Understanding your insurance quote after an accident

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No matter how long you’ve been driving, being in a car accident is a stressful situation. After an accident has occurred, there are several new situations you may have to deal with, including police intervention, dealing with car repairs, and possibly managing the treatment of your injuries. Navigating the financial aspects of an insurance claim just adds another step to the process. From paying the mechanic to covering the cost of various medical bills, this Bankrate review will help you understand the steps to review and accept an insurance claim quote.

Can you negotiate an insurance quote?

Auto insurance companies may not mention that the offer is negotiable, but you can always make a counter offer. You can start by asking your insurance company to explain how the adjuster arrived at the figure and then dispute any inaccuracies. You may find when you receive your initial bid that there is additional information or context you can provide to increase the bid amount. For example, you may be able to provide additional proof of the amount of damage, especially if a mechanic offers you a higher fee after a thorough examination of the damage. Perhaps you initially only had a visit to the emergency room, but after an examination with your primary care physician, you realized that you will need more medical treatment than you originally thought. Keep changes like this in mind when considering whether you have a valid case to approach the over-the-counter insurance company again.

If you decide to make a counter offer, make sure you present your case in a professional manner. Keep calm as you prepare your argument and remember that you have every right to present your case. Do your own thorough research and collect more than one repair estimate when necessary. While you are receiving treatment, be sure to gather all necessary documentation, especially any medical bills or other expenses you incurred because of the accident. If possible, put your arguments in writing and include all your backups to avoid verbal miscommunication.

How to work with different types of insurance quotes

You may receive an insurance quote that does not meet your expectations. If this happens, consider asking the questions you may have before reacting, and then formulate a response.

When the damage is considered a total loss

If your car is damaged in an accident, you will either file a claim against the at-fault driver’s property damage liability coverage or against your collision policy’s coverage. If the estimated cost of repairing your car is greater than the actual cash value of your car, your car will be declared a total loss. In some states, damages only need to be greater than a portion of the car’s value. Total loss also applies if your car is stolen, in which case you will make a claim against your full cover.

If you disagree with the insurance adjuster’s calculation, you will have to prove that the car is worth more than your insurance company’s estimate. An example of a higher value car may include previous upgrades on your vehicle. Otherwise, your insurance company will pay you or your leasing company the market value of your car less depreciation. This figure is often different from the Kelley Blue Book value and can sometimes be less than the total amount you still owe on your car. If you have a loan or lease on a newer vehicle, you may want to consider gaps insurance.

When the offer is lower than expected

Although financial liability after an accident will vary depending on your state’s insurance laws and the details of the accident, keep in mind that if your insurance company is the one paying the claim, you need to have the right types of coverage to get paid. For example, if your car is damaged in an accident that you caused, you will need collision coverage to pay for the damages. If you only have car insurance with minimum coverage, you will have to pay for the damage to your car yourself. You will also need to consider your coverage limits; if the damage exceeds your coverage limits, you will be responsible for paying the difference.

If you were injured in the accident, make sure your quote includes the cost of your medical bills. Depending on the type of coverage, you may also be entitled to compensation to cover lost wages. Gathering all your medical bills is an easy way to prove medical expenses—just make sure they’re related to the accident. To prove your lost wages, a letter from your employer stating your missed time and compensation, along with a medical note from your doctor confirming your need to be away from work will help support your claim. If you live in a no-fault state, you’ll likely have personal injury protection (PIP) that will cover your own medical expenses and lost wages, regardless of who caused the accident. If you live in a fault state, medical bills are usually covered by the insurance company that caused the accident, but they may not include coverage for lost wages.

When you receive a quote from your insurance company, you should review it for accuracy. If your car has been damaged, consider getting an independent estimate of the cost of repairs. You may even want to get estimates from multiple mechanics so you have more information to provide to the insurance company.

Once you have gathered your additional evidence, submit a written counter proposal to the insurance company requesting a higher claim payout. If your insurance company doesn’t comply and you still think the offer is unfair, you may want to hire an attorney.

When the regulator uses the “improvement clause”

Most auto insurance policies include an improvement clause that requires the policyholder to pay a fee if repairs to the car improve its condition compared to before the accident. For example, if a mechanic uses new parts to repair an old car and therefore adds to its value, you may have to pay an enhancement fee.

If you want to reject your insurance company’s quote because of an improvement fee, you will need to prove that the necessary repairs do not add value to your car. It may help to provide a statement from your mechanic or other expert when you submit your counter offer.

How a settlement works

After negotiation, you and your insurance provider will agree to the settlement in writing. When you get your payout reduced by your deductible, it’s important to understand what to do with your auto insurance claims check. Depending on your insurer and your state, you may be required to use the funds as designated in the payout. In some situations, you may be able to cash the check and use the funds at your discretion. Make sure you understand what you’re allowed to do with the money before you spend it.

Your insurance company may issue the check to you and the repair shop, in which case you will need to sign the check to the mechanic. Otherwise, your insurer may require you to provide proof of repair. If your vehicle is financed, your finance company can either be listed on the check as the payee or have a say in where the vehicle is repaired.

Frequently Asked Questions

    • If an insurer refuses to pay on your car insurance, there are recourse options. First, you need to ask questions to find out why the claim was denied. There may be exclusions in your policy or you may not have enough coverage. If you still disagree with your insurance company, you can gather evidence to appeal the denial in a formal letter.

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    • If you do not agree with your insurer’s settlement offer, you can always negotiate with your insurance company. It helps to gather additional evidence before sending a letter to your insurance company requesting an updated quote.

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    • In 2021, the average claim check was $22,734 for bodily injury liability claims and $5,314 for property damage liability claims. The average payout for a collision claim was $5,010 and the average overall claim check was $2,042. After a car accident, insurance is vital to avoid paying these costs out of pocket.

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    • The amount of car insurance you need will depend on several factors. Most states have minimum liability requirements for what you must wear to comply with state laws. In addition to these minimum coverage requirements, you’ll want to determine the best policy based on your budget and level of risk tolerance. While adding collision, comprehensive, towing or rental coverage or even increasing your liability limits can cost more in annual premiums, you can feel more comfortable on the road knowing you have solid coverage.

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