So You've Had an Automobile Accident: What's
Table of Contents
To Do If There Is An Accident
To Avoid At The Scene Of An Accident
Rights Under The Fair Claims Settlement Practices Regulations
Body Repair Shops
You ’ve Had an Automobile Accident: What ’s
Driving on America ’s highways can be a risky proposition. Whenever
you’re in a vehicle, there’s a chance you’ll
be involved in a traffic accident. Whether it’s a small
fender bender or a major injury accident, knowing in advance what
to do can help you avoid costly mistakes. This guide discusses
what to do after an accident and what to expect when you file an
automobile insurance claim with your insurance company. For
your convenience, an accident checklist is contained herein which
can be kept in your vehicle for future reference.
When purchasing insurance, carefully review the application before
signing it to be certain that the coverages, policy limits, and
deductibles suit your needs. After you receive the policy,
review the declaration page. It contains important information
on who is covered, the vehicles insured, as well as the coverage
limits and deductibles. Make sure the information is correct and
the coverage is what you purchased. If changes are needed,
send your request to your agent and/or insurance company in writing
and keep a copy. Use certified mail/return receipt requested
to verify receipt of your letter.
Become familiar with your automobile insurance policy before it’s
needed. Read the policy thoroughly so you know what is covered
and what is excluded.
Some of the most frequently asked questions about automobile
insurance claims are discussed below:
What to Do If
There Is an Accident
Q. What Should I Do at the Scene of an Accident?
A. Immediately stop at the scene.
- Call 911 if there are injuries.
- Call the police. In some areas police authorities may not come
to every accident scene. They may consider factors such
as the severity and location of the accident (e.g., some police
authorities will not come to the scene if the accident is on
private property). However, you should attempt to notify
the police. You should also be aware that most policies
require notification of police within a specified time period
if the accident is a hit and run. Obtain names,
addresses, telephone numbers, and driver’s license numbers
from all drivers.
- Obtain license plate(s) and vehicle identification numbers. Ask
to see driver’s license(s) and vehicle registration(s)
to verify that the information is accurate.
- Obtain names, addresses, and telephone numbers of other passengers
and any witnesses.
- If you have a camera, take photographs of the damage, the position
of the cars, and the accident scene (e.g., traffic controls,
- If the owner of a damaged car or damaged property cannot be
located, leave a note with the names and addresses of the driver
and owners of the involved cars.
- Notify your agent and/or your insurance company immediately.
- If anyone is injured or the vehicle damage exceeds $750.00,
you must report the accident to the Department of Motor Vehicles
within 10 days. Failure to notify the DMV may result in
the suspension of your driver’s license.
to Avoid at the Scene of an Accident
- Do not argue with other
drivers and passengers. Save your story for the police and
your insurance company.
- Do not sign statements regarding fault or promises to pay for
- If another party offers to pay your deductible, don’t
sign anything releasing him or her from further responsibility. By
releasing the other party, you jeopardize your insurance company’s
subrogation right, and the company may refuse to pay for damage
to your car.
Frequently Asked Questions
Happens After I File the Claim with My Insurance Company?
insurance company will contact you for additional information,
such as a detailed account of the facts, or a written or recorded
statement. An examination under oath may be requested. As
part of the investigation, other drivers and witnesses may be
contacted. If you have medical payments or an uninsured motorist
claim, you must provide documentation of your injuries, medical
expenses, lost wages, et cetera.
Q. What Should
I Do If the Insurance Company Does Not Contact Me?
claim representative should contact you within a reasonable period,
usually 24-72 hours after you report the loss. If you do
not hear from anyone, call your agent or insurance company for
assistance. If they are not responsive, or you believe
there is an unreasonable delay in settling your claim, contact
the Department of Insurance.
Q. How Does
the Insurance Company Evaluate Vehicle Damage?
adjuster or appraiser usually inspects the vehicle. Do
not authorize repairs until the adjuster has inspected the vehicle
and you are satisfied with the scope of repairs and the repair
facility. If the damage is relatively minor, the company
may ask you to submit competitive repair estimates.
Q. What Will
the Company Pay on a Physical Damage Claim Under a Standard
the company will pay the lesser of
amount necessary to repair the vehicle or
actual cash value (ACV) of the vehicle.
