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Here’s how auto insurance works after an accident

You buy auto insurance to protect you in case anything happens to you on the road. But after an accident, what really happens? Does your insurance carrier truly have your back?

The answer is that your insurance company is working for itself. It has a legal duty to help you, but that extends only so far as described in its contract—your policy. From the minute you report your accident, you can expect your insurance company to look for ways to fulfil the lowest possible level of its obligation to you.

Reporting the accident and filing a claim

California demands you report any accident that results in an injury or property damages greater than $750. You make your report to the Department of Motor Vehicles (DMV), and you must file this report within 10 days from the accident. It’s generally a good idea to report sooner. If you don’t report the accident, the DMV could suspend your license.

Reporting your accident to the DMV is separate from filing a claim with the insurance. If you hope to recover any damages from your accident, you must also contact the insurance to file a claim — even if the accident was not your fault. You may also want to file a claim if you think the other driver may file against you.

The insurance company you contact depends on who was at fault:

  • If you want repayment for damages that were clearly the other driver’s fault, you contact the other driver’s insurance
  • If you want coverage for an accident that was clearly your fault, you contact your insurance
  • If the fault is shared, unclear or contested, you contact both insurance companies

When you contact the insurance company, you can expect the insurance agent to ask for the information he or she will need to begin investigating your claim. This likely includes:

  • Your name and the names of the other people involved
  • Each driver’s insurance policy
  • Identification of the vehicles involved
  • The date, time and location of the accident
  • A description of the accident
  • The names and contact information for any witnesses

You want to provide the insurance company the information it needs to process your claim. But you want to be careful about what you say. The insurance company may want to take a recorded statement from you as part of the investigation. If it is the other driver’s insurance company that wants to obtain your recorded statement, it is best to have an attorney on the line to protect you when answering the insurance company’s questions. If it is your own insurance company, you need not be as concerned unless the representative is taking the statement to see if you are covered under the policy.

What the insurance company is required to do

In addition to the terms of their policies, insurance companies are bound by certain rules and regulations. Among other things, they must:

  • Advise you of your benefits, coverage, time limits and other provisions
  • Acknowledge your claim and begin investigating within a reasonable time frame (no more than 15 days after your call)
  • Communicate with reasonable promptness
  • Accept or deny your claim within 40 days of receiving such proof as police reports, medical bills and repair estimates
  • Offer a fair settlement

Of course, the definition of “fair” is very often a point of contention.

The insurance company sees the accident differently

Insurance companies make money by paying out less in claims than they take in from premiums. Your insurance entered a contract with you, and the other driver’s insurance entered a contract with him or her. But both insurance companies have incentive to pay as little as their contracts demand. Accordingly, you can expect insurance adjustors to investigate the claim to look for any way they might:

  • Shift the blame away from their clients
  • Downplay your injuries and property damage
  • Overlook future costs and considerations
  • Get you to accept a settlement before you know the extent of your damages

Especially when serious injuries are involved, these can be high-stakes concerns. The insurance companies understand this from the moment you make your call. Their teams will be ready to look for anything you did that acknowledged blame. Anything you did that suggested you weren’t so badly injured. Any evidence that could get them off the hook. If you’re not careful about these things, you’re placing yourself at an immediate disadvantage.

The role of the personal injury attorney

In many cases, the best way to protect your interests is to contact an attorney who understands how the insurance works. Where the insurance companies have incentive to pay you less, your attorney has incentive—and a legal duty—to represent your interests. Your attorney’s familiarity with the personal injury process can help you:

  • Properly identify who was at fault—and to which degree
  • Demonstrate the true extent of your injuries and damages
  • Consider how the accident may impact your future
  • Push the insurance to a settlement that better honors its contract

The higher the stakes, the more important it is to contact an attorney early in the process. The earlier you contact an attorney, the better you can preserve key evidence, avoid common pitfalls and pursue fair compensation.