossible for you, I would advise anyone to have more that minimum coverage.

Uninsured/Underinsured Motorists Liability and Property Damage is another important option to have on your policy.  These coverages protect YOU if you are hit by a driver who has NO INSURANCE or NOT ENOUGH INSURANCE to pay for damages to YOUR CAR and YOUR medical bills sustained during an accident.  If you do not have Comprehensive and Collision on your policy due to you having an older vehicle or due to cost, it is vital that you have this on your policy.  Unfortunately, there are so many drivers who do not have insurance or have State Minimum Coverage.  Having this in place insures you and your family will not be in a financial bind after an encounter with an irresponsible motorist.

Optional Coverages such as Rental Reimbursement also come in handy during times like this.  If your agent did not offer you this coverage, they did you no favors at all.  Sure you saved approximately $15-30 on your policy but weekly retail car rental rates can average $200 A WEEK so if you can afford it, make sure you have this on your policy.

Second, you must make sure your rental reimbursement coverage will keep you in the type of car you normally drive.  For example, $20 a day typically pays for a compact or sub compact car.  If you drive a minivan and have to transport children to and from school, this obviously will not suffice.  When you are going through the claims process, your optional coverages can either be your saving grace or create more out-of –pocket expenses at a very inconvenient time.

Other coverages such as Accident Forgiveness take the bite out of the experience of having an accident.  Accident Forgiveness helps keep your rates low with your CURRENT insurance company in the event of an at-fault accident.  Keep in mind, if you leave that company for another one, the new company will take that accident into consideration when offering you a quote.

What to Do Right After an Accident

J.D. Power and Associates gives the following advice to motorists who are involved in an accident:

  • In the event of a multiple-vehicle accident, always get a copy of the police report. Call 911 only if someone has been seriously injured, but do call the police for any incident that results in more than minor damage to a vehicle. Ask the police to file an accident report or at least an incident report, so you’ll have something to show your insurance company.
  • Contact your insurer as soon as possible after the damage has been incurred. Some insurers have operators available around the clock, so, if possible, call from the location where the damage occurred. In any event, report the incident within 24 hours of occurring. Even when the other party is at fault, notify your insurer first, who will be more likely to look after your interests than the other party’s insurer will.
  • Write down the details of the incident as accurately as you can as soon as possible. The more accurate your report of what happened, and the more consistent you are in repeating it, the better. Keep records of all calls you make and receive regarding the incident. Take photos of the damage to your vehicle.
  • If you believe your adjuster is not treating you fairly, or if you have other problems, contact your agent directly, as it will be in the agent’s best interest to make sure that you’re well taken care of.

By adhering to these tips, you can help make your experience less stressful and these actions go a long way in helping limit your liability.

Surviving the Claims Process

Car accidents is not a matter of if they will happen, it is a matter of when they will happen.  Again, the important thing is that you are ok physically and emotionally as this can be a traumatic experience.  As insurance professionals it is our job to give Insured consumers the best advice possible when offering insurance to the general public and especially when reviewing current clients’ insurance plans.  At the same time, you as a consumer need to be knowledgeable about the insurance plans you need to protect yourself and your family and put it in place.

  1. J.D. Power and Associates Reports: Auto Insurance Claims Approval Decrease as Out-of-Pocket Expenses Increase Wireless News (Apr 26, 2013).