|
Doing business with your own insurance company after a
car crash can be time-consuming and a hassle. Just imagine what it's like to deal with the insurance company
of someone else who crashed into your car. Here are some tips to ensure you maintain your cool
and your sanity when making a claim with the at-fault person's insurer.
The driver who crashes into your car is responsible
for informing his or her insurance company about the incident. However, it's a good idea for you to call his
or her insurer because motorists who cause accidents often may be reluctant reporters. So, it is important
that you obtain the most complete insurance information from the at-fault person at the scene of the
accident: insurance company name, claims phone number, address, and even the insurance agent's name.
You then inform the other person's insurer that you
have been involved in a crash with one of its policyholders and tell it about any property damages or
injuries. Also, relate only the facts of the accident to the insurer, even if you believe the other driver
to be at fault. The police will determine who is at fault and the insurer will make its determination of
fault based on the police recommendation, your commentary notwithstanding. (See What
To Do After An Auto Accident for more on that.)
Although you may feel you are not at fault in the
accident, you should contact your own insurance company. This is crucial because it establishes your
good-faith accident-reporting effort and, more importantly, can aid you if the other party and/or his or her
insurer deny responsibility for the accident. (More on that later.)
Theory vs. reality
Auto insurance, in the simplest terms, is a contract
between a motorist and a company in which the company agrees to pay for damages or losses its insured
motorist causes. If a motorist damages your car and injures you, his or her auto insurer is responsible for
paying you for your damages and injuries. Theoretically, all you should have to do is notify the other
party's insurer of your damages and injuries, take the car to a body shop, go to the doctor, and expect the
insurer to pay your bills.
Theories are not always put into practice, however.
Insurance companies often say you must obtain their authorization to go ahead with vehicle repairs
and injury treatments. Taking matters into your own hands can create a payment problem down the road if the
insurance company claims adjuster says, "I didn't authorize that." So at least get the insurance
company to accept liability before going ahead with repairs. You'll want to get the authorization in
writing, so ask the insurer to fax it to you in order to expedite the repairs.
A good strategy to use if the insurer's claims
adjuster resists paying for certain car repairs or treatments for injuries because they were not authorized
is to remind the insurer that seeking its approval on every repair technique and treatment can cause
unnecessary delays, which increase the cost of your claim in the form of vehicle-storage charges and more
legwork for the adjuster.
In addition, the at-fault driver's insurance company
can't force you to take your vehicle to a specific repair facility. Most states allow auto insurers to recommend
auto body shops, but insurers aren't allowed to demand you employ a certain repair facility. The choice is
yours.
Pick your battles
Another person's insurer also might say you need to
seek payment from your own insurer because it has no evidence of its policyholder's fault. This is why it's
a good idea to notify your insurer immediately after the crash. Although most states have made it illegal
for insurers to deny claims without reasonably investigating the facts, or to deny claims when its liability
is reasonably clear, you might not be interested in fighting the other person's insurance company.
Hiring a lawyer if you decide to take on the
at-fault driver's insurer may be a good idea, especially if you've been seriously injured. (See When
To Hire A Personal Injury Lawyer for more on that.) An attorney can help you navigate the
sometimes-murky laws that govern insurance. But keep in mind that if you hire an attorney, he or she will
take a cut of the settlement he or she helps secure.
Another option
Making a claim under your insurance policy for payment
of property damages likely will require you to pay your collision coverage deductible (assuming you have
collision coverage), but if the other person truly is at fault, your insurer likely will subrogate seek
payment from the other person's insurer to recoup your deductible. An insurer also might allow you to
make your claim under your uninsured motorist coverage, although in most states that coverage will pay only
for injuries. (See How To Buy Uninsured Motorist
Property-damage Coverage for more information.)
Your insurance premiums aren't necessarily going to
increase at renewal time if you make a claim under your own insurance policy for an accident that wasn't
your fault. Most state laws prohibit insurers from surcharging policyholders for accidents in which they
weren't at fault. However, those laws do not preclude your insurer from dumping your policy at renewal time
if you've made a couple of recent claims. (See Auto
Insurance Forum question from an insurance agent for more.)
