Auto Insurance Claims Process: Not-At-Fault Accidents
Today, I’m going to talk to you about the claims process for an auto insurance claim whenever you’re not at fault, meaning the other people are at fault. You have been involved in an accident, and someone else’s responsibility for the accident that’s happened. They’re going to be responsible for the property damage to your vehicle, as well as also any bodily injury that you have incurred, or to everyone else that’s in the vehicle with you.
So, let’s start talking about the claims process. You’ve been involved in an auto accident, you or one of your family members, and it’s in one of your vehicles. What are you going to do?
First things First…
The very first thing is you need to make sure that you call the police. Call the police or whatever authority should be there at that time. Make sure that you get them there.
This is really important for a few reasons, but one of them is so that you can have some sort of a legal document to verify that the accident did happen, and it happened as you state it did. On that record, it’s going to have several different things that are really to you for your insurance claim. One of them, it’s going to have what happened. It’s going to have the time and date, that way you can reference where it was located and also what the weather was like and all those different things like that. It’s going to have both of y’all’s information on there. It’s going to have your names, who owns the vehicle. It’s going to have your contact, as well as also what the insurance company information is as well. All these different things are going to be on there, including if there are any witnesses. So if there are any witnesses, as well as the diagram of the incident, all that stuff will be on there and can become important in the claims process.
Another thing that you can do while you’re there is you can go ahead and just approach the other party and say, “Hey, would you mind if we shared insurance information with one another?” And you can just simply use your cell phone, and take a picture of that. That way you have that for your records also, in the event that there’s any ambiguity or questions about that.
What do I need to do? What’s going to happen!?
All right, so the claim has happened. You’ve got the report. Now you’re ready to make sure that it has been reported. You’re going to be waiting to hear from your adjuster. Well, go ahead and do reach out to your insurance company, even though you are not at fault. If you have an independent insurance agent, they will help you to understand what the process is. They will want to keep a copy of that record on your file. And then also, if there are any problems or you just need assistance, they will be there to help you in that claims process.
So you turned the claim in, and you told your insurance agent about it. They’ve made a copy of the report and whatever other documents that you have. What you do next is wait to hear from an adjuster. You should hear from them within 24 hours. Sometimes it may take a little bit more time, but typically it should be within 24 hours. If you haven’t heard from them, you may need to go ahead and just report that claim on your own.
But let’s just say that everything goes smoothly, and the process is moving ahead. So the first thing that’s going to happen is the adjuster’s going to contact you and give you one of three options. Either one, they’re going to come out and they’re going to take a look at your vehicle themselves, estimate the damages, and then they will tell you, “Okay, this is what we believe it will take to fix your car. Do you have any medical bills, or do you need a rental car?” And then you’ll provide them with that information, and they’ll take care of those things for you.
Now, in this scenario, you will go to whatever body shop it is that you prefer and provide them a copy of the estimate to show what the damages are. And then they should be able to take care of those damages for you. In that scenario, typically they’re going to pay you directly. Then you will pay the body shop for the damages that were done.
The second scenario is the insurance company may have a preferred shop or a pro shop. All that means is just they already have agreed upon working with certain companies inside of your area, meaning different body shops. They have a contract with them where they will take care of damages and estimates for them in a geographic area. This is a good situation for you because it helps cut out one of the middlemen and also helps speed up the process for you. You can bring it to the body shop. They can take a look at it and make an estimate, and then actually just schedule when they’re going to fix it for you. And they just take care of it. There’s no haggling over how much it’s going to cost to fix it. They just have already agreed that the body shop will take care of it, take a look at it, tear the vehicle down, get the right parts, and get it back to you as it was before the damages ever happened.
In that situation, they paid the body shop directly, and you don’t have to worry about getting money, then turning it over to them or anything like that. Also, typically the repairs are guaranteed for the life of the car. As long as you own that car, those repairs are typically guaranteed for you. If there’s any question… This helps eliminate any questions about, okay, well they had an estimate, well, they found out something else is damaged in there. The body shop will just be able to take care of all of that at one time.
Well, the third scenario is the insurance company may say, “Okay, we’ll go to a couple of body shops that you like, get a couple of estimates. And then we’ll pay from the lesser of the two.” This is a situation where they will probably also, again, pay you. And then you have to pay the body shop. In some situations, they may pay both of you, and you both have to sign it, or pay the body shop once you have elected which body shop you want to use.
So that’s the three different situations. Once you have established that, okay, the vehicle is damaged, this is how much it’s going to cost. This is how long I’m going to be out of a car. They will then provide you with a rental car at their expense for a like and kind vehicle. So if you have a subcompact car, they’re going to give you a subcompact rental. You have a pickup truck, they’re going to give you a pickup as a rental. If you have an SUV of some sort or a minivan, they’re going to give you a similar type of vehicle for you.
