What Does Insurance Cover After an Accident Not Your Fault?

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It was quite unexpected! You were hit by another driver. It was a terrible accident, but now it is time to file a claim.

It can be time-consuming and frustrating to work with your car insurance company after an incident. Imagine what it would be like to work with an insurance company for someone you don’t know that hit your car.

What is a Third-Party Claim?

These are some helpful tips to help you keep your cool and your sanity when filing a claim against another auto insurance company. This is called a third-party claim. You can only make a claim with your insurer as a first-party.

You typically file a third party claim if you are in an accident in a state that is “no fault” and the accident was not your fault.

You are not at fault and the state-mandated liability coverage of the other driver would usually cover damage to your vehicle and property, as well as your medical bills, up to the limits of the policy. You would file a claim with the insurance company you have in no-fault states regardless of who caused the accident.

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Collect the necessary information

You are responsible for notifying your insurance company about the collision. But, you should also contact their insurance company. Many drivers who cause an accident are reluctant to report it.

It is vital to obtain all information about the other party at an accident scene. The following information should be collected:

  • Name and address of another driver
  • Name and policy information of another driver’s insurance company
  • Witnesses’ statements and contact information
  • Photograph the accident scene using your smartphone camera. It is best to take photos of the cars sitting right after an accident. You can also take photos of any damage to the vehicles if you have to move them due to safety concerns.

To support your claim on the accident’s cause, you will need all evidence from the scene.

You should check to see if the car insurance company offers a mobile app that allows you to document the accident on the spot. Some of the best car insurance companies 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.

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The National Association of Insurance Commissioners’ also offers a Wreck Check auto-accident checklist that you can print out and keep in your car. You can use your smartphone to collect and exchange the correct information.

If you’re unable to take photographs, it can be helpful to draw the scene or the location of the cars. You can also use Google maps satellite images to show the location of the accident site or intersection. This may help you understand how it happened. If you have a dashcam, make sure you save any footage from the accident so that you can share it with your insurance company. This is especially important if the other driver refuses to take responsibility.

Notify the right people

First, notify the other driver’s insurance that you were involved in a collision with one of their policyholders. It’s best to only relay the facts of the accident. Even if you think the other driver is at fault, it’s not wise to simply say so. Instead, provide the facts to the insurance company. This will show them that their driver is responsible and liable for your damages.

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For ticketing purposes, the police will determine who was at fault. The insurer will determine fault independently, and this may differ from the law enforcement’s. The police report, witness statements, and physical evidence will all be considered by the insurer. (Here’s more on what to do after a car accident.)

Even though you may believe that you did not cause the accident, it is worth contacting your insurance company. This establishes your good-faith accident-reporting effort and can aid you if the other party’s insurer denies responsibility for the accident or it turns out their insurance was not valid at the time of the incident and you need to make a collision claim.

Theoretically, all you need to do is notify the other party’s insurance about your injuries and damages, take your vehicle to a body shop and visit a doctor (if necessary) to expect your insurer to pay your bills.

However, theories do not always reflect reality. Some car insurance companies might require you to get their approval before you proceed with vehicle repairs or injury treatment. It can be a problem if the insurance adjuster refuses to authorize the repair before you bring it to the auto shop. Before you begin repairs, ensure that your insurance company accepts liability. This authorization should be in writing. Ask your insurer to send it to you.

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An insurance company cannot force you to take your car to a particular repair facility. While most states allow auto insurance companies to recommend body shops, they cannot force you to use a particular repair facility. You have the freedom to choose.

Choose your battles carefully

Insurers of the at-fault driver may tell you to get payment from your insurer because they don’t have any evidence that it was responsible. You may not want the insurance company representing the other driver to sue you.

Your insurer will likely choose to pursue the other insurance company for compensation, if the insurer finds the other driver at fault.

A lawyer is necessary if you want to sue the at-fault driver’s insurance company on your own, especially if you have been seriously injured. An attorney can help you navigate through the often-complicated laws that govern insurance. Keep in mind, however, that an attorney will get a cut of any settlements he assists you with.

You might have evidence that the other driver was at fault, or he may have admitted to it on the spot. However, your auto insurance company denies your claim. Why? Because he may have told a different version of what happened to you. To avoid paying your claim, his insurer might back that story.

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Sometimes, the insurance company will accept the position of its policyholder even if the police report contradicts it.

