How do car insurance claims work?

In a matter of seconds, you can get into a car accident. It might just be a fender bender in the best-case scenario. In the worst-case scenario, there could be injury or death. After assessing the situation and making sure you and other parties are safe, you have to take the next step and file a car insurance claim. That process alone can be overwhelming and may fill you with questions like how insurance claims work? We’re breaking down the insurance claims process and answering common car insurance claim FAQs. 

Metromile makes it easy to file an auto insurance claim. Here’s how it works and what you can expect if you need to file a claim.

What is a car insurance claim? 

A car insurance claim is a type of report you submit to your car insurance provider after an accident to obtain financial compensation to cover damage related to the accident. The insurance claims process can vary depending on the provider and also by the type of car insurance you have. 

A car insurance claim will only be approved if your insurance policy covers it. For example, collision and comprehensive coverage typically will cover most things. However, liability insurance only covers property damage and/or bodily injury for the other driver if you’re found at fault. So it needs to fall within your car insurance coverage

The car insurance claims process can also differ depending on the nature of the event. For example, the insurance claim process for car accidents will be different from a stolen car insurance claim investigation.

How do insurance claims work, exactly? 

You generally need to file a car insurance claim after a car accident or instance of car theft or damage. Here’s a breakdown of how car insurance claims work. 

Step 1: Get details and information about the incident 

As part of the insurance claims process for car accidents, vehicle damage, or personal injury, you will want to get details about what happened first. Typically you’ll want to collect the following information to get started:

  • Names and contact information for everyone involved
  • Insurance policies for both parties (as part of a car accident claim procedure compared to a stolen car insurance claim investigation)
  • The date, time, and location of the incident
  • Photos of any damage 
  • A copy of the police or accident report

Preparing this information ahead of time can make the next step in the process smoother and easier for everyone. 

Step 2: Contact your car insurance provider and file a claim 

After preparing all the information and documentation, the next step is to contact your car insurance provider and file a claim. 

When you file a claim with your car insurance provider, you’ll get connected with a claims adjuster. The adjuster will review all of the information and determine which party is at fault. In some states, an insurance company can find you partially at fault and therefore partially responsible.

Step 3: Get approved for a car insurance claim and receive a payout 

After you file a claim, it needs to be processed and approved to move forward. Remember, the details of the incident will be reviewed and based on what’s covered under your auto insurance policy. 

During the insurance claims process, the claims specialist will help determine who’s at fault in the incident. 

If the other party in the accident is found to be at fault, your car insurance company may seek payments from the other driver’s insurance provider. If you’re found to be at fault, you’ll have to pay the car insurance deductible which  would be applied toward damages to your vehicle.  

Step 4: Fix your vehicle and review your premium 

Once you file a car insurance claim and get it approved, you may receive a payout to fix the damage to your car. If you disagree with the settlement, you can get started with the car insurance claim dispute process.

Your car insurance provider may have a list of preferred auto body shops in their network for you to choose from to get your car fixed. 

Be sure to get any damage fixed ASAP to make sure you stay safe on the road (for example, your car may still be drivable but you want to make sure it’s safe and legal). If your car is in the shop, be sure to check with your insurance provider about rental reimbursement or any Lyft/Uber ride-sharing benefits. 

Once everything is settled, you want to review your car insurance coverage to make sure your policy still fits your needs.  If you were found to be at fault for the accident, it’s likely your car insurance premium will rise when it’s time to renew, which can be a good time to shop around for car insurance. 

How do car insurance deductibles work? 

A car insurance deductible is an amount you pay out-of-pocket before your insurance company covers anything. So let’s say you had a $1,000 deductible, and the damage to your car would cost $3,000; your car insurance provider would cover $2,000 for the repairs. 

It’s important to know how much your deductible is and what type of coverage you have, such as collision coverage or comprehensive coverage

Frequently asked questions about car insurance claims 

You might have a lot of questions about how auto insurance claims work, so here are some answers to some common FAQs. 

Do I need to file an auto insurance claim?

Yes, in most cases, it is advised to file a car insurance claim. You must report and file a claim if there has been an accident. If there are minimal damages and no injuries, some people think it’s a good idea to settle with the other party (Hint: it’s often not). 

