How Do Car Insurance Companies Evaluate Accident Claims?
Going through a car accident can be a traumatic experience, and the insurance claims process and approval can make recovery even more difficult. Insurance companies consider various factors while evaluating claims, such as fault determination, policy coverage, damage assessment, and applicable laws. However, understanding the questions that insurance companies ask during their investigation can make the process much easier to navigate.
If you need guidance, our car accident lawyers at Uptown Injury Law, PLLC, are here to help. We can guide you through every step of the car accident claim process. Get in touch by calling 917-540-8728 for a free consultation and maximize your chances of receiving a fair settlement for your damages.
How Does the Investigation Process Start When You Make a Claim?
When you file an insurance claim, your first interaction with the insurance company marks the beginning of the investigation process. You can complete the form on their website or call them directly to report the incident.
Upon receiving your claim, the insurance company assigns an adjuster to your case. The adjuster will contact you to gather more information necessary for the investigation. In New York, once the insurer receives your claim notice, they will reach out to you within 5 business days.
During this communication process, they will provide you with an Application for Benefits and a letter that outlines the No-Fault coverage options, as well as your rights and responsibilities.
This step is vital because it lays the foundation for a thorough assessment of your case. It ensures that all the details surrounding your accident are thoroughly examined and understood.
How Do Car Insurance Companies Investigate Accidents?
The insurance company begins an investigation once you file an insurance claim. They interview the driver, passengers, and any witnesses involved in the accident. Additionally, they inspect both vehicles to assess the damage and determine who is at fault.
Moreover, if you have claimed an injury, the insurance adjuster may also request your medical records to assess the severity and duration of your injury. They may also visit the accident scene and contact other drivers and witnesses to get a clearer picture of the case.
Apart from these interviews and inspections, the insurance adjuster also reviews road conditions during the accident. They take into account factors such as:
- Weather (was it raining?)
- Lighting (was it dark?)
- Red traffic lights or stop signs
Why Do Insurance Companies Need to Investigate Car Accidents?
Car insurance companies investigate accidents for several reasons, including determining fault and liability, assessing insurance coverage, and validating claims.
- Fault: The car insurance company will determine who is liable for the accident. If you were at fault, it can lead to cancellation or non-renewal of your car insurance policy and affect your premium rates in the future.
- Insurance Coverage: To determine the damages caused during the accident, insurers need access to all pertinent information about each vehicle involved and any other factors related to the incident (such as weather conditions). The medical records and damage severity help the adjuster offer a fair settlement amount to you.
- Fraudulent Claims: To prevent fraudulent claims and ensure at-fault drivers are held accountable for their actions.
The insurance company has the right to deny a claim if they suspect the claimant caused the accident. Thus, it’s vital to cooperate with their investigation and provide accurate information to prevent claim denials.
Be Prepared to Handle a Car Accident Investigation
Before contacting your insurance company to report an accident, it’s crucial to prepare yourself. Many people incorrectly assume that their claims adjusters will accept whatever they say without question.
However, car insurance companies are responsible for investigating accidents and paying claims, which means they will always require additional information from claimants.
If you choose to seek compensation for your injuries or vehicle damage, you must take the following steps before the insurance company releases the funds.
- Proof of Medical Expenses
Even minor fender-benders require some preparation (and occasionally from your insurance adjuster). Most insurance companies expect if you are involved in fender benders, you need to provide evidence of injuries and proof of lost income sustained during the accident (if applicable). Thus, keeping copies of all medical bills, receipts, and pay stubs is essential.
The insurance adjuster may also ask you to attend a medical examination from their preferred doctor. This examination is often called an independent medical examination, but it is not independent since the person conducting the examination works for the insurance company. If they ask questions about the nature and extent of your injuries, it’s best to consult an attorney to help you respond to their requests.
- Estimates From Body Shop For Vehicle Repairs
When filing a claim for an accident, obtain estimates from a body shop for the necessary repairs on your vehicle. In case you have already repaired your car, make sure to submit all relevant paperwork, such as invoices and receipts. If you haven’t fixed your car yet, you can start the process while your claim is still ongoing.
How Do Car Insurance Companies Calculate Vehicle Damages?
Car insurance companies often send their own adjuster to assess vehicle damages before approving claims. If the vehicle is safe to drive, you might have to take it to an inspection location where the adjuster will take photographs of all the damaged areas. Alternatively, the inspector may come to your home or the body shop to complete the inspection if the car is not safe to drive or you can’t meet at that location.
