How Accident Claims Are Processed By Auto Insurance Companies

The last time that you talked to your insurance agent may have been when you got an auto insurance quote. You never thought you’d have to file an auto insurance accident claim. Understanding how an insurer processes an auto insurance claim will make the process easier.

If you have an accident, you should immediately call your insurance agent and report the accident. Ask to file an auto insurance accident claim. The agent will need some basic information, such as the time and circumstances of the accident, the other driver’s information and a copy of the police report. The agent will certainly want to know about the damage to the vehicles and any injuries caused by the accident.

Next, the claim will be assigned to a claims adjuster. This person will contact you. Minor claims may be handled by phone, but the adjuster may also want to meet with you. It is the claims adjuster’s job to determine what is covered by your policy. He can explain how the claim will be handled and answer your questions.

One of the issues decided by the insurer is which driver was at fault. It may be that the insurer assigns a percentage of fault to each driver. This is an important decision because it will determine which driver’s insurance pays for the damage. If a driver is found at fault, then his or her auto insurance quote may go up in the future. The adjuster will review the police report and the information that you gave to the agent and may interview witnesses or passengers. The insurer uses government regulations called “Fault Determination Rules” as a guide in assigning fault.

Your car will also be inspected by the claims adjuster, and the amount of damage will be determined. Alternately, you may be able to get estimates for the damage from a local auto body shop. If you have major damage, the insurance company usually pays the lesser of either the cost to repair the vehicle or the vehicle’s actual cash value. Actual cash value is the cost of replacing the car with a comparable model.

The insurer will also review any claim for injuries to persons involved in the accident. In addition, the insurer may ask you to have your employer verify your income and ask you to have a medical exam. The insurer will use this information to determine what coverage you have under your insurance policy for medical care and income replacement.

When you have an auto insurance accident claim, you may have to fill out forms, ask and answer a lot of questions and have a little patience. Still, you will be glad that you had auto insurance.

Allstate Experiences Spike In Texas Weather Auto Insurance Claims

Allstate Insurance reported on Tuesday, April 27, 2010 that its storm-related auto insurance claims in Texas increased 50 percent in 2009. The company is the largest publicly traded U.S. home and auto insurer and the 2nd largest auto insurer in Texas.

The cause for the increase in auto insurance claims was said to be severe weather, including: floods, wind, and hail. Texas experienced 2.45 billion dollars in catastrophe losses in 2009, the worst in the United States. Total catastrophe losses in the nation were reported at $10.57 billion.

The cities with the largest auto insurance claims from 2008 through 2009 were El Paso, with an increase of 2,613 percent; Lubbock, which spiked 1,849 percent; and Houston, which rose 857 percent. Major increases also occurred in Beaumont, which jumped 533 percent; San Antonio, which rose 302 percent; Midland-Odessa, which experienced a 102 percent increase; and Corpus Cristi, which elevated 93 percent.

Still, despite the extreme weather, Allstate said that some Texas cities actually experienced a decline in auto-related claims during the period. They include Tyler Longview, which plummeted 91 percent; Waco-Temple-Killeen, which dropped 89 percent; Amarillo, which fell 56 percent; and Abilene, which dipped 36 percent.

The major causes of weather-related damage to a car are storms, hail, and floods. Damage to a car during extreme conditions can be minimized or even eliminated if the owner takes precautions. For example:

Clean out your garage before a storm. Remember where water has risen in your neighborhood during prior storms and then don’t park in those areas.

Park your car in a garage before a hail storm. If you are unable to do this, then after a hail storm, check your car for dents and broken glass and clean away the glass from the interior to prevent possible damage to upholstery and fabrics. Wash the dirt off the vehicle before inspection to make it easier for the claim representative to see the damage.

After a flood, open the doors and windows to air out the vehicle

Remove items from the floor of the vehicle to give yourself space to blot out the excess water.

Don’t start your car after a flood. The water that could still remain on the car could cause electrical damage or cause some other dangerous condition.

Take pictures of any damages that you can present to the claim representative. Anything you feel is vital to the claim should be taken to the agent.

Monthly rainfall records caused by storms in March occurred in New York City; Boston, Massachusetts; and Providence, Rhode Island, which contributed to a rise in Allstate’s catastrophe auto insurance costs in the first quarter of 2010. Costs jumped to $648 million from $516 million during the same period last year.

Why It’s Good To Be Up-to-date On Information About Auto Insurance Fraud

In these hard economic times, incidents of auto insurance fraud are becoming increasingly frequent. People who are tight for cash go out become involved in a car accident, on purpose. Doing so ultimately leads to filing claims against the at-fault driver, and the criminals getting paid. In order to avoid being a victim of one of these scams, it’s important to know what is going on in the world of insurance fraud. Here are some tips on why all drivers should be up to date on information about auto insurance fraud.

