Filing and Settling a Car Insurance Claim

After being involved in a collision, more headaches are not what you need.

After being involved in a collision, more headaches are not what you need. (image by silive.com)

Filing, navigating, and finally settling a car insurance claim can be a complex and disorienting process.  This simple guide will help keep you on track and give you a step-by-step system for managing your car insurance claim.

Decide Whether Or Not To Open A Claim

  • Choosing when to file a claim and when to pay out of pocket can be as simple as comparing the cost of repairs with your deductible, or it might involve a myriad of factors.  If the accident was your fault, take a close look at it.  If you’re the victim and you have Collision coverage, open a claim with BOTH your insurer and the other driver’s insurance right away.  Your insurer can always pay for the damage and get reimbursed later, without it affecting your rates.  If they’re brought in days or weeks after the accident occurred, they may have a hard time catching up or refuse to handle it at all, leaving you to deal with the other’s driver’s difficult insurer.

If You’re the Victim, Exchange Information and Get A Police Report

  • Exchange information with the other driver or drivers, passengers, and witnesses.
    • Name (full legal name)
    • Date of birth
    • Driver’s license number
    • License plate
    • Vehicle year, make, model, and color
    • Address
    • Phone number
    • Insurance company name, policy number, and phone number for insurer
  • You’ll need ALL of this information later if you need to file a lawsuit for the claim, so keep it in a safe place until the claim is fully settled and you’ve received your final payment.
  • No accident or claim is “too small” to warrant a police report.  Call the local police or 911 to report a traffic accident, and be clear whether or not it is an emergency.  If the police refuse to respond to the scene of the accident or take too long, file a police report at a later time with your local precinct, and an investigator should contact the other driver for a statement.  A police report will act as an official record of the circumstance, and is extremely valuable if you need to prove your case later on.

Take Photos At The Scene

  • Pretend you are working for a Crime Scene Investigation (CSI) Unit, and you need to document the entire situation with photos.  Take wide-angle photos of the whole accident scene, each vehicle involved, as well as close-ups of the damage.  A few blurry close-ups of a dented fender aren’t going to illustrate much later on, so make sure to get photos that show the whole area to document what happened.

Contact Your Insurer and/or the Other Driver’s Insurer

  • Most companies will offer multiple ways to file a claim, either online, by phone, or in person at an agent’s office.  In any case, you will be asked to give a recorded statement over the phone.
  • Have your information and any other driver’s information ready, as well as any police report information.
  • Give a statement, but be brief with your answers.  Just as in speaking with the police, anything you say can and may be held against you later, so don’t tell your insurance adjuster or the other insurance company that you were eating fast food and talking on your cell phone when you crashed your car.  You can always go into more detail later on, so just give them enough information to start the claim.


Keep All Claim Information and Documents In One Place

  • Staying organized is your best bet to keeping your claim on track.  Start a folder or a binder, or draft a document on your computer to keep track of everything.  Tag or organize any emails you get from the insurance company, too.
  • Obtain contact info for insurance adjusters.  These are the people who will be handling your claim, investigating the damage, issuing payment for car repairs, and/or negotiating a final settlement for any injuries you may have.
  • Get claim numbers, phone numbers for adjusters, supervisors, and claims handlers soon after you open the claim.
  • Ask about the chain of command.  Some insurance companies delegate different duties to different people,  so make sure you ask who has what responsibility for your claim.  This will keep you from repeating your story to different adjusters and running around in circles.


Keep All Communication In Writing

  • Ask your adjuster or adjusters to email you with every conversation, and each commitment, guarantee, or promise they make.  This will prevent them from going back on their word later, or shorting you on the cost of a repair when they said “We’ll pay for everything” on day one.
  • This will save you time and stress otherwise spent discussing or arguing about a claim over the phone.  Some insurance adjusters will prey on stressed-out customers and pressure them into accepting lesser settlements, so keeping your head clear will help you manage the claim.


Choose A Repair Shop With A Warranty

  • Some insurers will recommend repair shops, however it might be best to choose your own shop.  If an insurer recommends a shop, it might be because the shop offers cheap labor and discounts on parts, which is good for the insurer but not so good for you and your car.
  • Make sure your shop of choice offers a warranty. Some insurers will offer a warranty at any one of their “program” or “direct repair” shops, but it may be a very limited or vague warranty, so ask to read it in advance.
  • If you have the time, get multiple estimates from different shops, and choose the shop you feel most comfortable with.  A knowledgeable and friendly staff will reflect good management and sound business practices, so go with a shop that offers friendly service at every step from estimate to completed repair.


