This post sets out the typical steps involved in making a claim for damage to your car under another driver’s insurance policy. Remember that every claim is different so some steps may not apply, or some extra steps not listed here may be involved in your claim.
(1) Reporting the claim: you will need to contact the insurance company for the other driver to report the claim and get a claim number. You will need to refer to the claim number each time you contact the insurance company. When you first call, an insurance representative will probably take basic information from you such as: the date and time of the accident, the location, who was driving your car, what kind of car you have, a description of the damage, who was driving the other car, whether the police were called and if anyone got a ticket, a description of how the accident happened, whether anyone is injured or was transported to the hospital, who your insurance company is, and your name, address, phone number, email address and driver’s license number. If you tell the insurance company that you are not hurt, they will hold you to that…even if it takes a day or so for the aches and pains to set in.
(2) An insurance adjuster contacts you: after the initial claim is reported, an adjuster will be assigned to handle your claim. If there is an injury claim in addition to the property damage claim, sometimes both claims are handled by the same adjuster, other times there is a different adjuster for each claim. It can take 24 hours or more after the initial call to report the claim before someone contacts you. If you report a claim on a Friday evening it will probably be Monday before you hear back from an adjuster.
(3) The adjuster investigates the claim: before the insurance company will consider providing you with a rental car or agree to repair your vehicle, they will have to investigate the claim. Put another way, they aren’t going to pay for any of your damages until they satisfy themselves their insured driver is responsible for the accident. At a minimum this usually means talking to their driver to get their version of the accident and also getting your version of the accident. If the other driver tells their insurance company they were at fault, the investigation usually goes fairly quickly. If there is a dispute as to fault though, for example in a red light swearing match, the liability decision may not come as quickly. The adjuster may ask you to give a recorded statement. You should think carefully about doing this. You will be held to your answers and whatever you say may be admissible evidence if a lawsuit ever had to be filed over your accident. Generally speaking Smith & Hassler prefers clients we represent not give recorded statements, particularly if liability is clear. If the other driver’s insurance company does not accept liability quickly, or if there is a liability dispute, you should probably consider talking to an attorney. If you have full coverage insurance on your car, you might also consider filing the claim with your own carrier to get your vehicle repaired sooner rather than later. Your insurance company can always recover their money from the other driver’s insurance company later (including your deductible).
(4) An insurance representative inspects your vehicle: before the other driver’s insurance company can pay for your damage, they need to know what the damage is. If your vehicle is damaged but can be driven safely, the insurance company will probably ask you to take your car to one of their “preferred estimators.” This will probably be a local car dealership that has a collision repair center. During this initial estimate your vehicle will be given a visual inspection and some photographs will be taken of the damage, but also of your vehicle as a whole, probably including pictures of the interior. The pictures taken of the vehicle (but not of the accident damage) are to document the overall condition of your vehicle, which factors into its value. During this initial inspection, the shop will probably not put your vehicle up on a lift or remove exterior parts such as bumper covers. If your vehicle is not drivable because it is too damaged, the insurance company will send a representative to inspect your vehicle where it is located, usually at a storage lot that it was towed to after the collision.
(5) The insurance company pays you based on the initial estimate: the shop that did the initial estimate will send their report to the insurance company who will issue a check for the cost of the initial estimate. Usually this check is made payable to the registered owner of the vehicle, but who the check is paid to may change, for example if there is a lienholder.
(6) If your vehicle is declared a total loss: a vehicle is declared a total loss when the estimated cost of repair is at or above a certain percentage of the vehicle’s fair market value (or Blue Book value). For example: you drive a car that has a Blue Book value of $10,000. The estimated cost to repair your vehicle is $11,000. Because the cost of repair is more than the vehicle is worth, the car is a total loss and you would get a check for the market value of $10,000. Unfortunately no matter how much you love your car, or how much you want to keep it, you cannot force an insurance company to spend more to fix a car than it is worth. Sometimes a vehicle is totaled if the estimated repair cost is less than the market value, for example, you have a car with a market value of $10,000 and the estimated repair cost is $8,000. Because the estimated repair cost is 80% of the value of the car, the insurance company will probably declare it a total loss. Why? Because $8,000 is the initial estimate, and once the body shop starts “tearing down” the car, they usually find additional damage that will add to the repair cost. The cost to fix the additional damage might push the cost of repair over the market value of the vehicle, so rather than risk that happening insurance companies often prefer to go ahead and total a vehicle when the cost of repair reaches a certain percentage of the value. There is no set percentage and different insurers handle the issue differently, but when the repair cost is at or above 70% of the vehicle’s market value, most insurers will total the car. If your vehicle is totaled and you own it free and clear, you will get a check for the market value (Blue Book value). If there is a lienholder, then the lienholder gets paid whatever the amount of the lien is and you get a check for any amount left over. Now for some bad news: if you are “upside down” on your car and owe more than the car is worth, the other driver’s insurance company does not have to pay you what you owe, they only have to pay you the market value.
