Driving on California’s highways can be a risky proposition. Whenever you’re in a vehicle, there’s a chance you’ll be involved in a traffic accident. Whether it’s a small fender bender or a major injury accident, knowing in advance what to do can help you avoid costly mistakes. This guide discusses what to do after an accident and what to expect when you file an automobile insurance claim with your insurance company. For your convenience, an accident checklist is contained herein which can be kept in your vehicle for future reference.
When purchasing insurance, carefully review the application before signing it to be certain that the coverages, policy limits, and deductibles suit your needs. After you receive the policy, review the declaration page. It contains important information on who is covered, the vehicles insured, as well as the coverage limits and deductibles. Make sure the information is correct and the coverage is what you purchased. If changes are needed, send your request to your agent and/or insurance company in writing and keep a copy. Use “certified mail/return receipt requested” to verify receipt of your letter.
Become familiar with your automobile insurance policy before it’s needed. Read the policy thoroughly so you know what is covered and what is excluded.
Some of the Most Frequently Asked Questions About Automobile Insurance Claims are Discussed Below:
Q. What Should I Do at the Scene of an Accident?
A. Immediately stop at the scene.
Q. What Happens After I File the Claim With My Insurance Company?
A. Your insurance company will contact you for additional information, such as a detailed account of the facts, or a written or recorded statement. An examination under oath may be requested. As part of the investigation, other drivers and witnesses may be contacted. If you have medical payments or an uninsured motorist claim, you must provide documentation of your injuries, medical expenses, lost wages, et cetera.
Q. What Should I Do if the Insurance Company Does Not Contact Me?
A. A claim representative should contact you within a reasonable period of time after you report the loss. However under certain circumstances the insurance company can take up to 15 days to contact you. If you do not hear from anyone, call your agent or insurance company for assistance. If they are not responsive, or you believe there is an unreasonable delay in settling your claim, contact the Department of Insurance.
Q. How Does the Insurance Company Evaluate Vehicle Damage?
A. A qualified adjuster or appraiser usually inspects the vehicle damage. The adjuster or appraiser then writes an estimate based on the initial inspection. If further damage is found during the repair process, the shop will contact the insurer to get the additional cost of repairs approved. Keep in mind the insurer may send out an adjuster to re-inspect the additional damages. If the damage is relatively minor, the company may instead ask you to submit competitive repair estimates. Remember, it is your responsibility to sign and authorize the shop to repair your vehicle once you are satisfied with the final estimate and repair facility.
Q. What Will the Company Pay on a Physical Damage Claim Under a Standard Auto Policy?
A. Generally, the company will pay the lesser of
Q. What Is Actual Cash Value (ACV)?
A. Actual Cash Value – Unless otherwise defined in the policy, actual cash value in California means fair market value. The fair market value of an item is the dollar amount that a knowledgeable buyer (under no unusual pressure) is willing to pay, and a knowledgeable seller (under no unusual pressure) is willing to accept.
Q. What Is an Appraisal Provision?
A. Most standard policies contain an appraisal provision, which can be helpful in the event that you do not agree with your company on the amount of loss. Read your policy to see if it contains one. Under this provision, either of you can demand an appraisal. Each party selects a competent appraiser. The appraisers then select an umpire. If the appraisers cannot agree on the amount of loss, their differences are submitted to the umpire. An amount that any two agree upon is binding. Each party pays its appraiser; the umpire fee is shared.
Q. How Is the Check or Draft Prepared?
A. The check may be made payable to the insured and any lienholder, such as a bank or finance company. If the vehicle is repaired, the company may also include the repair facility as a payee.
Q. Who Is Responsible for the Balance of a Car Loan?
A. The borrower is responsible for the balance of the loan, even if the vehicle is stolen or damaged beyond repair. If your claim payment is less than the loan balance, the lender will expect you to pay the difference. Coverage commonly referred to as “gap” insurance can usually be purchased to protect against this situation.
