Car Insurance Claims – How Do Insurance Companies Pay?

Getting into an accident means you’ll have to go through the process of claiming your car insurance money. For car insurance claims, your car insurance company will guide you, it’s still your role to know how it works. There are also specific questions you need to get answered regarding your policy.

This is so that you’ll be more aware of the coverage of the policy and maximize its benefits. By doing so, you can finally drive at ease, knowing you’re protected by your insurance policy.

In this article, we will highlight the car insurance claims, processes of filing and claiming your money. Aside from that, we will also briefly discuss the importance of getting car insurance.

Is Car Insurance A Necessity?

If you get a car, you need to accept that accidents can happen. Even though you’re careful with your driving, you can’t prevent reckless drivers from causing an accident. And when you get into an accident, there will be bills to pay.

Sure, you can apply for accident settlement loans after an accident. But the rates for repaying the loan will shock you.

Accident settlement loans are cash given to you by a lawsuit loan company after an accident. You usually get them in advance, just as the court is still settling your injury case. They are helpful in cases where you need to pay bills immediately.

Some companies don’t require their customers to repay the loan. But for those who do, their rates can be extremely expensive. It’s worth considering since personal injury cases usually take longer to settle.

So, the best thing to act is to prepare for such accidents. Car insurance helps save you from spending massive amounts on car accidents. They can cover car damages or personal injuries, depending on which car insurance claims you’re filing for.

Not only that, but it’s a requirement in most states. If you don’t have one, there will be charges against you, and you’ll be responsible for any accident expenses.

How Do Car Insurance Claims Work?

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There are distinct steps that you need to go through when filing car insurance claims. This varies depending on the insurance company. But, generally speaking, the process of filing car insurance claims are similar across all insurance companies.

Knowing these procedures beforehand will make the claiming process easier should the time come. Here is what generally happens when you file car insurance claims.

1. You File A Claim

If you are involved in a car accident, you need to call your insurance provider immediately. After that, car insurance claims agent will get in touch with you to gather information regarding the accident. They are the ones responsible for filing your claim.

Since you got into an accident, you’re required to submit documents related to the mishap. So, while you’re still in the scene, you have to collect information about:

  • The names of everyone involved in the accident. This also includes their contact number, insurance, and any information about their car.
  • The location where the accident happened, the time it happened, and the weather condition
  • The damages to the affected cars. You would want to take a picture of these.
  • The names of the police officers who responded along with their badge numbers.
  • The incident report.

2. The Company Reviews Your Car Insurance Claims

The next move will be for the insurance company to evaluate the documents you supplied. They will double-check if the policy is still active. Also, they have to know whether your claim is covered in your policy.

After this, an insurance adjuster will see your car and inspect any damages.  It’s their way of determining who caused the accident. This will help them get an estimate of how much you’ll be spending on repairs.

In some cases, you will be the one to get an estimate from a repair shop. Typically, this is the shop where you get your car fixed. The shop will send a report to the insurance company and will consider these estimates. This will help them calculate how much insurance money they will give you.

Additional information and documents will be required when they’re finalizing their decision. They will then notify you of whether your claim is approved or denied.

3. The Company Pays You or the Car Repair Shop

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Once that your claim is approved, you can now reimburse the cost of damages. The insurance company can send you the cash, or they can send it to the repair shop directly. Don’t worry because this will be stated in your insurance policy.

If you have comprehensive collision coverage, you will get the actual cash value of your car. This cash value refers to the depreciated value of your car. You’ll be able to use this cash to purchase a new car. If the car’s value exceeds the amount of cash you have, you can get help from gap insurance.

Also Read: 7 Things That Can Impact Your Car Injury Claims

Ask About Your Car Insurance Policy

While you’re claiming your car insurance, there are things that you should know about. You can ask your car insurance company to understand more about your policy and what they cover.

We listed below three crucial questions that you should find answers to.

How much is the deduction?

Certain car insurance policies have fixed deductibles on different coverages. This means that you have to pay a certain amount for your car repair before your insurance gets activated.

For instance, the repair shop estimated a total of $2,000 for the damages to your car. This is the amount you’ll get from the insurance company for car repair. Let’s say your car insurance policy stated that you pay $500 for collision coverage. From the $2,000 insurance payment that you receive, a $500 deductible will be subtracted from this.

So, in total, you’ll receive $1,500 worth of car repairs from the company. And the remaining $500 will come from your pocket.

That’s why some people also apply for accident settlement loans beforehand. Because, to some, $500 can be a bit expensive.

How will I be compensated?

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When you apply for car insurance, there is an option to include rental car coverage. This is what other companies refer to as rental reimbursement coverage.

If you have this in your policy, the insurance company will pay for your transportation. This means that as long as your car is still in repair, you can rent a car, and the company will pay for that. Car rentals aren’t the only transportation means that gets paid. You can have bus or cab rides, and the company will still consider them.

But there are limitations to this coverage.

  • It only works for covered losses. That can differ depending on what type of insurance policy you have. For example, if you get in a car accident with collision coverage, then this is considered coverage loss.
  • It’s only available for a limited amount of time. As an example, your coverage includes that you can only use up to $50 per day for a month. This means that you can’t exceed the $50 transportation cost limit within the day. And you’ll only be able to get $50 a day for a maximum of 30 days.

Is there a deadline as to when I can file for car insurance claims?

In some cases, you can’t submit the requirements to the insurance company right away. That’s why it’s good to know the deadlines for submitting a claim. If you missed the deadline, you wouldn’t be able to receive your insurance money.

The deadline for submitting may vary depending on the type of claim you’re making. This means that the deadline for car damage claims is different from personal injuries claims. In addition to that, it can also differ from other states.

But if you really can’t file it on time, you can opt for accident settlement loans. This can help you cover some hospital bills and car repair costs.

Also Read: Avoid These Five Mistakes When Buying Car Insurance.

Conclusion

Getting car insurance guarantees you have lesser expenses when you meet an accident. But, your role doesn’t stop at the application part. To get a hassle-free claiming process, you should know specific steps when claiming your insurance money. Aside from this, you should also ask about your insurance policy coverage.

All of these can help you understand and make the most out of your insurance policy more.

Must Read: Here Are 8 Car Insurance Add-On Covers That Are Hard To Pass Up

Images by Mikhail Nilov and Artem Podrez from Pexels

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