Read your policy to be certain of what is and isn’t covered. Pay
particular attention to exclusions. For example, there is usually no coverage
for stereo equipment, a telephone, or a citizens band radio unless the equipment
was permanently installed by the automobile manufacturer in the normal opening
in the dash or console. Coverage is usually available for such special
equipment for an extra premium charge.
Q. What Is Actual
Cash Value (ACV)?
cash value means the fair market value of your car before the
accident. This is the price that a willing buyer would
pay a willing seller, neither under pressure to buy or sell.
Your company may survey
dealers, value guide books, and private parties for a similar
vehicle to approximate the ACV. A computerized market analysis
system might also be used.
If you do not agree with
your company’s figure for ACV, you may want to do your
own survey of dealers and private party sellers in your area. Companies
are required to offer a fair settlement. If you can show
that your figure more closely approximates the ACV, your company
should be willing to negotiate. Your policy may also contain
an appraisal provision.
Q. What Is an
standard policies contain an appraisal provision which can be
helpful in the event that you do not agree with your company
on the amount of loss. Read your policy to see if it contains
one. Under this provision either of you can demand an appraisal. Each
party selects a competent appraiser. The appraisers then
select an umpire. If the appraisers cannot agree on the
amount of loss, their differences are submitted to the umpire. An
amount that any two agree upon is binding. Each party pays
its appraiser; the umpire fee is shared.
Q. How Is the
Check or Draft Prepared?
check may be made payable to the insured and any lienholder,
such as a bank or finance company. If the vehicle is repaired,
the company may also include the repair facility as a payee.
Q. Who Is Responsible
for the Balance of a Car Loan?
borrower is responsible for the balance of the loan, even if
the vehicle is stolen or damaged beyond repair. If your
claim payment is less than the loan balance, the lender will
expect you to pay the difference. Coverage commonly referred
to as "gap" insurance can usually be purchased to protect against
Q. Will the
Company Pay for a Rental Car While Mine Is Being Repaired?
if you have purchased rental vehicle coverage. Review your
policy before you rent a vehicle. Although policy limits vary,
the company pays up to a specified amount per day for a specified
number of days. The coverage ends when your vehicle is
repaired, the loss is paid, or after the specified period, whichever
If your vehicle is stolen,
the policy may automatically provide transportation expenses.
Again, review your policy to be sure. This type of coverage
usually begins 48 hours after the theft and ends when your vehicle
is recovered, the loss is paid or after a specified period, whichever
Q. What Is a
Collision Damage Waiver and Will the Company Pay These Charges
for the Rental Vehicle?
terms of the rental agreement make the customer responsible for
collision damage while he or she has possession of the vehicle. Additionally,
rental companies insure themselves for damage to the vehicle
caused by collision. For an additional fee, the rental
company will waive all or a portion of the customer’s obligation
to pay repair costs for damage to the vehicle caused by collision. Both
the amount of the fee and the language of the waiver vary.
Coverage for collision
damage to the rental car under your personal automobile
policy depends upon the policy language. Read your policy
carefully. Ask your agent or company before you rent a
Q. What Is the
is the remaining value of your damaged vehicle if your vehicle
is determined to be a total loss. It is usually determined
through bids from salvage buyers. The company may sell
the salvage to the highest bidder. However, it is not obligated
to do so. If you decide to keep the damaged vehicle, the highest
salvage bid may be deducted from your settlement. In effect,
you are "buying back" your vehicle for the salvage value. If
you retain possession of the salvaged vehicle, it is your responsibility
to file a salvage certificate with the Department of Motor Vehicles.
Q. What Is Subrogation?
is the right of the insurance company to recover from a third
party the amount of damages it paid to you. For example,
if another party is at fault in an accident that damages your
car, and you have a collision claim, your company will ask the
other party to reimburse the money it paid on your claim. The
policy requires your cooperation with the company’s subrogation
efforts. Also, you cannot do anything that jeopardizes
the company’s right of recovery. For example, you
cannot sign an agreement releasing the other party in exchange
for payment of your deductible.