During an inspection, the adjuster uses software to search for parts based on your car’s make, model, and the location of repairs. This helps create an estimate based on the actual cost of parts and the average labor rate for your area. Remember that the estimate may differ from others you receive due to varying labor rates across different areas.
If the cost of repairs exceeds the amount on the estimate, the body shop can send a new estimate to the claims adjuster. The insurance company will then review the new amount and negotiate with the body shop. Once the repairs are completed, you will pay your deductible to the body shop. If the accident was not your fault, you can recover those funds from the at-fault insurance company later.
To have a smoother claims process and ensure that your car is repaired to your satisfaction, make sure to gather all the relevant documentation and collaborate closely with your insurance company throughout the process.
How Does the Insurance Company Value Your Wrecked Car?
Once you report an accident to your insurance company, they send an adjuster to assess the damage. If the repair costs exceed a certain percentage of your car’s value, typically between 51% and 80%, the car may be considered totaled even if it is repairable. In New York City, the threshold for a totaled car is 75% of the car’s market value. If the repair costs exceed this amount, the car is not repaired and is deemed a total loss.
If your car falls into the “totaled” category, an appraisal is necessary to determine its value for insurance purposes. The appraisal process is typically conducted by a licensed appraiser who estimates the car’s market value before the accident. Note that the appraisal doesn’t consider the damage caused by the accident. Its sole focus is on determining the vehicle’s value before the accident.
To be fair and transparent, the insurance company hires a third-party appraiser to evaluate claims. This appraiser evaluates the claim alongside the insurance company’s own appraisal to provide a more comprehensive overview. Both appraisals contribute to the final offer made to you.
How Do Insurance Companies Calculate Car Values?
Insurance companies determine car values by considering factors such as year, make, model, condition, mileage, accident history, and depreciation.
Actual Cash Value (ACV)
The insurance company assesses the value of your claim when you report damage or theft of your car. They use a metric called the actual cash value (ACV). The ACV varies by state, but in New York, it includes the replacement cost of the car, as well as any sales tax owed.
You must understand the rules regarding ACV in your state to make informed decisions when filing a claim. This will help you avoid low offers and ensure you receive appropriate compensation.
Factors Considered for ACV
Insurance adjusters assess various factors to calculate your car’s ACV, including:
- Make, model, and year
- Mileage at the time of the car crash
- Pre-loss condition of your vehicle
- The resale value of parts and metal (salvage value)
- Sales prices of similar cars in your local area
If you bought a new car and had an accident after a year, its ACV will still be significantly lower than its original purchase price. Even driving a new car off the lot can decrease its value by 9% to 11%, and its depreciation can accelerate to 20% by the end of the first year.
One frequent problem car owners face is that if their car is declared a total loss due to an accident or theft, the insurance payout may not be enough to cover the outstanding balance on their car loan. This can leave them with a financial burden and no means to purchase a new car. In such cases, you can benefit from gap insurance.
Gap insurance covers the remaining amount of your car loan if your actual cash value (ACV) doesn’t cover the total loss. This type of insurance can be beneficial if the amount you owe on your car loan is more than its actual value.
While it may come at an additional cost of $20 to $56 per year, gap insurance can provide car owners peace of mind and financial security. It’s important to note that gap insurance typically does not cover a new car replacement.
New Car Replacement Insurance
If you lose or completely ruin your car, new car replacement insurance allows you to purchase a new car model without considering depreciation. This coverage can give you peace of mind, but it usually costs more than standard ACV coverage. Insurance companies that provide new car replacement insurance check the age and mileage of eligible vehicles.
Some companies also provide enhanced car replacement coverage. It allows you to upgrade to a newer or better model if your car is declared a total loss. ACV and new car replacement coverage typically have a deductible subtracted from the insurance payout.
How Can You Negotiate Car Insurance Settlement?
If you are not satisfied with the decision of your insurance company, you can always try to negotiate a settlement. When an insurance adjuster presents you with a settlement offer, they should also provide a written explanation of the amount offered. It is essential to ask for a copy of the valuation report if it isn’t included in the offer. This will give you all the necessary information to make informed decisions.
If you feel the settlement offer is unfair, you can refuse it and negotiate a new settlement figure. However, before making a counteroffer, it is advisable to conduct thorough research. You may need to include relevant documentation to support your counteroffer, such as:
- Car’s features list, including any special features the adjuster may have missed, such as leather seats or an entertainment system. You can also negotiate the value of permanently attached equipment, like toolboxes or a wheelchair lift.
