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What is an insurance claim and when should you file one?

Person reviewing their insurance claims.

If you’ve never been involved in a car accident, you might be unfamiliar with how your car insurance policy works. In order for your insurance provider to cover damages or medical expenses in a situation where you were at fault, you’ll have to file an insurance claim. Fortunately, Bankrate’s team of insurance experts is here to help you understand what is an insurance claim, when you should file one and how the filing process works.

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What is a car insurance claim?

An auto insurance claim is essentially your way of notifying your insurance provider that you’ll need to use your policy to cover expenses after your car is damaged in a covered incident. The process varies from provider to provider, but how you file a car insurance claim usually begins with a phone call, filling out an online form or using your insurance company’s app to begin the process.

It’s important to note that you should file a claim as soon as possible after a car accident. You may even be able to do it while you’re still at the site of the accident. You should file a claim whenever something happens that your policy would cover. So, for example, if you have comprehensive coverage and your car was vandalized or stolen, you would file a claim for the related loss.

Really, when you’ll file an auto insurance claim depends on the types of coverage you have. So let’s look at some of the most common coverage types:

  • Liability coverage: This provides protection when you cause an accident or damage with your car. Most states require you to have bodily injury liability coverage if you hurt someone else and property damage liability coverage if you damage someone else’s car, fence, mailbox or other property while you’re behind the wheel.
  • Collision coverage: While your liability coverage can pay toward fixing someone else’s car if you’re at fault in an accident and their liability coverage can pay toward fixing yours if they’re responsible, you may still require insurance to step in with paying for repairing or replacing your vehicle regardless of fault. That’s where collision coverage steps in.
  • Comprehensive coverage: Usually, comprehensive covers damage or loss to your vehicle not caused by an accident, or damage that occurs when the car is not moving. This includes theft, vandalism or a fallen tree branch that smashes your windshield. Comprehensive also covers you for hitting a deer.

The more coverage you add to your policy, the more you’ll likely need to pay. But you’ll also be protected against more risks, which means your car insurance claim might cover losses so you don’t have to.

When should I file a car insurance claim?

Generally, there are more cases when you should file an auto insurance claim rather than skip it. Here are a few key examples:

When you’ll save money

You should consider filing a car insurance claim whenever your out-of-pocket costs would extend past your deductible. Reminder: your deductible is the amount you’ll pay for certain auto insurance coverage types to kick in. For example, if you do serious damage to your car — say, you back into something large and cause $1,500 of damage. If you have a $500 deductible, you’d really be receiving $1,000 for your auto insurance claim. In that instance, filing a car insurance claim could help save you money.

When you caused an accident or damage to someone else’s car or property

If your accident caused damage to anything other than your own car, you might want to file a claim. If the damage is minor, it might seem like something you can work out with the other driver or property owner independently. However, it’s often safer to connect with your insurer and file a claim through the proper channels. Your car insurance company has claim agents who can work with the agents of the other person’s company to ensure that the rights and responsibilities of each party are taken into consideration.

When someone hit your car

If someone else hits your car, no matter who’s at fault, you should begin the claims process as soon as possible. If possible, gather as much information from the other driver as possible, including information on their vehicle and their insurance policy info. Get the contact information of any witnesses who are willing to give it and take photo and video evidence of the damage if you can. Keeping an accident checklist in your glove compartment can help prompt you if you’re shaken up by the incident.

When people were injured in an accident

If you’re in an accident with injuries, it’s even more important to file a claim as soon as possible. Your insurance company will need to have a full picture of any medical costs involved in the accident so it can properly determine the payout amount it will provide. Even if it appears that no one is hurt in the immediate aftermath, those involved may later discover that they require medical attention, which can make it risky to avoid filing a claim.

Is there ever a time I shouldn’t file an insurance claim?

Even though it can be beneficial to go through the insurance claim process for the financial and legal protection it provides, there are a few times you may consider skipping it:

When the damages are extremely minor

If you’re in a fender bender that leaves little damage to either car, you may not want to file a claim since it might increase your premium, no matter who is at fault. But be cautious here. If it’s truly a minor bump — say, you hit your brother’s car when backing out of your parents’ house and left a small dent in his bumper — you might be justified in skipping it. However, it can be difficult to reach an agreement with a stranger immediately. You might find that it’s easier to contact your insurer.

When you damaged your own car

If you damage your own car, you typically have a little more leeway in regard to filing a claim with your insurance company. Let’s say you’re in a one-car accident, perhaps you backed into a pole or sideswiped a cement barrier, and it results in your car having only minor damage. In these cases, you may be able to get the damage fixed for less than your deductible, so it may make more sense to pay for the damage yourself rather than make a potential premium-raising claim. If the damage is significant, though, you may want to consider contacting your insurer to get help paying for repairs.

How will an insurance claim impact my car insurance rates?

Even if you are not at fault in an accident, your cost of car insurance is likely to rise after you make an insurance claim. Why? Insurers are in the business of assessing risk and it’s possible that they may consider you a higher-risk driver once you are involved in an accident, regardless of the circumstances.

Data from Quadrant Information Services shows that drivers with at-fault accidents on their records pay an average of 23 percent more for full coverage policies than drivers with clean records. The surcharge for a minimum coverage policy is similar, about 20 percent more on average for an at-fault accident. If your insurer raises your car insurance rate to a price out of your budget, you may consider comparing quotes from other providers.

But this isn’t always the case. Many insurers offer accident forgiveness. What this means exactly varies from insurer to insurer, but in general, it means your rates won’t go up after your first at-fault accident. Some insurers charge extra for this option while others include it in the basic policy. It’s worth considering looking for an insurer with this option if you have a clean driving record for at least the last three years.

Frequently asked questions

    • The process of filing a claim varies from one insurer to the next, but in general, most insurance companies have a phone number you may call to start your claim. Others may offer an online claim form or may allow you to start a claim via a mobile app. No matter what route you take to make a car insurance claim, be sure to give the claims representative or your insurance agent all the requested information. They should walk you through the company’s claims process so you know exactly what to expect.
    • Not necessarily, provided you can get the necessary information (like proof of damages) to your insurance company. But getting a police report can help you in two ways when you’re figuring out how to file an insurance claim.

      First, the report gives you evidence of the accident. This can be especially helpful if the other driver was at fault and you need to prove it.

      Secondly, many states require that certain accidents be reported to law enforcement. Usually, you need to report the accident when the damages exceed a certain dollar amount or someone was injured. By getting the police report, you gain documentation that may be necessary otherwise.

    • Fault refers to the party who caused a car accident. In some accidents, fault is easier to assign than in others, but will typically be ‘officially’ determined by the police and/or insurance companies, although the drivers involved and other witnesses may also play a role.

      Fault can become a confusing term for a lot of people who live in no-fault states. No-fault in that instance does not actually refer to whether or not someone is responsible for causing the accident. Rather, it refers to a set of car insurance rules mandated by the state that require drivers to carry special insurance that kicks in for each driver and their passengers after an accident, regardless of who caused the accident. No-fault does not mean someone did not cause an accident, and the at-fault driver can still be held liable for damages beyond what everyone’s no-fault insurance covered.

    • Each state has a different statute of limitations when it comes to how long you’ve got to file a claim. The type of damage sustained and your insurance company’s claim protocols could also affect your timeframe. Typically, it’s best to file a claim as soon as possible so you can get the process started and receive your payout.

      If you’re unsure of what to do or when to file, reach out to your insurance provider. An agent should be able to explain your state’s regulations and the company’s claims process. Then, if you decide to file a claim, the agent can start the process right away.

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