How (and When) to File an Insurance Claim

by Jim Thompson | Last Updated: February 1, 2021

Car insurance is a curious expense. What other item is purchased with the hope of never using it? Then, in the unfortunate event that it has to be used, the buyer has no idea how to use it to their full advantage.

As with anything involving money, people, and bureaucracy, filing a car insurance claim isn’t a simple process; it’s going to take some work. Unfortunately, most people don’t take the time to learn the details of how their insurance works until it’s time to use it. The stressful time following a car accident is no time to learn the complicated procedures required to take full advantage of a policy.

You don’t pay premiums to provide yourself with a little card that makes getting your car inspected possible and traffic stops less awkward. You pay them so that you can be made whole after a loss. Taking the time to familiarize yourself with how your policy works will save you much time and frustration if the time comes that you have to use it.

First, Your Policy or Theirs?

In almost every accident, a mistake made by one driver or the other is clearly the cause. Looking at the problem logically, the insurance company of the driver who caused the accident should be the one who pays, but that’s not always the case.

If the fault was yours, contact your insurance company immediately. If you have chosen a reputable carrier, they should be able to get you through the process quite easily and (hopefully) get the other driver restored as soon as possible.

If the damage to the other car was minimal, you might offer to pay for the repair out of pocket. Depending on your deductible, you may be in effect doing this anyway. Writing a check for the damage without involving your insurance company may represent cash savings in the long run as a claim can cause your premiums to be increased, generally up to three years.

But what if you weren’t at fault?

There are three scenarios where you might wind up filing a claim on your own insurance, even if you were not the cause of the accident.

If you sustain an injury in a “no-fault” state

18 states require drivers to carry no-fault insurance. This coverage is sometimes known as personal injury protection (PIP).

PIP offers great protection if you are injured in an accident. Since it is paid for by your own company, there’s no waiting to get the help you need. After all, getting your body fixed is more important than getting your car’s. Once you are put right, your insurance company will likely go after the other driver’s policy for reimbursement.

If the “other guy” is underinsured

It could be that the maximum limits or the liability coverage of the driver that hit your car won’t be enough to cover the damage done to it. You may need to file on your own comprehensive policy to make up the difference in this situation.

If the other company is slow or uncooperative

If you are like most people, your car is your only means of transportation, and being without it represents a hardship. If you need to get back on the road in a hurry, you may not have time to wait for the other insurance company to investigate the accident or otherwise delay payout.

If the other guy’s coverage doesn’t offer rental car coverage, perhaps yours does. In any event, your company will probably get the repairs done more quickly.

By the way, don’t fret over your company losing money on this transaction. They will go after the other company for reimbursement.

If the totaling of your vehicle leaves you “upside-down”

If your car is totaled in the accident, the other company’s payout will be based on your car’s current value. This presents a problem if you still owe more money for your car than it is currently worth. That means that even though you weren’t at fault, you will be left with no car and the prospect of shopping for a new one still owing money for the old one.

In this situation, a gap policy will make up the difference between your settlement and what you owe on the car. Your insurance company does not always provide this coverage. Many lenders will require it as a condition of your loan, and they may be the ones carrying it.

If you aren’t currently carrying gap insurance and are financing a balance larger than your car’s value, you may want to look into it.

Filing a Claim

Whether filing a claim with the other driver’s insurance company or your own, the information you will need to provide is largely the same. Either company will ask you for the following information at a minimum.

Submitting this information may require a phone call to the insurance company but, more than likely, it will be handled electronically.  These days, most claims are initiated online or, in some cases, through an app. Many of these apps allow you to begin the process at the scene and provide the functionality to upload photographs and other documentation.

You’ll want to initiate the process as soon as possible, even though in the first few hours after an accident, it will be one of the last things you’ll want to be doing.

What’s Next?

Once the claim has been submitted, the insurance company will begin its investigation. This step of the process will likely be the most time-consuming. At the risk of sounding cynical, paying claims may not be the number one priority of many insurance companies.

Once it has been determined that the claim is legitimate, the insurance company will give instructions on how they will assess their damage estimate. Sometimes this will require you to take your car to an approved repair facility, or they may send a representative to you. After examining the information and your costs, the company will provide payment to help you cover the expenses incurred, at least to the level of their liability.

Submitting a claim to your insurance company doesn’t have to be overly complicated, especially if you gather all the necessary information at the scene of the accident. While filing at the insurer’s office isn’t complicated, it is much more convenient to file from your home computer or smartphone. You’ll cut down on your time investment, and you can move on to doing something else that isn’t accident-related, probably the last thing you want to think about right now.