Q. Will the Company Pay for a Rental Car While Mine is Being Repaired?
A. Yes, if you have purchased rental vehicle coverage. Review your policy before you rent a vehicle. Although policy limits vary, the company pays up to a specified amount per day for a specified number of days. The coverage ends when your vehicle is repaired, the loss is paid or after the specified period, whichever comes first. If your vehicle is stolen, the policy may automatically provide transportation expenses. Again, review your policy to be sure. This type of coverage usually begins 48 hours after the theft and ends when your vehicle is recovered, the loss is paid or after a specified period, whichever comes first.
Q. What Is a Collision Damage Waiver and Will the Company Pay These Charges for the Rental Vehicle?
A. The terms of the rental agreement make the customer responsible for collision damage while he or she has possession of the vehicle. Additionally, rental companies insure themselves for damage to the vehicle caused by collision. For an additional fee, the rental company will waive all or a portion of the customer’s obligation to pay repair costs for damage to the vehicle caused by collision. Both the amount of the fee and the language of the waiver vary. Coverage for collision damage to the rental car under your personal automobile policy depends upon the policy language. Read your policy carefully. Ask your agent or company before you rent a vehicle.
Q. What Is the Salvage Value?
A. This is the remaining value of your damaged vehicle if your vehicle is determined to be a total loss. It is usually determined through bids from salvage buyers. The company may sell the salvage to the highest bidder. However, it is not obligated to do so. If you decide to keep the damaged vehicle, the highest salvage bid may be deducted from your settlement. In effect, you are “buying back” your vehicle for the salvage value. If you retain possession of the salvaged vehicle, it is your responsibility to file a salvage certificate with the Department of Motor Vehicles.
Q. What Is Subrogation?
A. Subrogation is the right of the insurance company to recover from a third party the amount of damages it paid to you. For example, if another party is at fault in an accident that damages your car, and you have a collision claim, your company will ask the other party to reimburse the money it paid on your claim. The policy requires your cooperation with the company’s subrogation efforts. Also, you cannot do anything that jeopardizes the company’s right of recovery. For example, you cannot sign an agreement releasing the other party in exchange for payment of your deductible.
Q. Is the Company Required to Help Me Recover My Deductible?
A. Yes and no. The insurance company must advise you as to whether or not they intend to pursue subrogation. If the company pursues subrogation, they are required to include your deductible as a part of the process. However, if the company does not pursue subrogation they are required to advise you of that fact so that you may pursue your deductible on your own. If their efforts are successful, in whole or in part, the company will reimburse you in accordance with the recovery. For example, if 100 percent of the paid claim is recovered, you will receive 100 percent of your deductible; if the recovery is 65 percent, you will receive 65 percent of your deductible. Any expenses or fees (e.g., legal fees, incurred by the company in its recovery efforts) will be apportioned between the company and you, if recovery is made. However, if you choose not to have the company include your deductible in its efforts, you can seek recovery directly from the other party on your own. But before you do, discuss the matter with your company to avoid jeopardizing its recovery.
Q. Is the Car Covered Outside of California?
A. Most policies provide coverage in other states, U.S. territories and possessions, and Canada. As is the case in California, many other states and territories have enacted financial responsibility laws requiring drivers to carry a specified amount of automobile insurance to cover losses resulting from ownership or operation of a motor vehicle. If the financial responsibility requipments where you are traveling are higher than your policy limits, your company will meet the higher requirements. Most policies do not provide coverage in Mexico, so if you plan to drive your car there, it’s wise to buy that coverage separately. Check your out-of-state coverage before you travel.
