How do auto insurance claims work?

If you were to ask an auto insurance company, “How do insurance claims work?” you would most likely receive this answer: When you request compensation for a loss from your insurance company, the company will review your request. After investigating it, the company will either pay out your claim or deny it.

That’s a very succinct summary of the claim process. Let’s take a more detailed look at the steps of filing a claim.

When you’ve suffered a loss, whether it be the result of a tree branch falling on your car or a vehicle break-in, you should reach out to your insurance company. Sometimes you’ll need to reach out right away or your claim won’t be covered, but the time you have to alert your insurance company can vary from state to state. If you’re not sure what the rules are where you live, take a look at this chart here:

Alerting your insurance company of a loss is the first step when filing a claim.

You’ll need to be able to accurately describe what happened to your insurance company, and you may be given the phone number and name of the claims adjuster who will be working with you throughout this process so make sure you have a pen and paper nearby when you make you initial call.

Once you’ve described the nature of your loss to the insurance company, that’s when the real legwork begins.

Officially filing a claim with your insurance company may require you to fill out some forms or even give a statement regarding your loss. While it may seem aggravating, this is a vital step as it helps your insurance company double-check facts and verify that your policy covers the loss you suffered.

If you were able to take pictures at the time the loss occurred, your insurance company will most likely ask you to send those in. Essentially, when you experience a loss, be sure to take detailed notes and photos so you have plenty of evidence to provide to your insurance company.

At this juncture, your insurance company will call in an adjuster. The adjuster may not only assess the damages but  could also interview any relevant witnesses. So if you were in an accident, be sure to ask anyone present for their contact information so you can share it with the adjuster.

Now, if your vehicle is in a mechanic’s shop, the insurance company may refrain from sending out an adjuster. The company may simply reach out to the mechanic to inquire about the extent of the damages to your car.

After the insurance company has decided to pay your claim, you’ll need to pay your deductible — if you have one that is. Some insurance companies offer their drivers a $0 deductible, and while the prospect of paying nothing to file a claim can be tempting, you must remember that your rates and your deductibles have an inverse relationship.

The lower your deductible, the higher your rates. Because of this, most drivers have their collision and comprehensive deductible set at $500.

Now, if your vehicle is considered to be totaled, your insurance company will typically subtract your deductible from the total payout you receive. You can expect to receive your payout in the form of a check. If you want to find some of the best auto insurance companies that file claims quickly you can read free company reviews online.

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Is it always worth filing a claim?

When it comes to auto insurance rates, how do insurance claims work against them?

Well, if your car has been damaged, you should get an estimate from a mechanic before you decide to file a claim because when you file a claim you run the risk of negatively affecting your rates. Below you can see a helpful chart that can help you decide if it is worth filing a claim or not.

Another good thing to consider your car’s total damage comparison to your deductible. If your deductible is set at $500 and the total cost to repair your vehicle is only $300, you shouldn’t bother filing a claim. Remembering these helpful tips will help you learn how to avoid an increase in your auto insurance rates.