Q. Is the Company
Required to Help Me Recover My Deductible?
and no. The insurance company must advise you as to whether or
not they intend to pursue subrogation. If the company pursues
subrogation, they are required to include your deductible as
a part of the process. However, if the company does not
pursue subrogation they are required to advise you of that fact
so that you may pursue your deductible on your own. If
their efforts are successful, in whole or in part, the company
will reimburse you in accordance with the recovery. For
example, if 100 percent of the paid claim is recovered, you will
receive 100 percent of your deductible; if the recovery is 65
percent, you will receive 65 percent of your deductible. Any
expenses or fees (e.g., legal fees, incurred by the company in
its recovery efforts) will be apportioned between the company
and you, if recovery is made. However, if you choose not
to have the company include your deductible in its efforts, you
can seek recovery directly from the other party on your own. But
before you do, discuss the matter with your company to avoid
jeopardizing its recovery.
Q. Is the Car
Covered Outside of America?
policies provide coverage in other states, U.S. territories and
possessions, and Canada. Most states and territories have enacted
financial responsibility laws requiring drivers to carry a specified
amount of automobile insurance to cover losses resulting from ownership
or operation of a motor vehicle. If the financial responsibility
requirements where you are traveling are higher than your policy
limits, your company will meet the higher requirements. Most
policies do not provide coverage in Mexico, so if you plan to drive
your car there, it’s wise to buy that coverage separately. Check
your out-of-state coverage before you travel.
Q. What Should
Be Done If a Lawsuit (Summons and Complaint)Arises Out of an
your agent and insurance company immediately. Keep a copy
for yourself and mail or deliver the original documents to your
company. Do not give statements or discuss the accident
with anyone except a verified representative of your company. If
the lawsuit arises out of a covered loss, your company will provide
Q. Is a Newly
Acquired Vehicle Covered?
policies provide 30 days automatic coverage for a vehicle that
replaces a vehicle already on your policy. The coverage
normally is the same coverage you had on your previous vehicle. Notify
your broker-agent as soon as possible of any replacement vehicle.
If you wish additional coverage, there is usually a requirement
that you notify your agent or your company within a designated
Most policies also provide
automatic coverage for a newly acquired vehicle that is an addition
to the vehicles you already have on your policy. There
are usually specific conditions that must be met. For example,
the purchased vehicle must be reported to your agent or company
within a designated time period (e.g., 30 days) or there may
be a requirement that in order for coverage to automatically
apply, all of your other owned vehicles must be insured with
Read your policy. Don’t wait until
after an accident.
- If you don’t understand your policy,
ask your agent
and/or company for
- If you have an accident, call the police.
are injuries, call the paramedics.
- Get as much information as possible at the accident scene
to furnish to your
agent and/or insurance company.
- Immediately notify your agent and/or insurance company
of an accident.
- Cooperate with the insurance adjusters/investigators to aid
in their efforts.
- If you don’t understand something about the claims procedure
(e.g., amount of settlement offer), ask your
agent and/or insurance
company representative to explain.
- Notify your agent or company in writing of any change in
your vehicle ownership.
Rights Under the Fair Claims Settlement Practices Regulations
In general, insurance
companies are required to do the following:
- Advise you of all benefits, coverage, time limits, or other
provisions of your insurance policy.
- Acknowledge claim, start investigation, provide forms and instructions,
and provide reasonable assistance immediately, but in no event
later than 15 days after receiving notice of claim. (Notice of
claim is any written or oral communication to the insurance company
which reasonably apprises the insurer that you wish to make a
- Respond to communications received from you immediately, but
in no event later than 15 days.
- Accept or deny the claim immediately, but in no event later
than 40 days after receiving proof of claim. (Proof of claim
is documentation in your possession which provides any evidence
of the claim and supports the magnitude or the amount of the
loss such as estimates of repair or police report indicating
theft of your vehicle, et cetera.)
- Unless the insurer has provided you with the name of a specific
towing company prior to your using a towing facility, the insurer
must pay reasonable towing expenses.
- Offer a fair settlement. If you suffered a total loss,
settlement must include taxes, license and transfer fees. The
settlement must reflect the value of a comparable deductions
from the settlement for salvage must be fair, measurable, and
- Once the claim has been accepted, the insurer must pay the
claim immediately, but in no event later than 30 days from the
date settlement was reached.
