What to do after a car accident that's not your fault
Dealing with your car insurance company after a crash can be a time-consuming hassle. Now imagine what it's like to deal with the insurance company of a person you don’t know who crashed into your car. Here are some tips to ensure you maintain your cool — and your sanity — when making a claim with someone else’s insurer, known as a third-party claim.
The driver who crashes into your car is responsible for reporting the accident to his or her car insurance company. However, make sure you contact their insurer as well. Motorists who cause accidents are often reluctant to report them.
It’s vital to get complete information on the other party at the accident scene, including the other driver's address, insurance company name and policy information, along with statements and contact information from witnesses. Take pictures of the accident scene, the camera on your smartphone will work in a pinch. This way, you'll have evidence gathered at the scene to bolster your position on the cause of the accident. Check to see if your car insurance company has a mobile app that can help you document the accident while at the scene. Many auto insurers have apps that come with an accident checklist and tell you how to best gather information so you can make a claim with it or the other party’s insurer.
In addition, the National Association of Insurance Commissioners’ free smartphone WreckCheck App can help you collect and exchange the right information.
You should then inform the other person's insurer that you have been involved in a crash with one of its policyholders. Relay only the facts of the accident, even if you believe the other driver to be at fault.
The police will determine who is at fault for ticketing purposes. Independently, the insurer will make its own determination of fault, which may or may not match law enforcement’s assessment of fault. The insurer will take into account items such as the police report, driver and witness statements and physical evidence. (Here's more on what to do after a car accident.)
Although you may feel that you have not caused the accident, you should contact your insurance company anyway. This establishes your good-faith accident-reporting effort and can aid you if the other party's insurer denies responsibility for the accident and you need to make a collision claim.
Insurance theory vs. reality
Theoretically, you should only have to notify the other party's insurer of your damages and injuries, take your car to a body shop, visit a doctor and expect the insurer to pay your bills.
But theories don't always reflect reality. Car insurance companies may demand that you obtain their authorization before proceeding with vehicle repairs and injury treatments. If the insurance adjuster doesn't authorize a repair before you take it to the auto shop, it can create a problem. At minimum, make certain that the insurance company has accepted liability before going ahead with repairs. Get that authorization in writing. Ask the insurer to e-mail it to you.
Remember that an insurance company can't force you to take your vehicle to a specific repair facility. Most states allow auto insurers to recommend auto body shops but they aren't allowed to demand you use a certain repair facility. The choice is yours.
Pick your insurance battles
The at-fault driver's insurer may tell you to seek payment from your own insurer because it has no evidence of its policyholder's fault. Although most states have made it illegal for an insurer to deny claims without reasonably investigating the facts, or to deny claims when its liability is reasonably clear, you may not want to fight the other person's insurance company.
If you make claim with your insurer, it might choose to fight the other insurance company for compensation if it finds other driver is at fault.
If you decide to fight the at-fault driver's insurer on your own you'll need a lawyer — especially if you've been seriously injured (read more about when to hire a personal injury lawyer). An attorney can help you navigate the sometimes-murky laws that govern insurance. But keep in mind that if you hire an attorney, he will take a cut of any settlement he helps you get.
When the other driver lies
You may have evidence of the other driver's fault — maybe he even admitted it at the scene — yet you find your claim denied by his auto insurance company. Why? Because he probably told a version of how the accident happened that doesn't square with yours. His insurer may stand behind that story in order to avoid paying your claim.
Sometimes the insurance company will take its policyholder's position, even if it contradicts the police report.
It not unusual for companies to take their policyholder's side in cases where no police accident report was made and fault isn’t obvious. In many states, if an officer at an accident scene determines the damage is minimal (usually less than $500), he or she will not file an accident report. Body shop estimates for that same accident, however, might run into the thousands of dollars. Take your car to a repair shop so you can determine the extent of the damage.
If it's a small claim, you can take the other driver to small claims court. Otherwise, you may need a lawyer. Insurance companies know that unless you've hired an attorney, the longer the matter drags on, the more likely you are to compromise or simply go away
Another option: Your own insurance company
Even if you're not at fault, you can make a claim with your insurance company for payment of damages and injuries -- if you have the right coverages
If you have collision insurance, file a claim with your own carrier. It will pay for the cost of repairs or total loss of your vehicle. If you take this approach, you will have to pay your collision deductible toward repairs. However, you may get that money back if your insurer is able to settle with the other driver's insurance company.
