There you were, just minding your own business—and then wham!
An emotionally compromised teenager was texting their BFF while driving, ran a red light, and smashed into your car. A thief broke into your apartment while you were off on vacation and stole a bunch of your stuff. Your washing machine went on the fritz and flooded your living room.
Whatever the case may be, it’s never fun when Murphy’s Law rears its ugly head and causes damage with a bunch of dollar signs attached to it.
But that’s what insurance is there for, and having the right types of insurance in place protects you from financial ruin after the unthinkable happens. And, depending on what kind of damage you’re facing, filing an insurance claim might help relieve some of the financial stress.
What Is an Insurance Claim?
When you file an insurance claim, you’re making a formal request to your insurance company to receive money to help you pay for repairs and other expenses caused by a policy event (like a car accident or a home burglary) that is covered by your insurance.
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After you file all the paperwork, the insurance company usually sends an insurance adjuster to investigate what happened. And then, if the claim is validated and approved, you’ll receive a check in the mail to cover your losses.
According to the Insurance Information Institute, about one in 20 insured homeowners file a claim each year.1 And with Americans driving more and more each year, car insurance claims are also rising—about 6% of all drivers with collision coverage filed a claim in 2017.2 So if you’re not filing a claim now, you probably will at some point in the future!
But do you always need to file an insurance claim when you get into an accident?
When to File an Insurance Claim
To file, or not to file? Shakespeare never had to deal with insurance claims, but that is the question we need to ask after an accident. And the answer is: It depends.
A general rule of thumb is that if your damages are less than your deductible (or just a couple hundred bucks above it), it’s probably not worth going through the trouble of filing a claim for a very small payout—if you get one at all.
It’s also important to remember that when you file a claim, there’s a chance your insurance company will raise your premium rates. Yes, even if the other driver was at fault or you can’t control the weather. There’s even a chance they might cancel your policy under certain circumstances.
Let’s say you accidentally crash your car into a tree. You have a $1,000 deductible on your collision coverage, and it would cost you $1,200 to repair your car. Is it worth going through the insurance claim process for a $200 insurance payout and higher insurance premiums? Probably not. In that case, you’re better off using your emergency fund to cover the repairs—that’s what it’s there for. Once you start to feel the pain financially, that’s when you should probably file a claim.
Here are three specific scenarios when you should strongly consider filing a claim:
1. When someone is injured.
If you’re in a car accident and you, the other driver or a passenger in either car gets hurt, that’s an automatic reason to file a claim.
2. When it’s not clear who is at fault.
Sometimes there’s some confusion about who’s to blame for an accident. In that case, you’ll let the insurance companies for both parties figure it out.
3. When you suffer a “total loss” or can’t afford to pay for the damages.
When your car is completely totaled, you’re probably staring at thousands of dollars in damages. Those are some pretty hefty costs you probably won’t be able to handle yourself. So filing a claim makes sense.
Every situation is different, so it’s important to get in touch with a representative from your insurance company or an independent insurance agent to help you weigh the pros and cons of filing a claim in your case.
How to File an Insurance Claim
So, let’s say you’ve just been in a huge car accident and the front of your car is smashed in like a broken accordion. You’re okay, thank goodness, but it’s pretty clear your car is going to probably be a total loss and you’ll need to file an insurance claim.
What exactly do you do? We’re glad you asked! Here are some important steps to take in order to file your insurance claim.
Step 1: Call the Police if Necessary
If a crime was committed, someone was hurt in an accident, or there is significant damage, don’t just stand there. Call 911 and get help! And while you don’t necessarily need a police report to make an insurance claim, it definitely doesn’t hurt to have one.
A police report will paint a picture of what exactly happened in an accident or at a crime scene, and include information that’ll make the insurance claim process much easier.
Step 2: Document Everything and Exchange Information
Now it’s time to document what you can from the scene of the accident and gather information from all the parties involved. Think of it as a scavenger hunt. Make sure you get the following:
Name, address and phone number of the other driver(s) and a photo of their driver’s license, if possible
Insurance policy numbers
Year, make, model and license plate numbers of all the vehicles involved
Photos of the accident from all sides and angles
Detailed notes from any conversations you had with the people involved with the accident
If you’re hurt and need medical attention, you’ll also want to hang on to any physician reports, medical bills and other documentation you receive for treatment of your accident-related injuries.
What about homeowners insurance claims? Take photos of damage done to your home or make a list of items that were damaged or stolen in a robbery. And if you have to stay at a hotel while repairs are being made to your house, keep the receipts as proof of costs.
Step 3: Contact Your Insurance Company
Once you and everyone involved in the accident are safe, get in touch with an agent from your insurance company and ask what else you’ll need to file your claim. Your agent knows the ins and outs of the claims process and will be able to give you the direction you need.
Here are some basic questions you’ll want to ask your insurance agent:
1. Who do I report my claim to?
If you’re in a car accident and the other driver is at fault, you’ll likely file a claim with their insurance company. But, in most other cases, you’ll file a claim with your own insurance provider. No matter the case, you’ll still want to call your own insurance company and keep them in the loop.
2. How long do I have to file a claim?
Depending on your insurance company and the type of policy you have, you can have as little as 30 days or as long as three years to file an insurance claim. Either way, once you get a good handle on the damage done and have all the necessary information you need, you should file try to file your insurance claim as soon as reasonably possible.
3. What will I need to file an insurance claim?
When you file a claim, you’ll be asked to provide some basic details, such as where and when the accident or incident took place, contact information for everyone involved and a description of what happened. You might also be asked to give an estimated cost of the damage from the accident—if you have that available.
When you’re making a homeowners insurance claim, you’ll need to fill out a Proof of Loss statement and list any items that were stolen or damaged and how much it would cost to replace them.
Step 4: Filing Your Insurance Claim
Okay, you’ve called all the right people. You’ve gathered all the information you could. Now it’s time to actually file your claim.
Most insurance companies will allow you to file a claim online or through a mobile app, by phone with one of their agents, or by filling out a claims form and sending it to them via email or fax. It’s your choice!
What to Expect After Filing an Insurance Claim
Now what? After you file your claim, the insurance company may send an insurance adjuster to investigate the accident and the damage done. Think of an adjuster as the insurance version of Sherlock Holmes—minus the pipe and weird hat.
During the investigation, the insurance adjuster will take a look at all the facts to get to the bottom of what happened. After they determine the cause of the accident, the adjuster will make a recommendation for how much the insurance company should pay for the loss.
Oh, and one more thing: If you’re dealing with another insurance company’s adjuster, remember their goal is to spend as little money as possible. That’s why it’s critically important to thoroughly document the accident and be completely honest about your injuries and all parts of the accident—just in case they try to downplay your losses.
Talk to An Insurance Pro
Whether you’ve just been in an accident or haven’t had one in years, it’s important to be prepared. That means making sure you have the right coverage in place.
Our independent insurance Endorsed Local Providers (ELPs) are professionals who can review your existing policy and shop around for the best coverage at the right price. That way, you’ll be ready no matter what life throws your way.