- Advise you whether or not they will pursue subrogation. If
the insurance company pursues subrogation, they must include
your deductible unless you have already recovered your deductible.
The above represents a
paraphrased brief overview of some of the Fair Claims Settlement.
Automobile insurance fraud in the U.S. historically has taken several
forms. The most common fraud schemes involve automobile property and
- This type of fraud most
often involves dishonest auto body and repair shops and/or insureds
who may employ a variety of illegal or questionable techniques including:
- Reporting parts of vehicles as damaged or lost when in fact
they were not damaged or lost prior to the shop receiving the
- Making final cost in excess of the original estimate of damage.
- Billing for repairs that were not authorized.
- Charging for genuine parts when aftermarket or used parts from
a junkyard were used.
- Pounding out dents or using bondo when charging for brand new
- Falsely reporting stolen vehicles or vandalism of vehicles
in order to collect insurance monies.
It is always important for the consumer to review carefully all
paper work from auto body and repair shops in order to protect
against potential fraud. Also, consumers should be cautious
of any auto body or repair facility that makes referrals to medical
or legal offices. This practice may be an indicator of "capping." Capping
(a felony in most of the U.S.) is the illegal referral of clients to
legal offices for a fee.
Automobile Accidents -
Automobile fraud often involves organized auto accident rings.
Staged auto accidents, which are not accidents at all, follow
several basic schemes including:
- Suddenly stopping for no apparent reason
- Intentionally disregarding the right-of-way
- Giving up the right-of-way in order to cause an accident
- Claims report list passengers who were not in the vehicle at
the time of the accident
- Witnesses are listed who were not at the scene of the accident
- Injuries claimed are excessive compared to vehicle damage
- Driver has a temporary vehicle registration
- Prior damage to the other vehicle
- Contact by an attorney without being solicited
If you have been in an
auto accident, be cautious of any unsolicited referral to a body
shop, law office or medical office. Organized accident
rings and cappers actively solicit others in the community to
participate in the creation of accidents. Often these accidents
only exist on paper (referred to as paper accidents), and no
innocent parties are involved. Paper accidents have gained
in popularity among fraud perpetrators, as they are less dangerous
from a bodily injury standpoint, and there is less likelihood
of police involvement.
Auto Body Repair Shops
Under California Insurance
Code §758.5, for example, an insurance company cannot require
that an automobile be repaired at a specific repair shop. However,
an insurance company can recommend that an automobile be repaired
at a specific repair shop under the following conditions outlined
- The consumer specifically requests a recommendation from the
insurance company to a repair shop.
- The consumer has been informed in writing of the right to select
a repair shop of his or her choice.
- If the consumer agrees to use the recommended repair shop,
the insurance company must restore the damaged vehicle to its
condition prior to the accident or loss with no additional cost
other than as stated in the policy or as otherwise allowed by
- If the company makes an oral recommendation to a repair shop,
and it is accepted by the consumer, then the company must follow
the oral recommendation with the prescribed written notice within
five calendar days as specified by law.
If the vehicle is repaired
in a shop chosen by the consumer, then the insurance company
must pay the reasonable costs to repair the vehicle in a workmanlike
manner. The insurance company is prohibited from limiting
or discounting reasonable repair costs based on charges that
would have occurred if the vehicle had been repaired at the company's
recommended repair shop. Also, the insurance company must
stand behind the repairs of the recommended shop if the vehicle
is not repaired properly.
Auto Replacement Parts
In some cases an auto
repair may include replacement of damaged parts with after-market
parts. After-market parts are parts which are not made
by the original manufacturer. After-market parts may be
equal, better, or worse in quality than original equipment manufacturer
parts. Consumers should take note of the following:
- An auto repair shop is required to provide a written repair
estimate of the cost of repairs prior to initiating repairs to
the vehicle. Once the work is completed, the shop must
then provide a written repair invoice. State law requires
that the type of auto parts used in repairs must be identified
on the repair invoice. Consumers should carefully check
their invoice to ensure that the auto body shop has identified
each auto part replaced as being used, reconditioned, rebuilt,
an original equipment manufacturer part, or an after-market