UPDATED: Aug 29, 2020
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The auto insurance claims process is relatively straightforward.
But it still pays off to have a basic understanding of the process, specifically the different types of claims, well before you find yourself in an accident.
Here are the main types of auto insurance claims explained.
What Is an Auto Insurance Claim?
A claim is simply where you ask your auto insurance company to compensate you in a car accident.
This compensation is typically for damages to your vehicle, including a total loss, as well as injuries you might have sustained. It can also cover property damages that occurred during the accident.
Another situation is where you contact your auto insurance company to act on your behalf when an auto insurance claim is made against you. Enter your zip code below to view companies that have cheap auto insurance rates. Secured with SHA-256 Encryption
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Main Types of Auto Insurance Claims
Auto insurance claims can be broken down in many ways.
Although there are certainly a number of sub-types, these claims can typically be broken down into three major categories.
Here are the three main types of auto insurance claims:
1. Total Loss Claims
According to DMV.org, your vehicle is deemed a total loss when it costs more to repair it than its remaining value.
Many states also have limits related to the value of repairs. If your vehicle requires repairs that go over this limit, your claim will be deemed a total loss.
The same goes for a car that is lost or stolen. If the vehicle is unable to be recovered, it’s also deemed a total loss.
Your insurance provider must follow certain statewide rules and regulations regarding total loss claims, although they can tweak the specific rules to their preferences.
Fair market value is assigned to your vehicle, in pre-accident condition, to gauge the amount of money you’ll receive as compensation for your claim.
2. Bodily Injury Claims
AllLaw states that a bodily injury claim covers a wide range of scenarios.
The most common is if you cause, and are deemed at fault, for an accident that injured another person.
Your bodily injury auto insurance covers their claim against you. It’s designed to help pay for their emergency, hospital, and medical expenses.
Bodily injury auto insurance sometimes even covers the injured person’s expenses if they’re injured too badly to go back to work or otherwise continue to receive their normal income.
Remember that your own bodily injury coverage doesn’t cover you (other than potential legal fees) – it’s to protect you by helping pay for an injured person’s expenses in an accident you caused.
Flip this situation around to one where you get injured in a car accident that’s the fault of someone else.
In this situation, it’s you that needs to file a bodily injury claim against them. This claim is with their auto insurance provider.
Their bodily injury auto insurance coverage will then help pay for your emergency, hospital, medical, and related bills related to the accident.
Bodily injury coverage has a predetermined coverage limit, set by the auto insurance company ahead of time.
Most states now require drivers to carry bodily injury coverage.
3. Property Damage Claims
Car accidents don’t just cause damage to other vehicles on the road.
They also often cause damage to surrounding property, including mailboxes, homes, parked cars, lawns, and more.
According to The Balance, property damage claim is designed to help cover these damages to property.
This type of auto insurance coverage/claim works two ways. It helps cover any damages you cause in a car accident. And it also helps protect you if your property is damaged in an accident you’re not even involved in.
The at-fault driver’s auto insurance, even in no-fault auto insurance states, pays for the property damage claim.
How to File an Auto Insurance Claim
Many people are unfamiliar with how to file an auto insurance claim in the first place.
The process starts with contacting the police. Smart About Money suggests filing an initial police report immediately after the accident.
The next step is to collect your own information about the accident and to contact your own auto insurance company with these details.
Your auto insurance representative will help you file a claim, whether it’s one of the three described above or a different one, with the company.
A claims adjuster will then look at the accident, talk to any other auto insurance companies involved as well as third-party people, to get a good overview of the accident.
It’s the claim adjuster’s job to decide on the amount of compensation provided for the claim and how the claim is handled.
As long as your vehicle hasn’t been deemed a total loss, you will now work out the details regarding repairing it to get it back into roadworthy condition.
Your auto insurance company is on your side.
Many people forget this in the heat of the claims process, but they’re your advocate and they’re working for you.
Even if you’re tempted to handle the claim yourself or pay for the other person’s damages out of pocket, contact your auto insurance representative instead.
What might seem like a good idea at first, can quickly turn into a financial and legal nightmare due to the complexities of the auto insurance claims process.
It’s best to trust in the process – and your auto insurance provider – to handle your claim and any claims filed against you.
This is just one reason why it’s so important to select your auto insurance coverage from a provider you can trust in the event you’re involved in an auto insurance claim.