How to File and Settle a Claim
If you are involved in an accident:
Obtaining repair estimates
If you are involved in an accident:
• Write
down the names of any other drivers involved, their insurance companies, policy
numbers, and the license plate numbers.
• Write down the name, address, and phone number of any independent witness to the accident. This is very important.
• Write down the name, address, and phone number of any independent witness to the accident. This is very important.
•
Call your agent or the claims processing number listed in your policy.
•
Call the other driver’s insurance agent or company if you want to file a claim
against the other driver’s policy.
Obtaining repair estimates
Your
insurance company cannot require you to have your vehicle repaired at a
specific repair shop. You may choose your own repair shop; however, the
insurance company may require you to have one or more estimates, and if your
shop is not the low bidder, you may be responsible for paying the difference.
If your insurance company requires more than two estimates, it must pay for the
additional estimates.
The
insurance company has a right to inspect your vehicle, although it is not
required to do so. The company cannot require an inspection at a claims center
solely under its control, but it can require you to drive to one of the
company’s “preferred” repair shops so long as it is within a reasonable
distance.
The
quality of the repair
Your
company must restore your vehicle to the condition it was in before it was
damaged. Any parts replaced on your damaged vehicle must be original equipment
(OEM) parts, unless you agree to “after market parts” (those parts not made by
your vehicle’s manufacturer). The OEM parts do not have to be new, however, if
your vehicle was not new at the time it was damaged.
Two
terms used in association with vehicle repair can affect the settlement of your
claim: “betterment” and “depreciation.”
Betterment
means that your vehicle is better than it was before it was damaged; the
insurance company can reduce your settlement only if your vehicle’s resale
value has increased over what it was before the accident. Generally, the
company will deduct the difference between the cost of a used part (appropriate
for the age and condition of the vehicle) and the cost of the new part.
Betterment is considered only for major parts such as transmissions, engine
blocks, etc. Items such as fenders and tires do not generally increase the overall
resale value enough to merit a betterment reduction.
Depreciation
refers to a reduction in your settlement based on the age or use of a part
being replaced. Certain parts on your vehicle have a “life expectancy” and an
insurance company may take this into consideration. For example, if a tire on
your car is expected to last 60,000 miles, and it had 30,000 miles on it at the
time of the accident, the insurance company may pay only 50 percent of the cost
for a new tire.
Disagreements
over claims
The
insurance company has two options for meeting its requirement to return your
vehicle to its pre-accident condition. The company may assume all costs to repair
your vehicle satisfactorily, or it may offer a cash settlement to pay for
satisfactory repair.
In
both cases, satisfactory repair includes repair of all obvious and hidden
damage caused by the incident. If you disagree with the insurance company about
whether it has met its requirements under the law, you should first speak with
the adjuster assigned to your claim or his or her supervisor. If you are unable
to resolve the issue, you may contact the Department of Commerce Consumer
Response Team at 651-296-2488 or toll free 800-657-3602. The CRT will attempt
to resolve the matter informally. If it cannot be resolved in this way, you may
be asked to send a letter to the Department to begin a formal investigation, or
the CRT may inform you of your right to pursue action in small claims court or arbitration
as outlined in your policy.