Auto insurance fraud is considered a white-collar crime. These are crimes involve no violence, threats or weapons. Auto insurance criminals instead create staged accidents involving automobiles resulting in false auto insurance claims. Crime rings may have multiple people working together to do this. They create these accidents by abruptly stopping, causing a rear-ending situation, or quickly cutting someone off. These sorts of actions make the accidents appear to be the unsuspecting driver’s fault, meaning the criminals can file and collect on claims. In other scenarios, there are criminals that offer help to unsuspecting drivers at busy intersections. While one member of their team will wave ongoing drivers into traffic, another member waits to drive directly into the driver the other is supposedly helping.

Another type of auto insurance involves policyholders that intentionally cause additional damage to their vehicle after an accident has occurred in order to collect more money from the insurance company. Another type of popular form of auto insurance fraud practiced by criminal policyholders is staged theft. The insured may hire someone to steal their car and set it on fire, or disassemble it in a chop shop. This ensures that if any piece of the car is found the parts will be completely unusable. Stolen cars that are insured usually result in a payment from the insurance company. This payment usually helps to offset replacing the car. Realistically it will not be the exact price paid at the time of sale for the car. Claims entered on stolen vehicles usually pay the blue book value of the automobile. However, the criminal has it in their mind to collect whatever money they can.

When auto insurance companies are forced to pay out on false insurance claims, it hurts all their policyholders. Because money is going out of the company, they have to raise auto insurance quotes, premiums and rates in order to make it up. Listening to local and national news reports and reading driver safety blogs will help you be aware if you become a victim of fraud. Being informed may help not only you, but your insurance company and your fellow policyholders by catching these criminals in the act.

Does Having Auto Insurance Protect Me From Lawsuits

Having the right auto insurance can protect you from lawsuits. As a matter of fact, this is one of the major reasons for purchasing an insurance policy. We live in a litigious society where people sue each other without hesitation for the smallest things – and a motor vehicle accident is by no means a small thing. When you purchase auto insurance coverage through a carrier, they assume the role of protecting you in an accident. This means that if the other driver hires an attorney to sue you for injuries and vehicle damage, your insurance carrier will step up to the plate and defend those auto insurance claims that arise against you.

This means that your carrier will gather claim documents, investigate the circumstances of the claim and make a decision regarding your liability in the matter. If your insurance company determines that payment should be made to the claimant, it will negotiate a figure with the claimant’s attorney that will settle the matter. This is essentially the means by which insurance prevents you from being sued in court. However, people should understand that such protection against lawsuits is not bulletproof. You can still be sued following a motor vehicle accident, as you can be sued for almost any act of negligence today. If the other driver demands more money to settle the matter than the limits of your policy coverage, your personal assets can be the targets of the lawsuit. Drivers should be aware that at such a juncture, their insurance carrier might place them on notice that they have the right to retain counsel on their own.

This is why some insurance experts advise people to obtain the most insurance coverage they can afford. A high level of coverage can prevent the catastrophic lawsuit that results in the targeting of a defendant’s personal assets such as a home, car, investments and bank accounts. The more assets a person owns, the more the reason to purchase higher limits of insurance. Maintaining adequate policy limits is one means of avoid being sued. Another means to prevent being sued is to comply with the conditions of your policy. This means using the car for the purpose for which you told your insurance carrier you would be using it. If you stray from these conditions, you may open the door to being sued (despite the existence of coverage on your part).

Perhaps the most important thing to remember is there is no such thing as a silver bullet’to protect you from auto-related lawsuits. However, policyholders can enjoy peace of mind knowing that driving prudently, maintaining adequate coverage limits and following the conditions of their policy helps them avoid it.

Reality Show Spotlighting The Nation’s Most High-risk Drivers

America’s Worst Driver’ is coming to the Travel channel in 2010. Joining the latest craze of reality television, the show seeks to depict America’s worst drivers and people who cause auto insurance companies to cringe. Drivers selected for the show will become contestants to compete and determine who is the worst driver in the city. The first city on the list is Miami. In order to entice participants to be on the show, they will be eligible for prizes including free vacations and free gasoline. Participating cities for the show include Miami, Los Angeles, New York, Seattle, Dallas, San Francisco, Chicago and Boston.

According to the Miami Herald, ‘Contestants in the reality show competed in obstacle courses and driving challenges, with the worst driver losing his or her car at the end in a ball of flames.’ Every week, proven bad drivers will compete in several different road tests aimed at identifying who is that particular city’s worst driver. Seven out of eight of the participants deemed to be the worst drivers will receive a new car. This could prove costly to them, however, since they are at the top of the auto insurance risk rates. If they are truly horrible drivers, they could also pose serious risks to themselves and other drivers. A new car certainly will not help this situation. However, the show is not geared toward improving the participants’ driving skills, only at demonstrating the awful driving of these people. At the end, the absolute worst driver gets a lifetime bus pass rather than a new car. This might help reduce some auto insurance claims.