If there’s a misunderstanding, just understand that if you need a larger vehicle, because that’s what you drive, they should be able to provide you with that. Now understand depending on where you live, it may be a little delay in getting a type of vehicle for you because of the rental market, and also if you happen to live in a rural area. But understand that they’re going to take care of that.
Well, let’s say that you have medical bills, they should set up for you to pay the expenses of any medical visits that you have, prescription drugs, any rehabilitation, as well as also any testing, such as MRIs, blood work, anything like that. They are going to take care of those things for you.
What to do if you haven’t heard from the other parties’ insurance company
Now, what if you haven’t heard from the insurance company? It’s two, three days later, and you haven’t heard from anybody. Well, there are a couple of scenarios that you can follow. One of them is you can report the claim yourself. If you have a copy of the police report that provides the information for the other party’s insurance, you can call that insurance company and report it themselves. Or your independent agent will be glad to help you with that process. In this situation, if you have the police report, remember you have to have the police report, you can call them and say, “Hey, look, I had an accident with your claimant. I don’t see that anybody has called me yet. Can we report a claim?”
They’re going to ask you several different questions. One of those is going to be, do you have a copy of the police report? You can tell them that. They will either ask you to send it to them, or they will get a copy of it themselves. But this is the key. This will verify, yes, they did actually hit you. Because otherwise, they’re going to be dependent on their client calling them and reporting the accident for them. They are tied to that. So you have to have that police report.
Well, okay. So there are two different situations. Once the claim is turned in, however, it is turned in, the process is very similar. One of those three different options, either they’ll adjust it, tell you to go to a preferred body shop, or tell you to get a couple of estimates, and then everything else will follow thereafter that.
The person that hit me doesn’t have insurance! What do I do?
Well, what happens if the person hits you doesn’t have any insurance? Unfortunately, that does happen. In every state, it is illegal to drive or operate a vehicle if you don’t have insurance. However, there are many people that just don’t, and there are several different scenarios where they will not have insurance that could apply to your damages.
Statistically, it has been proven that in the different states, it is anywhere from 5% to 30% of people do not have insurance. One of those is in Texas, one of the states we write in, it’s 8%, meaning almost one in 10 people do not have insurance. In Louisiana, that number is 12%. That’s a little bit more than one in 10 do not have insurance. Arkansas is 19%, that’s almost 20%. And then in Mississippi, that number climbs to a staggering 29%, meaning 29% of drivers on the road have no insurance. Now, these are just people that operate a vehicle. This is 29% of people that own a vehicle do not have insurance. That is illegal for that to happen, but it is a fact in each and every one of the states. That means they don’t have insurance. So if a claim happens, they’re not going to have insurance to apply, to pay for your property damage or any of your medical bills.
The thing is, though, is that you need to understand that those numbers are actually going to be higher than that. Because there are two other scenarios where someone may not be insured that’s driving. One of those is a lot of insurance companies have exclusionary language in their policies, meaning that there are limitations in the policy, stating that if you live in the house and you operate that vehicle, you are automatically excluded. That’s why it’s important that everybody in your house is listed as a driver. If you talk to your independent insurance agent, they can help you to understand if that applies or not to your policy, but just understand out there, many insurance companies will not cover somebody if they’re not listed as a driver and it’s proven they either have regular access to that vehicle or they live in that house or they just, period, drive it at all. In that case, there’s no insurance. That raises that number higher.
Well, the third scenario that the number does not include is people who are intentionally excluded. When I say that, it means that the person who owns that vehicle and owns the policy, literally signed a document stating that they know that that person was not covered as an insured driver. They would do that because of either one, they’re just young, or they have a lot of violations, and it was going to make it cost-prohibitive to them to ensure a person. In those situations, there is no insurance that’s going to apply. Absolutely no insurance will apply from their policy.
Just sue them… right?
So what do you do? Well, one option is you could sue them. Well, here’s the just cold reality. If they can’t afford insurance, they are probably not going to have the funds to either pay out of pocket or to be able to have wages garnished or anything else. They’re just not going to have a source to probably take care of those things for you. You could pursue it, but unfortunately, you’re probably going to run into a dead end.
Claim it on your own insurance
What do you do in these situations? Well, there’s an add-on that you can add to your policy that will take care of this. You can add this on, or you can just decide to pay it out of your pocket, but paying out of your pocket doesn’t feel right. Correct? You can add on a coverage called uninsured motorist coverage. Uninsured motorist is exactly what it says. It is for an accident where the people who hit you or caused an accident have no insurance. Then this means that your policy under that uninsured motorist coverage will apply to you, to your bodily injury or also your property damage. But understand there are two parts to that.
