July 22, 2019

What Is a Claim? The Auto Insurance Definition Most People Get Wrong

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You’ve just had a collision with another vehicle. It looks like the damage will cost quite a bit of money to fix. Thankfully, you have auto insurance that covers damage from collisions, so you can file a claim to pay for the repairs.

If you have ever experienced a situation like this, then you already know what a claim is. A claim is a formal request asking for your auto insurance company to pay for repairs, replacements, car rentals, and other services included in your policy.

Unfortunately, some people don’t understand the precise nature of a claim. That misunderstanding can lead to frustration and confusion.

How Auto Insurance Claims Work

The auto claims process varies somewhat from company to company. Typically, you can expect the process to include:

  • Filling out a police report that includes details of the collision and damage.
  • Contacting your auto insurance company to tell them about the collision.
  • Having an approved mechanic inspect your vehicle and provide a repairs quote.
  • Waiting for your auto insurance company to process paperwork and determine how much money it needs to give you for repairs.

You can make the auto insurance claims process easier by taking pictures of your car’s damage, damage done to other vehicles, and the location where the collision took place.

Also, make sure that you don’t admit fault at the scene of the collision. The insurance companies can determine whether someone’s responsible for the accident. The less you say, the more protection you have. If you tell the other driver that you made a mistake, then it could come back to haunt you – even if you realize afterwards that you didn’t do anything wrong.

You should also remember that your insurance company probably accepts a variety of claims. Depending on your policy, you may have coverage for:

  • Repairs
  • Medical expenses
  • Vehicle replacement

Who Does (And Doesn’t) Need to File a Claim

Some drivers think that they need to file claims every time their vehicles get damaged. That is not the case!

You should file a claim if:

  • Another driver causes significant damage to your vehicle.
  • You or someone else gets hurt during a collision.
  • You cause extensive damage to another person’s property.
  • Your vehicle gets damaged by hail, vandalism, floods, explosions, and similar events.

Keep in mind that your policy may not cover all of the scenarios listed above. For example, you only need to file a claim for damage caused by hail when you have a comprehensive policy. Similarly, you only need to file a claim for damaging someone else’s property when you carry property damage liability insurance.

If you do not have an insurance policy that covers your situation, then you do not need to submit a claim. Doing so will only force your insurance company to do pointless paperwork before rejecting your claim.

Other times that you may not need to file a claim include:

  • When you caused the damage yourself.
  • When the cost of repairs doesn’t exceed your deductible.
  • When you have a collision in someone else’s car.

Plenty of people get confused by deductibles. Your deductible is the amount of money that you have to spend before the insurance company will start paying for repairs. Increasing your deductible usually means that you pay a lower rate. After an accident, though, you need to pay more money out of pocket before the insurance company has any responsibility.

Let’s say repairing your car will cost $350. If you have a $500 deductible, then you shouldn’t file a claim. In this situation, you will end up paying for the repairs out of pocket.

How the Claims Process Has Evolved

The auto insurance claims process has changed a lot over the last couple of decades.

Before smartphones became popular, policyholders had to file claims by mail or telephone. Often, you would call the insurance company to ask for the paperwork needed to file a claim. The paperwork might come to you through USPS or a private mail service, depending on your insurance provider’s preference.

After receiving the paperwork, you would complete all of the forms and send the package back to your insurance company for processing. The claims process took so long that you might not get an approval or denial for a week or longer.

Today, most auto insurance companies have smartphone apps that let you file claims instantly. You don’t even need to call your provider. You just open the app, take a few pictures, answer some questions, and submit the claim electronically.

If your claim doesn’t get approved, then you might need to use paper documents to ask the company to take a closer look. For the most part, though, claims get settled and paid within days.

Find an Auto Insurance Company With a Fast Claims Process

Finding a reliable auto insurance company makes it easier for you to file claims and get the money you need to repair your car. Autoinsurance.com gives you a quick way to compare auto insurance quotes so you can choose an affordable option that works well for other consumers.

Find an auto insurance policy that meets your needs today by comparing offers on autoinsurance.com.