Massachusetts and Michigan differ
So-called "no-fault" states and others that
require you to purchase personal injury protection (PIP) have slightly different rules for collecting for
your damages and injuries after an accident. For example, your PIP coverage pays for your medical expenses
and lost wages, even if you are not to blame for the crash. Reaping your PIP benefits requires you to
contact your own insurance company about the accident and to make a claim under your own insurance policy.
You'll have to pay a deductible if you make a claim under your PIP coverage.
Massachusetts and Michigan laws take the at-fault
party's insurance company out of the picture. In Massachusetts, crash victims are required to submit a claim
for property damages and injuries under their own insurance policy no matter what. If you are not to blame,
your insurer will subrogate the at-fault driver's insurer. Michigan laws go a step further. Besides the
requirement to make claims for medical expenses under your own PIP coverage, you have to seek vehicle-damage
payments from your insurance company. The only exception is when another driver hits your vehicle while it
is properly parked.
Other no-fault states give you the option of
contacting the at-fault driver's insurer to recover property-damage payments and medical expenses not paid
by your PIP.
Can't work? Totaled car? Get paid
If you miss work because of an injury you sustained in
a car crash that was someone else's fault, you can expect that person's insurance company to pay for your
lost wages. The only limit on the amount of reasonable lost-wages payments you can collect is the at-fault
driver's bodily injury liability insurance limit.
If you're hit by a driver whose liability limits are
not high enough to cover all of your medical expenses and lost wages, you can make a claim under your own
uninsured motorist coverage for the remainder. If you live in a no-fault state, your PIP coverage will pay
for your lost wages up to the limits of your coverage.
When another driver wrecks your car beyond repair,
you can expect his or her insurance company to pay you the actual cash value of your car before it was
totaled. The industry standard definition of actual cash value is "replacement cost" minus
"depreciation." Replacement cost is the amount of money it would take to replace your vehicle with
a similar one. Depreciation is the amount of money your car has devalued over time.
State laws generally allow insurers to base the
actual cash value of your totaled car on the prices of similar vehicles in your area. Insurers often hire
outside sources such as ADP Claims Solutions Group, CCC Information Services, or Mitchell International to
find out the cost of similar vehicles. The insurer also should pay for the sales tax on the new vehicle that
you purchase with the insurance money. (See What
To Do When Your Auto Insurer Totals Your Car for more information.)
Reasonable rental cars
Insurance companies always are looking for ways to
shave a few dollars from the cost of a claim, and reimbursements for rental-car costs often are the first to
meet the blade. Insurance companies often tell accident victims that they pay only a certain amount per day
for rental cars. As a victim of another person's negligence, you have the right to recoup the costs
associated with fixing the life disruption you experience, including all of the costs of renting a
vehicle while your own vehicle is unusable.
To avoid rankling the insurance company and
subjecting yourself to paying for part of a rental, rent reasonably: Obtain a rental vehicle that is similar
to your own and return it promptly when your own vehicle has been fully repaired; rent a vehicle only if
your own is not safe to drive because you're responsible for mitigating your losses; and don't purchase a
collision damage waiver from the rental company if your own insurance policy covers damages to rental cars.
If you rent reasonably and the insurer insists on
cutting the amount of its reimbursement, ask the insurer to put its reason in writing. Insurers must inform
you in writing of their decisions to deny or reduce payments.
Know what you deserve
Knowing your state's prompt-payment law is beneficial.
A part of every state's unfair claims settlement practices act outlines the time frame in which an insurer
must issue you a check for your damages.
Laws vary widely from state to state with many
simply mandating a "prompt" payment of claims, while others specify a number of days and the
interest owed to you if the insurer fails to pay within the specified period. One last factor to keep in
mind: Unfair claims settlement practices often do not extend the same rights to you if you're making a claim
against another driver's insurance as opposed to making a claim under your own insurance policy.
Writing a matter-of-fact letter to the at-fault
person's insurer is a good way to inform it of your expectations and rights. Telling the insurer that you
expect it to pay all reasonable costs you incur as a result of the accident, including payment for
repairs to or the total-loss value of your vehicle, diminished value of your car, medical expenses, lost
wages, and rental-car costs will help smooth the claims process by highlighting the insurer's
responsibilities under public policy.
|
