How Does Insurance Work When You've Been in a Car Accident?
If you have been in a car accident, once you report it to your auto insurance company, your insurance company will take over the process. At the time of the accident, you will want to take pictures of the accident if possible, and get the other driver's insurance and contact information.
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Process
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Generally speaking, one driver will be declared to be at fault in the accident. The insurance company of the driver who was found to be at fault will be take care of the bill. Once the insurance company has received all the necessary information, it will want to look at the vehicle. This will require that a claims adjuster look at the car and the details of the accident, and then she will determine how much money in damages need to be paid. The value of the car will have the depreciation subtracted from it (unless you have replacement value insurance).
Determining Payout
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The car insurance company will also determine what the average cost is to repair the damage. The insurer will not pay more than the average, and that will be after two or three estimates are obtained. Once the auto repair shop is selected and the work completed, then the check can be issued. The deductible amount has to be paid first by the insured driver, and then the insurance company will pay the balance. The insurance company will only pay up to the ceiling amount, which is stated in the policy.
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Types of Coverage
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Car insurance only covers for specific events that are mentioned in the policy. There will be some exclusions, and your car will not be covered if those particular events occur. Collision insurance covers your vehicle when a collision is involved. Comprehensive coverage pays for those events not related to a collision. If your car is stolen, for instance, and you do not have comprehensive coverage, there will be no money paid toward getting another car.
Gap Insurance
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When you buy a new car, you will be offered what is called gap insurance. This insurance provides protection for the first few months when the depreciation has devalued the car to less than what you owe on the car. If your car should be stolen or totaled during this period, the insurance company will only pay the actual value, so you will still owe money. Gap insurance will cover that amount.
Warning
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If you have been involved in a car accident and were injured, the insurance company will attempt to close the case with a car accident insurance settlement. Up to 95 percent of claims close this way. You will be asked to sign a document stating that you cannot sue for more money later--no matter what happens. The document is called a Release and Waiver, and you should consult an attorney before signing this document. Note that signing the document will be necessary for you to receive your money.
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References
- Photo Credit car image by Mladenov from Fotolia.com
