The point of having insurance coverage is knowing you’ve got financial protection if you’re involved in a car wreck or if your vehicle is otherwise damaged. After an incident, you call your provider and you’re told to file an insurance claim. If you’ve never filed one before, you’ve probably got one question: What is an insurance claim?

This article will break down how an insurance claim works and how it impacts your rates. We’ll also give our take on the best car insurance companies to work with in the event of a claim.

 

In this article:

 

What Is An Insurance Claim?

An insurance claim is a formal compensation request for damages covered by an active insurance policy. Different types of insurance ranging from life insurance to medical insurance, homeowners insurance, and auto insurance require policyholders to file claims if they want financial reimbursement. 

The type of claim you file will depend on who is at fault and the circumstances of the incident will dictate what policy covers your financial loss. If your new car is totaled in an accident, you’d likely see a payout from your collision coverage and gap coverage policies. If you were injured in an accident, the payout would come from your personal injury coverage.

One thing to remember is that filing an insurance claim will likely affect your car insurance rates when it comes time to renew – generally in the form of a higher premium.

 


 

What Is The Auto Insurance Claims Process?

Maybe you’ve been rear ended or a natural disaster damaged your car and you need to file a car insurance claim. There are a few steps you’ll go through before your insurance provider can get involved:

Call Law Enforcement If Needed

If you’ve been in a serious car accident, are the victim of vandalism, or had your vehicle stolen, the first thing you should do is secure your safety and call the police. Authorities will investigate and see if anything rises to the level of criminal charges, but they will also file a police report. 

A police report will contain a detailed narrative of the incident and help an insurance provider decide if you’re eligible for financial reimbursement. 

Collect As Much Information As Possible

Your insurer will want as much pertinent information as possible when deciding whether to cover your claim. That means you’ll need to provide any medical bills if you were injured in a collision, along with the contact and insurance information from the other drivers involved.

Here are some things you’ll want to show your insurer when you file a claim:

  • Names and contact information for all drivers involved in the collision
  • License plate numbers and vehicle information for all cars involved
  • Photos of the damage
  • Any information from eyewitnesses

Notify Your Insurance Provider

Once you’ve gotten all the necessary information, contact your insurance provider and a representative will advise you on next steps. Your insurance agent will likely want to know some of the details of the accident and may direct you to an online form or an app where you can begin filing an insurance claim.

Your insurance company may also provide you with transportation from the site of the wreck if your vehicle is badly damaged. Ask your provider for as much assistance as your policy offers in the event of a collision.

It’s always best to file an insurance claim immediately after an incident that qualifies for coverage occurs. Time limits for how long a customer has to file a claim differ depending on the company, but it could be days or years.

Work With The Claims Adjuster

After your claim has been filed, your insurance company will have you work with a claims adjuster. The adjuster’s role is to collect information, conduct interviews with witnesses and the policyholder, and meet with other third parties to determine how much financial burden your insurance company is responsible for.

An insurance adjuster will review cost estimates from an auto repair shop and any injury claims involved with the collision. While settling the claim, the adjuster will see if a car insurance deductible needs to be paid and present the policyholder with an estimate for replacement costs. That estimate will include what repairs are being done.

The repairs will only begin after the customer agrees and signs the adjuster’s appraisal. Once that happens, the insurer will pay out the claim. Any additional repairs the vehicle needs will have to be approved by the insurer as well – filing a claim authorizes the insurance provider to handle any logistics regarding your property.

It’s also possible that an insurance company can deny you coverage if it finds a claim happened outside of the stipulations of your policy. In that case, you’d be stuck with any repair costs and bills that exceed the limits of your liability coverage.

If you have issues with your claim or feel that you're being treated unfairly, feel free to ask for a claims specialist’s supervisor. If that doesn’t resolve the issue, you can contact your state insurance commissioner for information about filing a complaint or consider talking to a lawyer to see what legal options are available.

 


 

When Should I File A Car Insurance Claim?

If your vehicle was damaged or you suffered an injury in an accident, you’ll probably want to file a claim. What type of auto insurance covers you will depend on the nature of the accident who is at fault.

Total Loss

Your vehicle is considered a total loss if the cost of repairs is higher than its actual cash value (ACV). In that event, you’d file a collision insurance claim and receive a payment for the ACV, minus your deductible. 

You may also receive payments from a gap insurance policy if you have an outstanding balance on an auto loan. This would help bridge the difference if there’s a gap between your car’s ACV and the remaining amount owed to a lender. 

You could also file for a total loss under a comprehensive car insurance policy if something like a tree fell on your vehicle. Review your policy to see when comprehensive coverage offers financial protection.  

Fault Is Clear/Unclear

If someone other than you is clearly at fault in an accident, your damages should be covered by their liability insurance. If the accident is your fault, file a claim so the other party can receive financial assistance from your provider.