If You’re Injured, See A Doctor Right Away

  • Even if you don’t have much time in your schedule to visit a doctor on a regular basis, schedule a checkup as soon as possible and follow up with a week or two.
  • Having a documented record of your injuries after an accident will be crucial to represent your claim later.  If you wait a month or two to get your straining neck or back examined, the insurer might deny the claim, and you might have difficulty finding an attorney willing to take the case without good evidence.


Navigating A Final Settlement

  • Most claims limited to property damage only will be simple: once your car or property is fixed, you’re good to go, and just make sure the shop warranties the work.
  • Make sure to keep track of other property damaged due to the accident, like coffee spilled on a nice pair of pants or other belongings.
  • For injury claims, the territory can be slightly more complex.
  • First and foremost, consult with a couple different attorneys.  Most attorneys will offer free consultations over the phone or in person, and will give you an idea of whether your claim is worth pursuing or if you should simply settle on your own. Be upfront and honest with them about your claim and your injuries, because as attorneys they are bound to silence and privacy about it.  Ask them questions like:
    • How long will a claim like this take to settle?
    • If I pursue it, can you give me a range on what I can expect from a settlement?
    • What sort of time commitment will be required from me?
    • What sort of expenses will I incur by hiring you to represent me?
    • What are the risks if we “lose”?
    • What are your fees from a settlement?
    • Do you think I should just settle this on my own?
  • If you choose to settle an injury claim on your own, follow these steps:
    • Keep track of your medical injuries, and request your doctor give you notes on your recovery process and any long-term ailments you may have as a result.
    • Start a journal and write in it daily to keep track of your pain, any limit the injuries have imposed on your ability to work or perform daily chores, or even if your injuries have prevented you from spending quality time with friends or family.
    • If you can’t play with your children because your back hurts, ask yourself, “How much money would you have to pay me to refuse to play with my kids, even if I was healthy?”  Do this for every type of activity that you’re prevented from doing.
    • Start a spreadsheet or list of all expenses, including small things like aspirin, bandages, ice packs, or massage therapy. Include dollar amounts for activities you can no longer perform due to the injury or injuries.
    • When you have reached full recovery and have returned to your pre-accident state of health, or if you are at a point where you feel you don’t need to pursue any more medical treatment and are ready to settle, ask the adjuster to make you an offer in writing for a settlement.  Don’t tell them what you want just yet, instead ask them to make you an offer to start the negotiations.
    • The amount of their offer will likely represent anywhere from 10% to 50% of what the adjuster believes the claim is really worth.  If they offer you $500 to start, you might be able to demand and negotiate to a final settlement of $1,000 or even $5,000.
    • Prepare a written counteroffer. Once again, don’t give away all the details of your claim all at once.  Make a thorough demand letter and send it via email and via regular mail or fax, but leave some items off the table until the next round of negotiations.
    • For any counteroffers you make, aim higher than your desired final settlement amount.  They’ll negotiate with you, so if you want $2,000, start with a demand of $5,000 or $6,000.  Don’t make a ridiculous demand of $20,000 for a small injury claim, but keep in mind they’ll be negotiating and you’ll need to give up some ground to reach a final settlement.
    • When the adjuster responds to your demand, prepare another written response.  Add in some additional information, evidence, receipts, photos, or other details to support your demand.  Send them copies, and keep originals of everything.
  • Escalate to their manager if necessary.
    • If you’re not getting the results you want, ask to speak with the adjuster’s manager.  Bring them up to speed, ask them to review the documents you’ve sent to the adjuster, and demand a better settlement amount.
  • After negotiations, if they refuse to settle at a satisfactory amount, remind them that you can get an attorney and you’re prepared to do so.  This might cause them to produce a better settlement offer.
  • If your claim is only worth about $5,000 or less, you may be able to file a lawsuit in small-claims court.
    • Typically this process costs less than $100 to file, and typically you can get a court date within a couple of months.  Check with your local government court system to ask about how this is done.  The simple act of filing a lawsuit in small claims court may cause the insurer to offer up a better settlement right away.
    • If you need to go to small claims court, be prepared. If you’ve followed this guide, just present your argument to the judge the same way you presented your demand to the insurance adjuster, and bring all evidence and information necessary.
  • Other options to leverage a settlement include:
  • If you want to accept their offer: Ask them to send you a “settlement packet”.  This should include a check for the agreed settlement amount, a release-of-liability and hold-harmless agreement that will close the claim, and any other legal agreements necessary.
    • READ THE SETTLEMENT AGREEMENT! It should display the amount of the agreed settlement in the document, and if it does not, contact the adjuster to ask why.  Make sure you’re not signing off on an amount less than the one you agreed to with the adjuster.


By following this guide you should have success in opening, navigating, and negotiating a final settlement for any insurance claim.  


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