Q: The insurance company wants me to use a certain repair shop. Do I have to?
A: No, not unless you are filing a 1st party claim and your policy states that the insurance company can choose the repair shop. Otherwise, you can use whatever shop you want. However, if the repair shop you choose costs more than the one the insurance company is recommending, you may have to pay the difference in price.
Q: What are after-market parts and do I have to accept them when my car is repaired?
A: After-market or non-OEM (non-Original Equipment Manufacturer) parts can be thought of as generic parts made by a different manufacturer than the one that made your car. You do not have to accept non-OEM parts when your car is repaired, but you may have to pay the extra cost for OEM parts if you request them. In either case, your vehicle may suffer diminished value. Some states, like Georgia, require that if a repair estimate is based on the use of non-OEM parts, the estimate must have a disclosure stating that fact. Also in Georgia, if non-OEM parts are used in the repair, they must be clearly labeled.
Q: I was in a wreck and my car cannot be driven right now. Does the insurance company have to pay for a rental car?
A: It depends. If you're making a claim on your own policy (a 1st party claim) and you don't have rental car coverage, the company doesn't have to pay for one. (Note: rental car coverage is an optional coverage that you can choose to include in your policy and which costs extra.) If you're filing a 3rd party claim (a claim with another driver's insurance company), you're entitled to a rental car while yours is in the shop or until the company decides to declare it a total loss. Once the company "totals" your car, it no longer has to pay for the rental.
Q: What if the insurance company wants to total my car but I want it repaired?
A: The insurance company is required to "make you whole" by compensating you for your loss. They can do that by:
It is the insurance company's choice which of these options they select. However, depending on the circumstances and the difference in cost, a consumer-friendly insurer might be willing to consider your request to repair the car if you can make a convincing case. If not, your only choice would be to buy the totaled car back from the insurance company -- this basically means you get less money from the company for your claim because the company:
It is important to remember that once the insurer totals your car, depending on the laws in your state, the car may have to be declared a salvage motor vehicle. Some states, like Georgia, require that when a car is declared a salvage motor vehicle, the original title must be turned in and replaced with a salvage motor vehicle title. In addition, the car cannot be driven until it has passed an inspection, which the owner has to pay for. A final note on salvage motor vehicles: even after they are repaired, they may be very difficult to insure or resell.
Q: What if the insurance company totals my car but their settlement isn't enough to pay off my loan?
A: Because cars depreciate quickly and the payout when your car is totaled is based on its value just before the accident, this kind of situation does occur, and it can leave you in a bind. Not only are you in need of new transportation, but you're left with a bill for something you don't even own any more. There's not much you can do about it after it happens. However, depending on your financial situation and the size of the loan on your car, gap coverage may be an option you want to add to your policy when you purchase the car. Gap coverage is meant for situations just like this and will pay the balance of your loan if your car is totaled and the claim settlement isn't enough to do it. Remember, the insurance company is only obligated to pay the fair market value, which may be considerably less than what the car is worth to you.
Q: How long does it take to settle a liability claim?
A: Unfortunately, there is not an easy answer to this question. The truth is: it depends. Generally, claims involving only property damage can be settled more quickly. However, in situations where liability is not clear or where there are more than two drivers involved, these claims can be difficult to settle. That's because insurers may argue that their driver was not at fault or was only partly at fault. Liability claims involving bodily injury usually take longer to settle because insurance companies don't pay until you have completed medical treatment for all the injuries you received in the accident. Finally, the bigger the claim, the longer it is likely to take to settle because insurance companies may want more proof of your loss and/or injuries and may want to investigate the claim more thoroughly.
Q: What is an uninsured claim?
A: A claim you make on your own policy if you have uninsured/underinsured motorist coverage and you're in an accident caused by an uninsured driver. The amount you can recover through such a claim depends on the limits of your coverage.
Q: What is an underinsured claim?
A: A claim you make on your own policy if you have uninsured/underinsured motorist (UM/UIM) coverage and:
Q: What is a med-pay claim?
A: A claim you make on your own insurance policy if you have medical payments coverage. With med-pay coverage, if you're injured in an auto accident, you can receive coverage for your medical care up to the limits of your policy, regardless of who was at fault. Depending on the terms of your policy, you may have to pay a deductible before your coverage kicks in.
Q: What is a PIP claim?
A: "PIP" refers to personal injury protection coverage. It is like med-pay coverage, in that you carry it on your own policy and it pays for expenses related to injuries you receive in a car accident regardless of who was at fault. However, there are some key differences as well:
In some states, you are required by law to carry PIP coverage.
Q: How long does it take to get money for my bodily injury claim?
A: If it's a 3rd party claim, the insurance company usually will not pay anything until you have completed medical treatment for your injuries. If it's a 1st party claim, your insurance company will usually pay for your medical treatment as you receive it.
Q: What types of losses can I recover in a liability claim?
A: Depending on the extent of your damages and injuries, you may be able to receive compensation for: property damage, reasonable and necessary medical care, pain and suffering, a rental car, lost wages, mileage, and other expenses you had to pay because of the accident.
Q: What does Actual Cash Value (ACV) mean?
A: Actual cash value means what your car is worth at a particular time. When settling a property damage claim, insurance companies usually determine what the ACV of your vehicle was just before the accident or damage occurred.
Q: I was hurt in an auto accident, but I can't afford to go to the doctor. What can I do?
A: If you have medical payments ("med-pay") or personal injury protection (PIP) coverage on your auto insurance policy, you can file a claim with your own insurer, regardless of who caused the accident. After your deductible, your accident-related medical treatment should be covered up to the limits of your policy. If you don't have med-pay, PIP, or health insurance and you've hired an attorney, your attorney may be able to contact any doctors you need to see to work out a plan for your treatment.
A: It is generally accepted that a vehicle that has been wrecked and repaired is worth less than a comparable car that has never been in an accident. Diminished value refers to the loss in value a car sustains once it's been wrecked or damaged, even if it's been repaired. When you file a claim after an accident, be sure to tell the insurer you expect compensation for diminished value. The insurance company should consider diminished value, regardless of whether you are making a 1st or 3rd party claim. Be prepared to provide documentation supporting your diminished value claim. This documentation may include: