Car insurance claims, from the crash to the check

How a car insurance claim works

Every insurer has its own forms and apps, but the stages of an auto insurance claim are much the same everywhere.

1. The loss happens. A crash, theft, hailstorm, fallen tree or hit-and-run damages your car or someone else's property, or someone is hurt.
2. You report it. You notify your insurer, and in a third-party claim the other driver's insurer, by phone, app or online. Policies require prompt notice, and the Texas Department of Insurance notes that most companies set deadlines for filing.
3. The insurer opens a claim file. You get a claim number and an adjuster, the person who investigates and values the claim.
4. The adjuster investigates. That can mean a recorded statement, the police report, photos, witness statements, an inspection of the car and repair estimates.
5. The insurer decides coverage and fault. It checks whether the policy covers the loss and, for liability claims, who caused the crash.
6. The insurer values the loss. For a repairable car, that is a repair estimate. If repairs would cost too much compared with the car's value, the car is declared a total loss and the insurer pays its actual cash value.
7. You get paid. Payment goes to you, to the repair shop, or jointly to you and your lender if the car is financed. On your own collision or comprehensive coverage, the deductible is subtracted.

If you disagree at any point, you have options, from negotiating with the adjuster to the policy's appraisal clause and a complaint to your state insurance department. Our guide to claim disputes explains each one.

First-party vs third-party claims

The most important question in any claim is whose insurance pays.

A first-party claim is one you file with your own insurer under your own policy. Collision, comprehensive, personal injury protection (PIP), medical payments, uninsured motorist and rental reimbursement claims are all first-party claims. Your insurer owes you duties under the contract, you pay your deductible, and you can usually use the policy's appraisal clause if you disagree about the amount.

A third-party claim is one you file against someone else's liability insurance because their driver caused the crash. You are not that insurer's customer, so there is no deductible, but it only pays if its driver is legally responsible, and only up to that driver's limits. It may dispute fault, and you cannot use its appraisal clause: the Texas Department of Insurance points out that appraisal is only available with your own insurer.

Many people use both. If the other driver is clearly at fault, you can claim on their liability coverage. If that insurer is slow or disputes fault, you can claim under your own collision coverage, pay your deductible, and let your insurer try to recover the money from the other company. This recovery is called subrogation. California's consumer guide notes that when your insurer pursues the at-fault party, it must include your deductible unless you have already recovered it.

Types of car insurance claims

Each part of a policy covers different losses. This table shows which coverage usually responds.

For details on each coverage, see our guides to liability, comprehensive, uninsured motorist, personal injury protection and rental reimbursement coverage. Special situations have their own guides: hit-and-run, windshield and glass and diminished value claims.

How long does a car insurance claim take?

A simple glass or towing claim can be paid within days. A claim with injuries, disputed fault or a total loss can take weeks or months. The NAIC's consumer guidance says insurers should pay claims promptly and within a reasonable time, and notes that some states set specific time limits.

The NAIC has also published a model regulation on unfair property and casualty claims practices that states can adopt or adapt. This table compares its time limits with the rules in two large states.

The clock usually starts when the insurer has what it needs, such as a proof of loss, so slow paperwork on your side slows the claim. In Texas, these prompt-payment deadlines apply to your own insurer; the Texas Department of Insurance notes that another driver's insurer must act in good faith but is not bound by the same timetable. Your state insurance department can tell you the exact rules where you live.

What decides how much you get paid

Several things set the final number:

• Your coverage and limits. Liability pays only up to the at-fault driver's limits. Collision and comprehensive pay up to the car's actual cash value.
• Your deductible. On collision and comprehensive, the deductible comes off the payment. Our deductible chooser shows how different deductibles change what you pay out of pocket.
• Actual cash value. For a total loss, insurers pay what the car was worth just before the loss, not what you paid for it or what you still owe on it.
• Fault. In a third-party claim, the other insurer may pay less if it believes you share the blame, depending on your state's negligence rules.
• Condition and betterment. Insurers may adjust for prior damage or for parts that wear out, such as tires. California's regulations require such adjustments to be itemized, measurable and explained in writing.

Example: if a crash causes $4,000 of damage to your car and you have a $500 collision deductible, your insurer pays $3,500 to you or the shop, and you cover the first $500. If the other driver was at fault and their insurer later reimburses yours, you may get your $500 back.

When a claim may not be worth filing

Filing every small loss is not always the best choice. If repairs cost about the same as your deductible, a claim pays little or nothing. Claims also go into industry databases such as the Comprehensive Loss Underwriting Exchange (CLUE), which insurers check when you renew or switch, and the NAIC says premium increases are always more likely when an accident is your fault. Read will my rates go up after a claim before you decide, and see how claims history affects what you pay.

Some losses should always be reported to your insurer even if you do not plan to claim: any crash with injuries, any crash where the other driver might claim against you, and any crash your state requires you to report to police or the DMV. If the other driver later claims or sues and your insurer never heard about the crash, late notice can complicate your coverage. Our checklist of what to do after a crash covers these reporting duties, and our guide for drivers after an accident explains what happens to your policy next.

Guides in this section

• Filing a claimStep-by-step guide to filing an auto insurance claim, with documents, adjuster inspections, estimates and deadlines.
• After a crashChecklist for the crash scene and the days after, with police and DMV reporting rules and photo tips.
• Total lossHow a totaled car is valued, state total loss thresholds and how to negotiate the insurer's offer.
• Claim disputesYour options when you disagree with an adjuster, from negotiation and appraisal to complaints, mediation and court.
• Rates after a claimWhen a claim raises your car insurance premium, state rules that limit surcharges and how long they last.
• Hit-and-runWho pays after a hit-and-run, police reporting deadlines, and how uninsured motorist and collision coverage apply.
• Windshield and glassHow auto glass claims work, zero-deductible glass laws and why camera recalibration matters after a replacement.
• Diminished valueHow to claim for the resale value a car loses after a crash, and how state rules differ.