If it turns out the other driver is uninsured and you have uninsured motorist coverage property damage (UMPD), you can make a claim for your vehicle’s damage. There is no deductible for UMPD claims.
Your car insurance rates aren't necessarily going to increase at renewal time if you make a claim under your own insurance policy for an accident that wasn't your fault.
Most state laws prohibit insurers from surcharging policyholders or raising their premium rates for accidents in which they weren't at fault. However, those laws do not preclude your insurer from dumping your policy at renewal time if you've made a few recent claims of any type.
Dealing with injuries
Can't work? Totaled car? Get paid
If you miss work because of an injury you sustained in a car crash that was someone else's fault, you can expect that person's insurance company to pay for your lost wages. But their policy will have a limit on the amount you can recoup for lost wages.
If you're hit by a driver whose liability limits are not high enough to cover all of your medical expenses and lost wages, you can make a claim under your own uninsured motorist coverage for the remainder. If you live in a no-fault state, your PIP coverage will pay for your lost wages up to the limits of your policy.
When another driver wrecks your car beyond repair, his or her insurance company should pay you the actual cash value of your car before it was totaled. The industry standard definition of actual cash value is "replacement cost" minus "depreciation." Replacement cost is the amount of money it would take to replace your vehicle with a similar one. Depreciation is the amount of money your car has devalued over time.
The insurer also should pay for the sales tax on the new vehicle that you purchase with the insurance money. See what to do when your auto insurer totals your car for more information.
In most states you would make a claim for your injuries through the at-fault person’s auto insurer. If they are uninsured, you could make a claim through your own uninsured motorist bodily injury coverage, if you have it, or through your health insurance.
There are some states that require you to purchase personal injury protection (PIP) and have slightly different rules for collecting for your injuries after an accident. For example, your PIP coverage pays for your medical expenses and lost wages, even if you are not to blame for the crash. Receiving your PIP benefits requires you to make a claim under your own insurance policy. A deductible and/or copayment may be due when you use your PIP coverages.
This is commonly the situation in no-fault states — although the law differs in each one. Some no-fault states give you the option of contacting the at-fault driver's insurer to recover medical expenses not paid by your PIP. Your vehicle’s property damage would still be claimed through the at-fault party’s liability coverage in no-fault states (except Michigan where special rules apply).
According to the Insurance Information Institute, 12 states and Puerto Rico have no-fault insurance laws: Florida, Hawaii,, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota Pennsylvania and Utah. If you live in one of these states, it’s wise to check with your insurance agent, or your state insurance department, for the tips on how to handle third-party accident claims.
Reasonable rental cars
Insurance companies are always looking for ways to shave a few dollars from the cost of a claim, and reimbursements for rental-car costs often are the first to meet the blade.
Insurance companies often tell accident victims that they pay only a certain amount per day for rental cars. As a victim of another person's negligence, you have the right to recoup the costs associated with fixing the disruption you experience, including all of the costs of renting a vehicle while your own vehicle is being repaired.
To avoid having to pay for part of a rental, rent reasonably.. And don't purchase a collision damage waiver from the rental company if your own insurance policy extends coverage for damage to rental cars.
If you rent reasonably and the insurer wants to short-change you on rental reimbursement, ask the insurer to put its reason in writing. Insurers must inform you in writing of their decisions to deny or reduce payments.
Know what you deserve
Knowing your state's prompt-payment law is beneficial. Every state's unfair claims settlement practices act outlines the time frame in which an insurer must issue you a check for your damages. We have more on how your state’s Unfair Claims Settlement Practices Act can help you.
Laws vary widely from state to state, with many simply mandating a "prompt" payment of claims, while others specify a number of days and the interest owed to you if the insurer fails to pay within the specified period. One last factor to keep in mind: Unfair claims settlement practices acts often do not extend the same rights to you if you're making a claim against another driver's insurance as opposed to making a claim under your own insurance policy.
Writing a matter-of-fact letter to the at-fault person's insurance company is a smart way to inform it of your expectations and rights. Telling the insurer that you expect it to pay all reasonable costs you incur as a result of the accident, including payment for repairs to or the total-loss value of your vehicle, diminished value of your car, medical expenses, lost wages, pain and suffering and rental-car costs will highlight the insurer's responsibilities under public policy.
Make sure you keep a record of all correspondence, including dates and the names of customer service reps.