Filing a Car Insurance Claim. What Happens After the Crash?

Screech.  Crash. Crunch. You’ve just been in a car accident. What happens now? After police reports have been filed, insurance companies notified and, assuming nobody was injured, your next big step is to file a car insurance claim and wait.

While you’re waiting, review your policy to see exactly what it stipulates. Are you entitled to a free rental car? If so, what kind, for how long and who’s responsible for the collision coverage on the rental vehicle? Not sure? Call your agent and get it spelled out in detail.

Go to your state’s department of insurance website. (Yes, you could call them, but with government cut-backs, furloughs and mega-branched phone trees, the website will probably be quicker.) Find out what your rights are as an insured driver so you know what you are and aren’t entitled to. Do this before you agree to any claim settlement.

Be present when your  car insurance sends the appraiser. You want to make sure the appraiser sees ALL the damage. But understand that at a certain point, if the damage is assessed as not worth fixing, the insurance company can opt to total your car. Insurers usually come to this decision when the cost of repairs are at or above 51% of your car’s value before the crash, although some companies set 80% as the total-it threshold.

Once again, do not accept any car insurance claim settlement until you’ve researched your car’s actual cash value (ACV). You need to be ready to prove the true market value of your particular vehicle. If you aren’t satisfied with what your car insurance company offers you, review your policy again to see if it allows you to obtain a second opinion from an independent appraiser. You’ll have to pay for this out of pocket, but it may be worth the expense if you really feel your insurance company is trying to short-change you.

If your insurance company totals your car, the check you receive will the ACV you’ve finally agreed on less your deductible. In some circumstances, you may be able to file a claim to recover the cost of sales tax, title and registration fees when you buy a replacement vehicle.

After your car is totaled, the insurance company sends it to salvage and pockets the proceeds. Ironically, the vehicle’s parts may be worth more than the its ACV. Insurance companies do turn a profit by being stupid.

But let’s say you’re emotionally attached to your car. Can the auto insurance company force you to total it? The answer may depend on your policy and your state laws. But most insurance companies will work with you if you really want to repair the vehicle. What you’re likely to get in that case is the car’s ACV, less the deductible and less what they could have recovered in salvage.