How Car Insurance Claims Work

In this guide

A car insurance claim is your request for the insurer to pay for a covered loss. You report the loss, an adjuster reviews what happened and the damage, the insurer decides whether and how much it will pay under your policy, and then it pays you or the repair shop. Which policy pays depends on whether you file against your own insurer (a first-party claim) or against the other driver's (a third-party claim).

First-party vs. third-party claims

Almost every claim fits one of two types, and the difference decides who pays and what rules apply.

Many accidents involve both. For example, you could use your collision coverage to get your car fixed quickly, then your insurer may try to recover its costs from the at-fault driver's insurer, sometimes returning your deductible if it succeeds. To see what each coverage does, read our guide to car insurance coverage types.

The claim process, step by step

1. Report the loss

Contact your insurer by phone, app or website. Give the basics: when and where it happened, who was involved, and the police report number if there is one. You'll be given a claim number and usually an adjuster or claims representative. If you're not sure what to do at the scene, start with our checklist on what to do after a car accident.

2. The insurer investigates

The adjuster reviews your policy, the police report, photos, statements and any witness information. They want to confirm that:

• Your policy was active and the driver and vehicle were covered
• The loss falls under a covered peril and isn't excluded
• Who was at fault, or what share each driver bears

The adjuster may ask for a recorded statement, and may inspect the vehicle. Answer honestly and stick to facts. Giving false information can lead to a denial or cancellation.

3. Damage is assessed

The insurer estimates repair costs. This may happen through a photo estimate in an app, an in-person inspection, or at a repair shop. If repairs would cost too much compared with the car's value, the car may be declared a total loss. See what happens when your car is totaled.

4. The insurer makes a decision

The insurer accepts the claim, accepts it in part, or denies it, and should explain its decision. If you disagree, you can challenge it. Our guide to how to dispute a car insurance claim decision covers your options.

5. Repairs and payment

Payment can go to you, directly to the shop, or to both you and a lender if the car is financed. Collision and comprehensive pay up to the car's actual cash value, less your deductible. Liability pays up to the at-fault driver's limits.

6. Closing the claim

Once repairs are done and payments made, the claim is closed. If hidden damage appears during repairs, the shop usually asks the insurer to approve a supplement. Keep your records even after the claim closes.

Who pays what: examples

• You hit another car and you're at fault. Your property damage liability pays for their car. Your collision coverage, if you have it, pays for yours, minus your deductible. Your bodily injury liability pays for their injuries, up to your limits.
• Another driver hits you and is at fault. You can claim against their liability coverage, or use your own collision coverage and let your insurer pursue them.
• A tree falls on your parked car. Comprehensive typically applies, minus your deductible.
• The other driver has no insurance. Uninsured motorist coverage, collision, or PIP may help depending on your state and policy. See uninsured and underinsured motorist coverage.

In no-fault states, your own PIP coverage generally pays your initial medical costs no matter who was at fault. Learn more in at-fault vs. no-fault states.

Repair shops and parts

Insurers often have a network of "direct repair" shops and may suggest one. The Insurance Information Institute (Triple-I) notes these programs can make the process faster, but you're generally still free to choose your own shop. The insurer might not agree to pay the same labor rates or parts as your chosen shop, so ask what your insurer will cover in writing.

Your insurer may specify the types of parts it will pay for, such as new original parts, aftermarket parts, or used parts. Rules about which are allowed, and how they must be disclosed, vary by state. Ask for the estimate to list the part types, and ask your shop whether they've concerns about fit or safety.

Rental cars and other costs

A rental isn't automatic. It's usually covered if you've bought rental reimbursement, or paid by the at-fault driver's insurer in a third-party claim, often with daily and total limits. Read our guide to rental reimbursement and roadside assistance. Other items you may be able to claim include towing and storage fees, depending on your coverage.

How long does a claim take?

It depends on how complex the claim is. A simple glass or minor collision claim can be settled quickly, while a crash involving injuries, disputed fault or a total loss may take much longer. Many states set deadlines for insurers to acknowledge a claim, request documents, and accept or deny it. The NAIC lists state insurance department contacts if you need to check the rules where you live.

Tips for a smoother claim

• Report the loss quickly and keep notes of each call, including the date, name and what was said.
• Take photos of damage before repairs, and keep all receipts.
• Get the settlement explained in writing, including how the car's value was calculated.
• Don't sign a release until you're sure injuries and damage are fully known.
• Ask what the claim may mean for your premium. Rate effects depend on fault and the insurer. See why your car insurance went up.

Frequently asked questions

Will filing a claim raise my rates?

It may, especially if you were at fault, but it depends on your insurer, state rules and your history. Some insurers apply surcharges only for at-fault claims. Ask your insurer or agent how claims are treated where you live.

Do I have to use the insurer's repair shop?

Generally no. Insurers may recommend shops, but you can usually choose your own. Check how your insurer will handle estimate differences if you do.

What is a claims adjuster?

An adjuster is the person who investigates a claim, reviews coverage and estimates damage. Staff adjusters work for the insurer. Independent adjusters are hired by insurers, and public adjusters are hired by policyholders and usually charge a fee.

What if the repair costs more than the estimate?

Hidden damage is common. The shop can ask the insurer to review and approve a supplement. Don't authorize extra work without confirming who is paying.

Can the other driver's insurer talk to me directly?

Yes, in a third-party claim they may contact you for information. Their insurer represents their policyholder, not you, so think carefully before giving a recorded statement or signing a release.

Sources

• Insurance Information Institute – Understanding the insurance claims payment process
• Insurance Information Institute – FAQs about direct repair programs and generic auto parts
• Insurance Information Institute – What should I do if I am having trouble settling my claim?
• NAIC – What Does Auto Insurance Cover?
• NAIC – State insurance departments