Automobile Insurance Claims: A Brief Primer
When you see the word "Primer," what do you think of? Someone may say, "It reminds me of children's books." Another may say, "I think of paint." Actually, both answers are accurate. A primer is that which has to do with the most basic applications. For children, its learning ABC's and 123's and with paint, well, it's the base coat of paint upon which others are added.
What is an Automobile Insurance Claim?
In the most elementary definition, an insurance claim is simply a request for payment based on the terms of an insurance policy. For example, if you have collision coverage on your car and find yourself in an accident, you will submit a claim for payment to cover the cost of the repairs. When the company receives the claim, they will review it and compare it against what the policy covers before making payment to you. While this is the basic principle behind what a claim is, matters can often get extremely complicated.
Impact of Claims on Cost of Vehicle Insurance
In another article, we looked at the factors of underwriting and rating and how these two items impacted the cost of your automobile insurance premiums. It was pointed out that of all the many items that could have an impact on premium cost, by far the one aspect that was most influential was claims frequency of a particular group.
Yes, your personal claims history can certainly impact your individual premium cost, but group claim frequency will set the base from which individual premiums are built upon.
You ask, "Ok. What group do I fit into?" To answer, we cannot say that you are in just one group. Actually, you will be a member of several different groups. For example, the type of car you drive will categorize you with a group. Your age and marital status will further categorize you with other groups and so on.
Claims frequency, which measures how often an insured event occurs with a group relative to the number of policies within that group, will then heavily influence premium costs. If you share characteristics with high claims groups, you will be charged more for your insurance coverage.
All of the above sounds a bit negative as it alludes to more costly insurance coverage. On the other hand, the opposite side of the same discussion will show that people who share characteristics with low claims classes will be charged lower rates.
Don't Wait to Compare Car Insurance Coverages
Continuing with the thought of a "primer" or the elementary aspects of a claim, before you file a claim, you should know what your policy covers. Waiting until you have an accident is not the time to start reading about your coverages. Perform a comparison of your car insurance coverage's as these should be known before needing to file a claim.
So seriously, do you know what your automobile insurance policy covers? As stated elsewhere, keep in mind that the vehicle insurance policy you purchased is a legal contract. As such, you need to be familiar with its terms.
In fact, the first thing you should do after purchasing your policy is compare car insurance coverage's to ensure that all coverage's you thought you purchased are listed and listed for the amounts you requested. In addition, while the following should be obvious, you need to double check to ensure that all drivers are listed.
If you find errors you should contact your insurance agent immediately to get the errors resolved. Don't risk driving without reviewing your policy.
Responsibilities in Filing a Claim on Insurance for Car
If you have a claim, your insurance policy will outline your duties to the insurance company in the case of a loss but typically your responsibilities would include but not necessarily be limited to the following.
At the scene of an accident:
Make sure everyone in your car is OK
- Check the other car to see if they are OK
- Get the following information from the other driver: name, address, telephone number, license plate number, drivers license number, information about insurance for car
- Give the same information to the other driver
- Get the name and phone number of any witnesses
- Keep a disposable camera in your car and take accident pictures
- Contact the police to report your accident
- Contact your insurance company or its claims office as soon as possible
- Provide any information your insurance company requests and cooperate with them in settling the claim.
- Keep receipts and records of all expenses you incur as a result of the accident. Depending on the terms of your policy, your emergency medical expenses incurred as a result of an automobile accident may be covered under your policy.
- Immediately send to your insurance company any documents, such as a lawsuit, you may receive from others resulting from the accident.
Keep Detailed Claim Records
In a best case scenario, we would never have to worry about accidents and claims but that is not realistic. Accidents occur every day but we always hope they will not involve us. If you are involved in an accident, after all is finished and the claim is settled you have one very important step to take. You should keep detailed claim records. Take the time to make a special dedicated file folder to keep copies of all paper-work related to your accident. Depending on the complexity of your claim you may have a significant amount of paper.
Regardless of what you have, most CPA's recommend retaining this information for 7 years. File it with your tax records or other important papers. Be sure to seek professional advice if you have questions about records retention or other matters related to a claim.
Be Proactive - Get New Quotes for Car Insurance Annually
Being a proactive, responsible driver can help you avoid many situations that might otherwise result in a claim against your affordable car insurance coverage. Being a complacent driver can cost money. Make it your aim to review your coverage's on at least an annual basis and get new quotes to make sure you have the most affordable car insurance for your budget.