California’s financial responsibility law is set forth commencing with Section 16020 of the California Vehicle Code. Among other things, it requires all drivers to be able to pay damages resulting from ownership or operation of a motor vehicle. Drivers must show ability to pay damages (called financial responsibility) of at least $15,000 for each person injured or killed in an accident, of at least $30,000 for injury/death to two or more persons in one accident, and of at least $5,000 for property damage from any one accident. If you are cited by a peace officer for any moving violation, or are involved in an accident, you may be asked for written proof of financial responsibility. This can be done by recording the name of your insurance company and policy number on the vehicle registration card issued by DMV. This proof of insurance should be kept in the vehicle or in the driver’s wallet or purse so it will be available when driving any car. For further information, contact the CA Department of Motor Vehicles.
Q. What Should Be Done if a Lawsuit (Summons and Complaint) Arises Out of an Accident?
A. Notify your agent and insurance company immediately. Keep a copy for yourself and mail or deliver the original documents to your company. Do not give statements or discuss the accident with anyone except a verified representative of your company. If the lawsuit arises out of a covered loss, your company will provide legal defense.
Q. Is a Newly Acquired Vehicle Covered?
A. Most policies provide 30 days automatic coverage for a vehicle that replaces a vehicle already on your policy. The coverage normally is the same coverage you had on your previous vehicle. Notify your broker-agent as soon as possible of any replacement vehicle. If you wish additional coverage, there is usually a requirement that you notify your agent or your company within a designated time period.
Most policies also provide automatic coverage for a newly acquired vehicle that is an addition to the vehicles you already have on your policy. There are usually specific conditions that must be met. For example, the purchased vehicle must be reported to your agent or company within a designated time period (e.g., 30 days) or there may be a requirement that in order for coverage to automatically apply, all of your other owned vehicles must be insured with the company.
In general, insurance companies are required to do the following:
The above represents a paraphrased brief overview of some of the Fair Claims Settlement Practices Regulations effective 5/10/97. View a complete copy of the California Code of Regulations.
Automobile insurance fraud in California historically has taken several forms. The most common fraud schemes involve automobile property and automobile accidents.
Automobile Property- This type of fraud most often involves dishonest auto body and repair shops and/or insureds who may employ a variety of illegal or questionable techniques including:
It is always important for the consumer to review carefully all paper work from auto body and repair shops in order to protect against potential fraud. Also, consumers should be cautious of any auto body or repair facility that makes referrals to medical or legal offices. This practice may be an indicator of “capping.” Capping (a felony in California is the illegal referral of clients to legal offices for a fee.
Automobile Accidents – Automobile fraud often involves organized auto accident rings. Staged auto accidents, which are not accidents at all, follow several basic schemes including:
If you have been in an auto accident, be cautious of any unsolicited referral to a body shop, law office or medical office. Organized accident rings and cappers actively solicit others in the community to participate in the creation of accidents. Often these accidents only exist on paper (referred to as paper accidents), and no innocent parties are involved. Paper accidents have gained in popularity among fraud perpetrators, as they are less dangerous from a bodily injury standpoint, and there is less likelihood of police involvement.
Under California Insurance Code §758.5 an insurance company cannot require that an automobile be repaired at a specific repair shop. However, an insurance company can recommend that an automobile be repaired at a specific repair shop under the following conditions outlined by law:
If the vehicle is repaired in a shop chosen by the consumer, then the insurance company must pay the reasonable costs to repair the vehicle in a workmanlike manner. The insurance company is prohibited from limiting or discounting reasonable repair costs based on charges that would have occurred if the vehicle had been repaired at the company’s recommended repair shop. Also, the insurance company must stand behind the repairs of the recommended shop if the vehicle is not repaired properly.
Ourfalian & Ourfalian has successfully represented thousands of individuals and small businesses throughout the San Fernando Valley and Southern California over the last four decades. Our experienced attorneys focus on civil litigation which includes but is not limited to helping injury victims get just compensation after serious accidents. There is a distinct culture at Ourfalian & Ourfalian that is not easy to characterize but is felt everyday by the firm’s employees and clientele. Contact our Glendale Personal Injury & Civil Litigation law practice today to schedule a free initial consultation.