Uninsured motorist coverage has two different parts: bodily injury and property damage. Bodily injury has to be bought first. And then if you have that, you can buy the property damage. Bodily injury’s going to take care of your medical bills, medical expenses, all those different things that are associated with that accident that is not your fault. The property damage is going to fix your car or anything that you’ve got that was damaged as a result of that accident. Both of those incidences are not chargeable accidents against you.
Now, depending on the state, you may or may not buy the property damage part of it if you already have a collision. In the state of Louisiana, if you have collision coverage for your vehicle, you cannot buy the property damage portion of an uninsured motorist, but you still can buy the bodily injury portion of it. In the states of Texas, Mississippi, and Arkansas, you can have uninsured motorist property damage instead of collision. Typically, it has a lower deductible. And also, remember it is not a chargeable accident against you if you have those coverages. So you can file underneath those coverages, that’ll take care of your medical bills, and your property damage. And I suggest you carry the same limits on those as you have on your liability.
What to do if the insurance company says they can’t pay any more
So what’s another scenario? Another scenario is the insurance company calls up and says, “Hey, we can’t pay anymore. We’re not paying anymore. We have exhausted the policy limits.” What does that mean? And what do you do now? You’re sitting there wondering… You get that phone call and you’re thinking, “How can this be? How can you say you have accepted responsibility, and now you’re telling me you’re not going to pay anymore? That doesn’t seem right. And that doesn’t like that’s even legal.”
Well, the reality is that every policy has a limit to it. And a lot of people have low limits, unfortunately. A lot of times people will have what is called state minimum limits. Your insurance agent… Understand this. This is a little side note. Your insurance agent has not done you a good job. They have done you a disservice if they’ve allowed you to walk out of their office or to buy state minimum liability limits. They have done you a disservice. You should ask them why did they do that, and find yourself another insurance agent. I highly recommend you choose an independent insurance agent because they will help you to understand the coverages that you have and what that means to you.
So let’s say that whoever the person was… The claims process is going through. Man, the adjuster has responded quickly. They’ve taken care… They have gotten your vehicle in to get an estimate for it. You have gone to the doctor to get examined, to see what rehabilitation you may have for the accident. They’ve been paying. And then all of a sudden, you get the call, and they say, “Look. Hey, we’ve spent all the money that they have. There’s no more money. We can’t pay anymore.” Well, then you can turn to whoever the claimant was, whoever the other party was, and can say, “Okay, y’all have got to start paying now.” Again, the reality is there may not be an option for that. Maybe they do. Maybe they don’t. Maybe they do have the money in their pocket. Maybe they have it in their bank account. Maybe you can garnish their wages or something like that to get these things taken care of. But the reality is they may not.
Underneath those limits, it’s going to include three different numbers. That’s 25/50/25… Is usually the state minimum in most states. Some states are actually lower than that. Louisiana is lower than that. So those numbers, what they represent is $25,000 for bodily injury for the entire… For one person. That’s per person. 50,000 for bodily injury for the entire accident. That’s not only your car but other cars too. And then $25,000 for property damage per accident. There’s more than one car, that limit. That 25,000 applies to all the vehicles involved in that accident.
Those are very minimal limits. Those are very small. Think about the car that you own and that you drive right now. How much was it brand new? How much could you buy it brand new today? Have you priced new cars lately? You can’t buy a new car for $25,000. The lower end of cars is going to be $30,000. Most of the vehicles on the road, pickup trucks, SUVs, and cars are going to be $50,000 or more. The larger luxury SUVs out there, there are tons of them, are $100,000 plus. How far is that going to go to replace your vehicle? Especially understand that they are designed to crumple when they’re hit, so that way the vehicle takes the damages and you don’t. That way, it helps save you from bodily injury and from possible death. Those vehicles are going to take massive damage. $25,000 does not go very far.
What about medical bills? Do you know how much it costs to get an MRI? It’s $5,000 just for that. Maybe even more than that, I’m not sure. But those limits are very minimal. What happens?
Well, you can then file it underneath, there’s the second part of that uninsured motorist coverage called underinsured motorist. That will take of these situations where the insurance companies run out of money. Your underinsured motorist can then pick it up from there to finish paying for whatever the bodily injury or also property damage for you. Again, these are non-chargeable accidents.
The other scenario is you’d have to pay out of your pocket, but that doesn’t feel right. But again, uninsured motorist, underinsured motorist, bodily injury, and property damage, are coverages that you may want to look into buying. Talk to your independent agent about that. They can help you to understand more about that.
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