What is an Insurance Claim?
An insurance claim is a kind of request that you make to your policy provider for compensation for your financial loss or it can be for illness, damage to property, etc. When it comes to the car insurance claim, you request your insurance company to compensate for the loss in case of an accident, car damage or in the worst case, when the car got stolen.
The insurance company investigates the claim in detail and follows the process that we’re going to mention shortly in this article, and once they approve your claim, then you get paid. Claiming car insurance, in case of incidents, is your right because you have been paying annual premiums to your insurance company.
Getting car insurance is a separate thing and claiming car insurance is another thing. We know you want to get the answer to these questions ASAP: “How To Claim Car Insurance?” and “What is The Process?”
We’re going to answer all of your questions in this article. Before we dive into the details, you should know the types of car insurance claims.
Types of Car Insurance Claims
1. Third Party Car Insurance Claim
This is the simple and minimum cover required for auto insurance. It’s also known as “Liability Coverage”. In this type of claim, there are three parties involved. First-party (who purchased the insurance policy), the second part(insurer/insurance company) and the third party who caused the accident or got involved in the accident. The third-party car insurance claim is the best choice for the protection against the claims of the third party.
In short, when you file an insurance claim against another person’s policy, it becomes a third-party insurance claim.
There are 2 main types of Third-party insurance claims.
- Bodily Injury Liability (BIL):
BIL covers legal costs, funeral expenses, and medical bills.
- Property Damage Liability (PDL):
PDL covers repairing the damages of another person’s car or even replacing their car.
2. Not At Fault Accident
You fall into the “Not at Fault Accident” state when the accident was not your fault, rather the accident was caused by someone else’s negligence. In this case, you file a claim to your insurance provider company and your company pays for the damages. In this case, your company first communicates with the other person’s insurance company to see if they accept their responsibility.
After this process, you get paid for the damages. However, this type of insurance claim is subject to a limited amount.
3. Total Loss Claim
If the accident was so severe that the repair cost exceeds the value of your car, then you move to “Total Loss Insurance Claim”. This claim is also applicable if your car was stolen and not recovered. In this case, your insurance company gets your details and the value of your car, and after following their internal process they issue your payment.
When to Claim Car Insurance?
Each time, you claim your car insurance the rate of your premiums that you pay to your company, goes high. Or even you will be penalized for 3 years if it’s proved that the accident was your fault and you fall in the “At-fault accident” state. So, you should not file an insurance claim in every accident.
The general rule is if the rate of premium (that would rise after your claim) is higher than the cost of damage, don’t file the insurance claim.
Here are a few points, when you should avoid filing an insurance claim. When:
- Only your car is damaged.
- Other’s property damage is minimal.
- There is a chance of a rise in the premium rates.
And here are a few points when you should file an insurance claim.
- When you fall in the “Total Loss” state.
- When you fall in the “Not at-fault Accident” state.
How Does Car Insurance Claim Work?
When you file a car insurance claim, your case is assigned to an insurance agent/adjuster who will set up the meetings with you to get all the details about the incident. Make sure you give him all the details even the smallest one and don’t hide anything from him. Because it can get your insurance claim denied.
These 3 steps explain how the car insurance claim process works.
1. Prepare to File a Claim
After the accident, the very first thing you need to do is “Stop Right There!” otherwise you’re also breaking the law. Stop the car, and get the details of the other person involved in the accident. These details include:
- Car Registration Number.
- Full Name, complete address and phone number of the other driver.
- Other driver’s insurance details.
You need to collect these details because the insurance agent/adjuster is going to ask for this information. You’re legally obliged to leave your contact details with the other driver. You’re also legally obliged to call the police immediately because the insurance company may ask for a police report.
Don’t forget to take pictures of all the cars involved in the accident.
2. Contact Your Insurance Company
Once you have collected the information, call your insurance company and tell them about the accident so that the claim process can be started. The insurance adjuster can also ask for the time of accident and weather conditions at that time.
3. Wait For The Settlement
After following internal processes(like calculating damage cost, appropriate compensation, etc.), your insurance company will send the payment.
You might be wondering about the average car accident settlement time, it varies from state to state. For example, in California, the insurance department requires insurance companies to give feedback to the policyholder within 40 days after a claim is filed and the proof is provided.
Above mentioned steps are for the insurance claim process for car accidents. Now let’s check the stolen car insurance claim process.
But before we dive into the claiming process for the stolen car, first you need to know the following things.
Does Car Insurance Cover Theft?
Yes, but only if you have already purchased comprehensive coverage as part of your car insurance policy. This type of coverage also handles the replacement of car parts if they are stolen.
Comprehensive coverage helps you when:
- Your car is stolen.
- Certain parts of your car are stolen.
- Your car is damaged as a result of a break-in.
But this policy doesn’t cover the items or your personal properties stolen from the car.
Insurance Claim process for a Stolen Car
Here is what to do if your car is stolen.
1. Make Sure Your Car is really Gone
Before calling the police and your insurance company, make sure your car is really stolen. Check around and there are chances you have misplaced your car or maybe there is a “no parking” sign and your car is towed. When you’re completely sure that your car is stolen, then move to the next step.
2. Call The Police
When you are 100% sure your car is stolen, then call the police immediately and file an FIR. Give them all the required information like license plate number, VIN, year, make, model, etc. Then the police will add your car details in the national database so that it can be recovered as soon as possible and it will make harder for thieves to sell your car. GPS trackers can also help the police to find your car.
3. Call Insurance Company
After filing an FIR, now call your insurance company. You need to inform your insurance company immediately because if you take more time, it may look suspicious. The information that an insurance company requires for stolen car claim is.
- Police report number.
- Information about the people who had access to your car.
- Car condition when it was stolen.
- Location of the vehicle.
Remember, you’re the prime suspect when your car is stolen.
Each insurance company works according to its own work process. After you file a claim, your insurance company can put you in a waiting period (it can be from 4 to 8 weeks) to see if the stolen car can be recovered.
4. Wait For The Claim Settlement
Once your insurance company is sure that the car was really gone and the waiting period is over, then the insurance company will pay you the “Fair Market Value” of your car.
Car Insurance Claim Tips
Here are some handful of tips that can help you while filing a car insurance claim.
- Call the police immediately and file an FIR.
- Call your insurance company as soon as an incident(accident, car stolen, or injuries) takes place.
- If you have an accident, make sure to take pictures of the spot and gather all the information about the other person that is involved in the accident. This information includes Name, address, phone number, insurance policy details, and license plate number, etc.
- Be honest with your insurer and tell them all the minor details as well. Don’t try to hide anything otherwise, your claim may get invalid.
- Before spending any money, talk to your insurer first.
- Don’t try to settle the matter on your own.
- Make sure you submit incident details to your insurance within the time limit (this limit varies from insurer to insurer).
- Don’t accept losses estimate in rush offered by your insurer. First, find the market value of your car and compare it with the insurer’s estimate, and then take the decision.
Life is uncertain and anything can happen at random times like accidents, injuries or even the car is stolen. When such an incident happens, before you try to claim your car insurance policy, make sure you have knowledge about the prerequisites that we mentioned above in this Car Insurance Claim – Comprehensive Guide.
If you have any questions or tips, do share it with us in the comments section below.
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