You could open yourself up to trouble down the line if they realize the damage is more than they initially thought, and your car insurance company may not cover you since you didn’t report it. 

If the damage to your car is minor, for example, scraping the side door, and no one else is involved, you generally don’t need to file a claim. The cost of repair may be less than your car insurance deductible, which means you’ll have to pay for any necessary fixes out of pocket. It’s best to consult your insurance provider if you have any questions or concerns, so they can help you throughout this process.

When do I file an auto insurance claim?

You need to file a claim if there has been an accident or injury involving another party as soon as possible. Many states have certain thresholds that require a report to the DMV. Typically, this is handled throughout the claims process. However, if the damage is above the threshold and there was not a claim filed, you’d still have to file the report. For example, California has a $1k threshold which requires an SR-1 form. Failure to submit this could have consequences, including a suspended driver’s license or registration.  

If you’ve experienced car theft, file a claim quickly so your car insurance can get started with a stolen car insurance claim investigation.

Should I file a claim with my insurance or the other person’s insurance?

If a car accident is your fault, you’ll want to file a claim with your own insurance company. 

If you’re not at fault and have collision coverage, it’s a good idea to file a claim with your own insurance company. This is a good route if the other party isn’t cooperative or has issues with their insurance. 

Lastly, if you’re not at fault and want to avoid paying your car deductible, you can file a claim with the other party’s insurance. However, it’s recommended to file with your own insurance provider and you may qualify for a deductible waiver as your insurance will handle the process for you through subrogation. Regardless of which route you choose, always notify your insurance provider of a loss or any incident or accident. 

Should I use my insurance company’s network of repair shops?

After a car accident, your car insurance company may offer you a network of repair shops to help fix the damaged vehicle. These repair shops are vetted and help keep costs affordable, but you’re not required to use them. If you have another repair shop you’d rather work with, you can do so. 

Some people may get a payout if there is a total loss when the cost of repairs exceeds the vehicle’s value, so you may not need to visit a repair shop. 

How long do I have before I need to file an auto insurance claim? 

You should file a claim with your car insurance provider as soon as possible after an accident. Consult your insurance policy to see about claim filing requirements. 

Why the vehicle insurance claim process is important 

Whether you’re in an accident or dealing with car theft or some other issue, the car insurance claim process is important for a number of reasons. Car insurance can provide financial support or peace of mind during a difficult time.

The auto insurance claims process should ideally be easy to manage, but often, it can lead to a lot of back and forth. That’s why Metromile set out to create a car insurance claim procedure that is different from the rest. 

How car insurance claims work with Metromile

Traditional car insurance companies treat filing a claim differently than Metromile. Notably, Metromile aims to save you the hassle by using technology to help you with the car accident insurance claim procedure. In some cases, your entire claim could be completely automated, meaning you can be made whole again more quickly.

We have AVA, which is Metromile’s AI claims system that can make the car insurance claims process easier than ever. AVA guides you through getting damage photos, collecting information, and even same-day payments for some claims. Using this innovative technology, you can resolve the issue at hand sooner. For example, AVA can help determine what actually happened and connect you with local repair shops or rental cars for your convenience. 

Our goal is to make auto insurance seamless. Because when you’re in a position when you need to file a claim, the last thing you need is to add any more stress to your plate. 

The bottom line 

Having car insurance coverage is a great financial protection for drivers. No one wants to file a claim or get into an accident, but your car insurance is designed for situations just like this and helps protect you and make sure you can move on with your life. 
If you’re wondering how do car insurance claims work, now you have a better idea of the insurance claims process with this breakdown. If you want to shop for better insurance now or after an accident, consider Metromile. If you don’t drive frequently, you could see substantial savings by paying for miles you actually drive, instead of a flat rate for miles you aren’t. Grab a free quote today.

Melanie Lockert is a freelance writer, podcast host of the Mental Health and Wealth show, and author of Dear Debt. She’s a cat mom to two jazzy cats, Miles and Thelonious, an amateur boxer, music lover, and needs coffee to function.