Having a car accident, regardless of how much damage, can be an emotionally stressful event. And once the stress has subsided, many people quickly begin to ask themselves questions about what to do with regards to their insurance claim.
How your claim is processed will depend on what insurance company you have. Some work directly with body shops, while others will simply reimburse you after the fact.
- Pre-approved shops: For pre-approved shops, insurance companies have contracts in place with local body shops. All you need to do is bring your car in, and the body shop will work with the insurance company to figure out what repairs you need and to settle the bill.
- Insurance company estimates: Other insurance companies don’t take care of the repairs directly but do write their own estimates. You’ll need to meet up with an insurance adjuster or go to the insurance company’s office to get an estimate. You’ll then be approved for work up to that amount.
- Estimate shopping: In some cases, you may be responsible for finding a few shops and getting estimates. Your insurance company will then review the estimates to see if they’re reasonable. They’ll usually approve you for an estimated amount that’s in the lower to middle range of what you found. It’s then on you to decide which shop to use.
A Total Loss
If your car was seriously damaged, the insurance company might decide to “total” your car instead of repairing it. Totaling a car means that the cost to repair your car is more than a certain percent, (70% is quite common,) of the value of your car before the accident occurred. The exact amount depends on your insurance company as well as what was damaged. When your car is “totaled,” your claim would be for the pre-accident value of your vehicle less your deductible.
New Car Replacement
If you’ve just bought a new car, the value of your car drops, the second you drove your car off the lot. That is simply due to the fact that it is titled, and is considered a “used” car, regardless of condition or miles.
Imagine for a moment what that means if you have an accident with your “new” vehicle and it was totaled. Your claim would be for the depreciated value of your vehicle. To prevent this from happening, many insurance companies have introduced a new, optional cover referred to as “New Car Replacement” coverage.
What it means is that if your vehicle is less than a certain age (12-months perhaps,) and had less than a certain number of miles (12,000 perhaps,) you would receive a check for a new car rather than the depreciated value of your vehicle. This coverage runs for a set amount of time or miles after you buy a new car, and then is no longer available.
Similar to New Car Replacement coverage, if you owe more than your car is worth on your loan or lease, you have to pay off the difference. Once your car is totaled, the balance becomes due immediately rather than on your original payment plan.
To avoid having to pay thousands of dollars out of pocket, you can use GAP coverage. With GAP coverage, your insurance company will pay off your loan or lease regardless of your car’s current value.
We’re Here For You
If you want to be fully reimbursed for an accident, it’s important to have an insurance agent who will work for you rather than trying to nickel and dime you to increase the insurance company’s profits. At Imes Insurance Associates, we pride ourselves on strong customer service, transparency and treating our customers fairly and honestly. We want you to receive full reimbursement after an accident! To learn more about the claims process or to discuss your coverage needs, contact our office now.