When fault isn’t obvious, each party should file a claim and the insurance providers will investigate to determine who is at fault.

Someone Is Injured

When injury is involved during an accident, you’ll want to file an insurance claim to avoid paying costly medical bills.

If you caused the injury to another driver, the claim would be filed with your liability auto insurance policy. If you suffered an injury and someone else is at fault, you’d receive payment from their liability policy.

Medical payments (MedPay) and personal injury protection (PIP) cover medical expenses for you and your passengers if they are also injured in a crash. In addition to medical bills, PIP handles things such as lost wages and death benefits, no matter who is at fault.

You Live In A No-Fault State

Twelve states are no-fault states, which means state law requires drivers to file injury claims with their own providers regardless of who is at fault.

No-Fault States
Florida Kentucky Minnesota North Dakota
Hawaii Massachusetts New Jersey Pennsylvania
Kansas Michigan New York Utah
 

The Driver Is Uninsured/Underinsured

If you’re in a collision with a driver who isn’t carrying insurance, or their policy falls short of the cost, an uninsured/underinsured policy would help you cover the damages.

 


 

When Should I Not File A Car Insurance Claim?

One way to assess whether it’s a good idea to file a claim is by considering the out-of-pocket expenses and if your car insurance even covers you in the situation.

You Caused Minimal Damage

Say you back into a telephone pole and cause $700 worth of damage to your car’s rear bumper. If you have collision insurance and a deductible of $500, your provider would only pay for $200 worth of property damage. You’d also have a prior claim on your insurance record that would cause your rates to go up.

In that case, it would be better for you to just pay out of pocket and avoid a rate hike. The same could be true if you caused minimal damage to someone else’s vehicle in a minor collision. If the damage is reasonable enough for you to afford, just ask if they’ll allow you to cover the repairs. You’ll still want to get the other driver’s license plate number and contact information, but it could help both drivers avoid filing a claim and paying higher rates.

Keep in mind there is a risk when it comes to not reporting an accident, especially if you’re sued for damages from a collision by another driver. Failing to inform your provider of the incident will make it difficult for the insurer to represent you in court.

Your Insurance Doesn’t Cover You

If you only have liability coverage and get in an accident that only involves your car, you’ll be stuck paying for the damages since you don’t have collision insurance. It’s usually recommended that drivers drop collision insurance if the vehicle is valued at less than $4,000, is no longer financed, or has high mileage.

 


 

Will Filing A Claim Affect My Rates?

Filing an insurance claim usually means seeing a bump in your insurance premiums. Your provider will take into account if you’ve filed previous claims and the reason behind the new claim. 

If you’re found to be at fault for an automotive collision, you could see upward of a 30 percent rate hike on your policy. If you’re filing a comprehensive insurance claim for something like your car being vandalized, your rate hike might be smaller.

See what forgiveness programs are offered by insurance providers and when they become available in a policy. A customer will probably be paying higher rates for insurance three to five years after a claim is filed, so sometimes it might be worth staying with an insurer for the long run if it’ll forgive a major accident.

 


 

Our Recommendations For Car Insurance

Researching and comparing car insurance providers is a great way to get the best rate on car insurance. Our team of insurance experts has examined every major car insurance provider in the United States and determined that Progressive and Geico are smart choices due to their competitive rates and discounts.

 

Progressive: Best For High-Risk Drivers

We named Progressive the best provider for high-risk auto insurance, so it could be a good choice if you have multiple insurance claims on your record, are a younger driver, or have a DUI/DWI in your driving history.

Progressive received an A+ from the Better Business Bureau (BBB), and it offers discounts for things including driving safely and bundling car and home insurance. Progressive also offers customers in most states accident forgiveness insurance for small accidents. This kicks in at the start of the policy, and customers can upgrade to large accident coverage after five years with the company and staying violation free for at least three years.

Read more in our Progressive auto insurance review.

Geico: Best Overall

One of the reasons our research team awarded Geico the Best Overall title is the company’s easy insurance claims process, along with cheap car insurance rates. Geico Mobile allows customers to do everything from request roadside assistance to file insurance claims. We also gave the insurance provider 4.0 out of 5.0 stars for customer service.

Geico’s great rates also make it an attractive option. We got an auto insurance quote for a couple in Raleigh, North Carolina, that covered two cars for around $99 per month for six months. You can learn more about the company’s coverage options by reading our Geico auto insurance review.

 


 

Methodology

In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

  • Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
  • Availability: We consider availability by state as well as exclusions for specific groups of drivers.
  • Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
  • Cost and Discounts: Our research team reviews auto insurance rate estimates generated by Quadrant Information Services for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
  • Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
  • Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.