Companies will often take the side of their policyholders in situations where there is no police accident report and no fault. If an officer on the scene of an accident determines that there is little damage (usually less $500), they will not file an accident record. However, estimates from a body shop for the same accident could run into the thousands. To determine the extent of damage, take your vehicle to a shop for repair.

You can bring the other driver to small claims court if it is a minor claim. A lawyer may be required if you have a larger claim. Insurance companies know that the longer a matter drags on without an attorney, the more likely it is for you to compromise or just go away.

If all else fails look to your insurance: When can you file a claim with your own carrier?

Even if your fault is not apparent, you can file a claim with insurance to receive payment for damages or injuries.

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If you have collision insurance, file a claim with your own carrier. This will cover the costs of repairs and total loss of your car. If you take this approach, you will have to pay your collision deductible toward repairs. If your insurer can settle the matter with the other driver, you could get your money back.

If the other driver is not insured and you have uninsured property damage (UMPD) coverage, you can file a claim for the vehicle’s damages. UMPD claims usually have no deductible.

If the accident was not my fault, will my insurance company raise my premium?

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.

Insurers are prohibited by most state laws from charging policyholders for additional premiums, or increasing their rates for accidents they were not at fault in. If you have made any recent claims, these laws don’t preclude your insurer dumping your policy at renewal.

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Can’t work? Can’t work? Get paid

You can ask the insurance company of another person to cover your lost wages if you are unable to work due to an injury sustained in a car accident. However, your policy will limit the amount that you can recover 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 underinsured motorist coverage for the remainder, if you have it. If you live in a no-fault state, your PIP coverage will pay for your lost wages up to the limits of your policy.

If another driver causes damage to your car beyond repair, your insurance company should pay the actual cash value of the car. Industry standards define actual cash value as “replacement cost” less “depreciation”. The replacement cost is the cost to replace your vehicle by a comparable one. Depreciation refers to the value of your vehicle over time.

Your insurer should also pay the sales tax for any new vehicle you buy with your insurance money. See what to do when your auto insurer totals your car for more information.

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Understand your injury coverage

Most states allow you to file a claim through the at-fault party’s auto insurance. You could file a claim through either your uninsured motorist bodily injuries coverage or your health insurance if they are not insured.

Some states require personal injury protection (PIP). They also have different rules regarding how to collect for injuries sustained in an accident. Your PIP coverage covers your medical expenses and lost earnings, even if the accident was not your fault. To receive your PIP benefits, you will need to file a claim under your insurance policy. You may have to pay a deductible or copayment if you use your PIP coverages.

This is common in no-fault countries, although each state’s law may differ. You may contact the insurer of the at-fault driver to seek reimbursement for medical expenses that were not covered by your PIP in some states. Your vehicle’s property damage would still be claimed through the at-fault party’s liability coverage for no-fault states (except Michigan, where special rules apply).

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The Insurance Information Institute reports that 12 states and Puerto Rico have no fault insurance laws. These include Florida, Hawaii and Kansas. It is a good idea to consult your insurance agent or state insurance department if you reside in any of these states for information on handling third-party accidents claims.

Rent reasonable

Insurance companies are always looking to cut costs. Rental-car reimbursements are often the first to be considered.

Many insurance companies tell accident victims that they only pay a fixed amount per day to rent cars. You have the right to recover the damages caused by another person’s negligence. This includes the cost of renting a car while your vehicle is being repaired.

Rent reasonably to avoid paying for a portion of the rental. If your rental policy covers damage to rental cars, don’t buy a collision damage waiver.

If the rent is reasonable and the insurer wants you to pay less for rental reimbursement, the insurer should inform you in writing. Insurers must notify you in writing if they decide to reduce or deny payments.

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Get what you are due

It is helpful to know the prompt-payment laws in your state. The time period in which you must receive a check from your insurer is determined by the state’s unfair claim settlement practices act. We have more on how your state’s Unfair Claims Settlement Practices Act can help you.

The laws vary from one state to the next. Some require prompt payment of claims while others set a time limit and interest due if the insurer does not pay within that period.

Remember one last thing: Fair claims settlement practices Acts often don’t give you the same rights if you make a claim against an insurance policy of another driver.

It is smart to write a matter of fact letter to the at-fault party’s insurance company to explain your expectations and rights. The insurer will be reminded of its public policy responsibilities by stating that it must pay for all costs incurred as a result.