Based on a recent GMAC Insurance study, Washington ranks as second in the United States for states with the worst drivers. Florida ranked 40th, California was 14th, New York was 47th, Texas was 24th, Illinois was 22nd and Massachusetts was 48th. If these rankings are accurate, the show chose a vast array of cities to represent states from the top to the bottom of the scale. If they truly wish to look for America’s worst drivers based on this ranking, they should hold casting calls in Oregon, which came in as the number one state in the United States for America’s worst drivers.

The show might sound interesting. Unfortunately, the backlash from this type of show could have extremely negative consequences. Auto insurance companies could potentially raise rates in certain areas if enough ‘worst’ drivers prevail. The ‘winners’ of the show with new cars will still be classified as an auto insurance risk, but now face even more expensive auto insurance rates with new vehicles. Only time will tell if this new reality show will be a success.

October: The Month Of Auto Insurance Claims

October has arrived, and for auto insurance companies, so has the month that results in an increased number of claims. The fall months typically come along with a very high number of accident claims, and none more so than October. According to some estimates, over 10 percent of all auto insurance claims are filed in this month, and for several reasons.

The changing weather that hits most of the country in October brings a host of new road conditions that motorists aren't used to. In areas of the U.S. that receive freezing rain, snow or more persistent rainfall, the autumn can be something of a shock to those on the roads. It's easier to lose control of a vehicle in these conditions, leading to accidents and, of course, auto insurance claims. Fall is also the time of year where teenagers and college students, many of them drivers, return to school and begin to drive in conditions and at times that they might not normally drive. The changing seasons also lead to more instances of driving in the dark or driving into the sun with a dangerous glare coming through a car's windshield. This can temporarily blind a driver and cause an accident. Animals like deer begin to also become more prevalent in October, before hunting seasons start. These large animals can cause serious accidents in cases where drivers aren't paying careful attention to the roads and their surroundings. The danger is diminished as drivers become accustomed to the changes, but in the meantime the roads can be a dangerous place.

Even if one driver does pay sufficient attention, another driver can easily cause an accident spurred by one of the changes of the fall season. Any accident results in an auto insurance claim, and any claim results in a higher auto insurance rate for the driver.

As these additional claims are costly both to policyholders and to insurance companies, the auto insurance industry tries to urge drivers to take special care when the seasons change. The fall season can be a dangerous time to drive and it's essential to follow good defensive driving technique during these months. The most effective driving during this time requires watching out for new road hazards brought by autumn. To guard yourself, consider taking a defensive driving course. This can help a motorist drive safely all year round, and may even lead to an auto insurance discount the insurer is notified.

Remember – a single auto insurance claim can greatly increase auto insurance rates. So, it's well worth the time to adjust to safer driving habits in the fall and winter, both for a driver's safety and for his or her auto insurance budget.

Florida Auto Insurance Scheme Busted

As America’s economic downturn continues to make its way onto headline news, many are attempting to pad their own pockets by preying on the desperate through faulty auto insurance claims, including a Florida crime ring that was recently brought to justice. The ring targeted people who were desperate to make their car payments or unload their expensive cars. The scheme promised to get rid of the cars for a cost, and told owners to report the vehicles as stolen and subsequently file auto insurance claims. However, the group then sold the expensive cars at low prices and outfitted new buyers with faulty titles, insurance cards, and registrations.

Thanks to Florida police, some arrests have already been made and detectives have recovered 33 cars, although authorities are still searching for 27 vehicles and a person of interest. Although the Florida case might be the most recent car insurance fraud scheme to hit the news, it certainly isn’t alone. Fraudulent car insurance claims are on the rise because of the worsening economy, according to ABC News, driving desperate drivers to go as far as lighting their own cars on fire.

According to ABC News and Insurance Research Council, car insurance fraud is a risky practice that poses potential danger to everything from a person’s physical safety to car insurance policy holders’ economic security, including fluctuating auto insurance rates. Car owners who attempt to rid themselves of expensive vehicles by setting them on fire or otherwise destroying them can suffer physical damage, like one Nevada man whose attempt at fraud resulted in second and third degree burns. Insurance fraud is also a crime, which can result in jail time for the perpetrator. Perhaps more damaging to the car insurance industry as a whole, however, is the fact that car insurance fraud, including fraudulent car insurance claims, make auto insurance rates increase for millions of U.S. drivers.

According to ABC News, car insurance claim payouts increased by $4.8 to $6.8 billion as a result of fraud in 2007. And because car insurers must recoup what they’ve lost, this means auto insurance rates have been on the rise for drivers everywhere. Other costs of car insurance fraud include the fact that drivable cars are being taken out of the market, meaning higher prices for used and new vehicles everywhere. Although stopping car insurance fraud is the job of law enforcement, it is important to note that the cost of failing to make car insurance payments is lower than the cost of committing car insurance fraud.