(6) Decide who is going to repair your vehicle: Texas law says you have a right to decide where to have your damaged vehicle repaired. If you have a newer vehicle or a less common brand you will probably want to take it to the dealership for repair, and you have a right to do that. Insurance companies often like to steer people making claims with them to particular repair shops and often try to sell you on these shops with a promise that the work is guaranteed. They probably want you to use these repair shops because it saves them money. That does not mean these repair shops do bad work, but you don’t have to take your car there for repair if you don’t want to.
(7) Your chosen repair shop assesses the damage: once you decide on a repair shop they will assess the damage. This will involve a more thorough inspection than the initial look-over mentioned above, and usually involves taking parts off the car or putting it on a lift to check for non-obvious damage. Often the shop will find additional damage not included in the initial estimate. This is referred to as a “supplement.” Your shop will contact the other driver’s insurance company and tell them about the supplement. The insurance company may want to send a representative to your repair shop to see the damage for themselves. Assuming the insurance company agrees the supplementary repair is related to the accident and necessary, they will approve the supplement and your repair shop can do the repair. The insurance company will issue a separate check for the supplement payable directly to your repair shop: supplement checks are not made payable to you.
(8) Rental car while your vehicle is being repaired: if your vehicle is damaged but repairable, you have a legal claim for what is termed “loss of use.” This is simply a claim for money damages for being without your vehicle. Technically the way rental car works is that you go out and rent a car, keep the receipts and submit them to the insurance company for reimbursement. It is often more convenient for everyone if the insurance company provides you with a rental car that is billed directly to them (the insurance company probably gets a discounted rate from the car rental company too). You are entitled to rental car for a “reasonable repair period.” You should talk to the adjuster handling your property damage claim about providing you with a rental car and you should also get a very clear statement from the adjuster on how many days of rental car they are willing to pay for. You don’t want to keep the rental car longer than the insurance company will pay for and get stuck paying the extra days yourself. If a supplement is called in, the insurance company should extend the rental, but call and make sure of this. You are entitled to “basic transportation” which usually means the smallest, least expensive vehicle the rental car company has. The exception is if you need a specific type of vehicle for your employment, for example if you are a plumber and you need a pickup truck, you should be reimbursed for rental of a pickup truck. Again: make sure ahead of time the insurance company will reimburse if you are getting anything other than the least expensive rental car available. If you were provided with a rental car while the insurance company was figuring out if your vehicle was a total loss, and they decide it IS a total loss, then your claim for rental car ends when the insurance company makes you an offer on your totaled vehicle. Remember: if you are in a rental car provided by the insurance company and they tell you your vehicle is totaled, one of the first questions you should ask the adjuster is: “How much longer will you cover the rental car?” Make sure to turn the rental in on time so you are not stuck with additional rental fees.
(9) When your vehicle is repaired: if you drive a newer and/or particularly expensive vehicle, you might consider a diminished value (“DV”) claim. A DV claim seeks compensation for the reduction in market value of your vehicle because it has been in an accident. Damage resulting in an insurance claim will almost certainly appear in a Carfax report on your vehicle, so when you go to sell it or trade it in, you will probably get less money because your vehicle has prior damage. The DV claim seeks to recover some of that loss in value. The proper way to present a DV claim to the insurance company is to have a certified appraiser inspect your vehicle after it has been repaired and prepare a written report to submit to the insurance company. Smith & Hassler can help you with a DV claim.
This has just been a basic discussion of the property damage claim, we haven’t even talked about the injury claim yet! Getting sound legal advice early on in a car accident claim can make a tremendous difference. You can call Smith & Hassler any time for a free consultation and to discuss your car accident case with an attorney.
