Photo (cc) by Robbie Howell
In a perfect world, a car insurance accident claim would go smoothly. Unfortunately, countless scenarios can throw you for a loop. Knowing what to do after an accident can avoid a hassle. Here are six common car-accident scenarios and tips on how you can curtail trouble before it starts.
Scenario No. 1: You slide on a slippery road and drive into a guardrail, damaging your vehicle.
What you should do: Notify your insurer and file a claim on your collision insurance to cover the damage to your vehicle. Even though it was a one-car accident, call the police to file an accident report. A police report will provide documentation of the crash and make filing your claim easier. It’s best to call the police when your vehicle is still at the scene of the accident.
You generally will not suffer a premium increase if you didn’t cause the accident. However, if you’ve made several claims in the past couple of years, your insurer may raise your car insurance rates if it has not done so already.
Also, an insurance company may raise your rates if it finds that you were driving in an unsafe manner. For example, if the police report says you were speeding on the slippery road, your insurance company may find you partially at fault, and thus raise your rates. If you don’t have collision insurance, you’ll have to pay the bill yourself for your car damage.
Scenario No. 2: Your vehicle is hit from behind at a stop sign. The other driver is found at fault. You exchange insurance information at the scene, but the other driver does not report the claim to his insurance company.
What you should do: Along with exchanging information with the other driver at the scene, such as address, phone number and insurance policy information, be sure to get the phone number of his insurance agent or the insurance company’s claim number. That way, you can contact his insurer directly if he falls to do so.
However, if you contact the other driver’s insurer, many car insurance companies will tell you that they cannot begin processing a claim until their policyholder files a claim. If that’s the case, ask the company to contact their insured. You should say, “Here’s the number that I have, and this is the damage that was done. I would like you to contact your insured.”
If that doesn’t work, contact your own insurance company and file a claim under your own collision insurance (if you have that coverage). You will have to pay the deductible to get your car fixed, but your insurance company should be able to get it back for you. Your insurer will pick up the check for the damage, but it will pursue reimbursement with the other insurance company (a process known as subrogation). In general, it’s easier to deal with your own insurance company because you are a first-party claimant.
Scenario No. 3: You are hit by an uninsured motorist and you do not have uninsured motorist coverage.
What you should do: You have few options in this matter. You can make a claim on your own collision insurance and then ask the uninsured motorist to reimburse you for your deductible. If he is not willing, you can sue him to get your deductible back. If you do not have collision insurance, your only option is to ask the other driver to pay for the damage. Again, if he doesn’t agree, you can take him to court.
If injuries are involved, you can also sue the other driver to pay for your medical expenses and pain and suffering. However, some states have no-fault restrictions in which you cannot sue the other driver unless your medical expenses or pain and suffering reach a certain dollar level.
Scenario No. 4: You walk into the shopping mall parking lot and find a small dent in your car. Somebody hit your car and neglected to leave a note.
What you should do: If it’s a small dent, you probably don’t want to report it to your insurance company. Not only would you face the risk of a premium increase, but you may have to pay a deductible that’s more than what it would cost to fix your car.
Filing claims on several minor accidents may result in a premium increase. So if it costs $600 to fix your dent, and your policy has a $500 deductible, it may be wise to fix the dent out of your own pocket, rather than risk filing another claim and seeing your premiums go up.
However, if it’s a large dent and the cost to repair it is significantly more than your deductible, you may want to file a claim with your insurer under your collision coverage. If you don’t have collision coverage, you’ll have to pay for the repair yourself. If you live in a state where you can purchase uninsured motorist property damage insurance, you can make a claim on that coverage.
Scenario No. 5: You are carpooling with four other people in your car. Another driver crashes into the rear of your vehicle and is found at fault. The at-fault driver is carrying only the minimum bodily injury liability insurance. One of your passenger’s medical expenses exceeds the at-fault party’s coverage by $20,000.
What you should do: Most states require that you carry Personal Injury Protection (PIP), which is coverage that pays for medical bills, lost wages, or pain and suffering that you or any of your passengers incur from an accident in your car – regardless of who’s at fault. After the at-fault party’s liability coverage has been exhausted, your PIP coverage would kick in and pay for the rest of the cost.
If your PIP money is exhausted and the medical bills remain, your passenger can sue the other driver for the rest of the damages. You, as the driver carrying the passengers, are not on the hook for any of the liability because you are not at fault in the accident.
Scenario No. 6: You are hit by a motorist who is clearly at fault. He offers to pay for the damage in cash rather than make a claim on his auto insurance.
What you should do: If you are injured or if you even have a hint of being injured, this is a bad idea. Never take a cash settlement on the spot. You don’t know how expensive your injuries may turn out to be. If you’re injured, your PIP will pay for your medical expenses and any lost wages that you may incur. Once your PIP is exhausted, your health insurance will kick in and pay for the rest of your expenses. If you do not have PIP or health insurance, you can sue the other driver to pay for your medical bills, pain and suffering, and any lost wages as a result of the crash.
If you choose to accept the other driver’s cash offer for the physical damage to your car, never take money on the spot. Make sure you know exactly how much it will cost to repair your vehicle. If you don’t get an accurate estimate, you could end up paying for a portion of the repairs yourself. For example, if the other driver offers you $1,000 to pay for damage and you later receive an estimate showing that it will cost you $1,500 to repair your car, you may have to kick in $500 of your own money.
Also, carefully examine any documents you may be required to sign that absolve the other driver of any further liability. If the other driver has consulted an attorney, it’s likely that the attorney has drafted a document that will take away your right to sue later. If you are uncertain about signing the document, consult an attorney. Of course, hiring a lawyer is an expense that you’ll have to pay for.
Even if you plan to accept the other driver’s cash offer, follow the same steps as you would with any accident, which include exchanging insurance information with the other driver and filing a police report. That way you can still file a claim with your insurance company if the other driver reneges on the deal and refuses to pay. Your insurance company will pay for the damage, but you can still sue the other driver to get your deductible back. (Keep in mind that car insurance policies require you to report your claim promptly if you want coverage, so don’t delay too long.)