- Estimated retail value of your car.
- Sales of similar cars in your area (check from online sources like Autotrader).
In addition, before taking any further steps, you can request the insurer’s supervisor to review the insurer’s decision. If that doesn’t work, seek legal remedies like mediation, arbitration, or a lawsuit in New York.
However, it is essential to remember that the insurance company may not accept your counter offer immediately. And taking legal action can be time-consuming and costly if you can’t reach an agreement. Therefore, consider hiring an experienced attorney to help you navigate the legal process and fight for your rights.
Should I Consider Hiring an Attorney for My Car Insurance Claim?
If you’re comfortable navigating the process and waiting for the final settlement, you can manage your car accident claim alone. Remember to be patient throughout the entire process. Ensure you avoid actions that could jeopardize your case or weaken your position during this period.
However, situations can change rapidly, especially when the other driver’s insurance company appears unwilling to negotiate fairly. At a certain point, nothing can replace the benefits of legal expertise.
The Insurance Research Council (IRC) reports that if you get the help of an attorney for your car insurance claim, you could receive 3.5 times more compensation compared to those who handle it without legal assistance.
Let Uptown Injury NY Lawyers Win Your Car Insurance Claim
If you’re injured in a car crash, you can file an insurance claim and recover your losses. At Uptown Injury Law, PLLC, we’re here to make it easier. Our highly skilled team of car accident lawyers will handle all the paperwork, negotiations, and court proceedings on your behalf. We’re not just your lawyers. We’re your advocates – standing by your side every step of the way.
Our team of experienced car accident lawyers has been serving clients for over 15 years, and we have secured more than $100 million in settlements and verdicts. Additionally, our contingency fee policy ensures that you don’t have to worry about paying anything unless we win your case, giving you the peace of mind to focus on your recovery.
We are committed to providing you with the support and guidance you need to make informed decisions and achieve the best possible outcome for your case. Contact us or call 917-540-8728 to schedule your FREE case review today.
How Do You Choose the Right Personal Injury Attorney for Car Accidents?
To choose the right personal injury attorney, consider their track record, success, and experience handling car accident claims. Furthermore, explore bar association websites, where you’ll find attorney profiles with all the details. Once you’ve identified a suitable lawyer, book free consultations to discuss your case and assess if they align with your needs.
Does Auto Insurance Cover Personal Injuries in Accidents?
Yes, auto insurance typically includes coverage for personal injuries as part of your policy. If you get injured in an accident, the coverage pays for medical bills and related expenses, regardless of fault. Review your policy details to understand the extent of coverage and any specific conditions that may apply to personal injury claims.
Can You Negotiate the Total Loss Value?
Yes, you can negotiate the total loss value if the insurance company’s initial assessment of your vehicle’s total loss value seems too low. You can provide evidence, such as recent sales listings for similar vehicles in your area, to support your claim for a higher payout.
Can You Get Gap Insurance After You’ve Already Secured a Car Loan?
Yes, you can often add gap insurance to your policy even after securing a car loan. Most insurance companies offer this gap insurance as an option. It’s a wise choice if you didn’t initially include it in your policy and your car’s loan balance is still higher than its value.
How Do Insurers Determine Repair Estimates For Car Damage?
Insurers determine the repair estimate by considering the extent of damage, necessary parts, labor costs, and other factors. Additionally, the insurance adjusters may review and negotiate the estimate to reach a fair cost for vehicle repairs.
How Do Insurers Calculate Medical Costs After a Car Accident?
For medical costs, the insurance adjuster evaluates medical bills, treatment plans, and injury severity, using industry guidelines to determine reasonable reimbursement. This assessment may include negotiations with healthcare providers for fair and accurate compensation figures.
What If Your Car Is Declared Totaled by the Car Insurance Company?
The insurance company will typically pay you for your wrecked car. It will be based on the car’s actual cash value (replacement cost minus depreciation). You can accept this settlement or negotiate with the insurance company to decide a final settlement amount.
Can Auto Insurers View My Medical Records After a Car Accident?
Auto insurance providers can access your medical history if it is related to an accident. However, they usually only review the information that pertains to the accident and the injuries sustained. Your medical records play a crucial part in verifying the authenticity of your medical claim and determining the appropriate compensation.