Revised June 2018 Show
Table of Contents
IntroductionDriving on California's highways can be a risky proposition. Whenever you are in a vehicle, there's a risk of being involved in a traffic accident. Whether it's a small "fender bender" or a major injury accident, knowing in advance what to do can help you avoid costly mistakes. This guide discusses what to do after an accident and what to expect when you file a claim with your insurance company. For your convenience, an accident checklist is contained herein which can be kept in your vehicle for future reference. When purchasing insurance, carefully review the application before signing to determine if the coverages, policy limits, and deductibles are suitable for your needs. After you receive the policy, review the declaration page. It contains important information about the covered drivers, identifies the vehicles insured, as well as the coverage limits amounts and deductibles. Make sure the information is correct and the coverage is what you purchased. If changes are needed, send your request to your agent and or insurance company in writing and keep a copy. Use certified mail return receipt requested to verify receipt of your documents. Become familiar with your automobile insurance policy so you will understand it before the need arises to file a claim. Read the policy thoroughly so you know what is covered and what is excluded. Back to Top What to Do If There Is an AccidentQ. What should I do at the scene of an accident?A. STOP Immediately and move only if it is safe to do so.
FREQUENTLY ASKED QUESTIONSQ. What happens after I file the claim with my Insurance company? A. Your insurance company will contact you for detailed information regarding the loss and may take a a written or recorded statement. An examination under oath can sometimes be requested. As part of the investigation, other drivers and witnesses may also be contacted. If you have medical payments or an uninsured motorist claim, you must provide documentation of your loss (injuries, medical expenses, lost wages, etc.). Q. What should I do if the insurance company does not contact me? A. A claim representative should contact you within a reasonable period of time after you report the loss. However under certain circumstances, the insurance company can take up to 15 days to contact you. If you do not hear from anyone, call your agent or insurance company for assistance. If they are not responsive, or you believe there is an unreasonable delay in settling your claim, contact the Department of Insurance. Q. How does the insurance company evaluate vehicle damage? A. A qualified adjuster or appraiser usually inspects the vehicle damage. The adjuster or appraiser then writes an estimate based on the initial inspection. If further damage is found during the repair process, the shop will contact the insurer to get approval for the additional cost of repairs. Keep in mind the insurer may send out an adjuster to re-inspect the additional damages. If the damage is relatively minor, the company may instead ask you to submit competitive repair estimates. Remember, it is your responsibility to sign and authorize the shop to repair your vehicle once you are satisfied with the final estimate and repair facility. Q. What will the company pay on a physical damage claim under a standard auto policy? A. Generally, the company will pay the lesser of the following:
Read your policy to determine what is covered. Pay particular attention to exclusions and limitations. For example, there is usually no or limited coverage for enhanced aftermarket stereo equipment, telephones, or tires and wheels unless it is Original Equipment installed by the automobile Manufacturer (OEM). Additional coverage is usually available for such installed equipment at an additional charge. Q. What is actual cash value (ACV)? A. Actual Cash Value - Unless otherwise defined in the policy, actual cash value in California means fair market value. The fair market value of an item is the dollar amount that a prospective buyer and seller are willing to pay and are reasonably knowledgeable about the asset. They must be behaving in their own best interest and free of undue pressure to transact. Q. What is an appraisal provision? A. Most standard policies contain an appraisal provision, which can be helpful in the event there is a dispute regarding the amount being offered by the insurance company on a total loss settlement of your vehicle. Read your policy to see if it contains one. Under this provision, either of you can demand an appraisal. Each party selects a competent appraiser. The appraisers then select a neutral umpire. If the appraisers cannot reach a mutually agreed amount, their differences are submitted to the umpire. An amount that any two agree upon is binding. Each party pays its own appraiser; the umpire fee is shared. Q. How is the check or draft prepared? A. The check can be issued in the name of the insured and any lienholder, such as a bank or finance company. If the vehicle is deemed repairable, the company may also include the repair facility as a payee. Q. Who is responsible for the balance of a car loan? A. The borrower is responsible for the balance of the loan, even if the vehicle is stolen or damaged beyond repair. If your claim payment is less than the loan balance, the lender will expect you to pay the difference. Coverage commonly referred to as “gap” insurance can usually be purchased to protect against this situation. Q. Will the insurance company pay for a rental car while mine is being repaired? A. Yes, if you have purchased rental vehicle coverage. Review your policy before you rent a vehicle. Although policy limits vary, the company pays up to a specified amount per day for a specified number of days. The coverage ends when your vehicle is repaired, the loss is paid or after the specified period, whichever comes first. If your vehicle is stolen, the policy may automatically provide transportation expenses. Again, review your policy to be sure. This type of coverage usually begins 48 hours after the theft and ends when your vehicle is recovered, the loss is paid or after a specified period, whichever comes first. Q. What is a collision damage waiver and will the insurance company pay these charges for the rental vehicle? A. The terms of the rental agreement make the customer responsible for collision damage while he or she has possession of the vehicle. Additionally, rental companies insure themselves for damage to the vehicle caused by collision. For an additional fee, the rental company will waive all or a portion of the customer's obligation to pay repair costs for damage to the vehicle caused by collision. Both the amount of the fee and the language of the waiver vary. Coverage for collision damage to the rental car under your personal automobile policy depends upon the policy language. Read your policy carefully. Ask your agent or company before you rent a vehicle.Q. What is the salvage value?A. This is the remaining value of your damaged vehicle if your vehicle is determined to be a total loss. It is usually determined through bids from salvage buyers. The company may sell the salvage to the highest bidder. However, it is not obligated to do so. If you decide to keep the damaged vehicle, the highest salvage bid may be deducted from your settlement. In effect, you are "buying back" your vehicle for the salvage value. If you retain possession of the salvaged vehicle, it is your responsibility to file a salvage certificate with the Department of Motor Vehicles.Q. What is subrogation?A. Subrogation is the right of the insurance company to recover from a third party the amount of damages it paid to you. For example, if another party is at fault in an accident that damages your car, and you have a collision claim, your company will ask the other party to reimburse the money it paid on your claim. The policy requires your cooperation with the company's subrogation efforts. Also, you cannot do anything that jeopardizes the company's right of recovery. For example, you cannot sign an agreement releasing the other party in exchange for payment of your deductible. Back to Top Q. What is the salvage value? A. This is the remaining value of your damaged vehicle if your vehicle is determined to be a total loss. Q. What is subrogation? A. Subrogation is the right of the insurance company to recover from a third party the amount of damages it paid to you. For example, if another party is at fault in an accident that damages your car, and you have a collision claim, your company will ask the other party to reimburse the money it paid on your claim. The policy requires your cooperation with the company's subrogation efforts. Also, you cannot do anything that jeopardizes the company's right of recovery. For example, you cannot sign an agreement releasing the other party in exchange for payment of your deductible. Q. Is the insurance company required to help me recover my deductible? A. Yes and no. The insurance company must advise you as to whether or not they intend to pursue subrogation. If the company pursues subrogation, they are required to include your deductible as a part of the process. However, if the company does not pursue subrogation they are required to advise you of that fact so that you may pursue your deductible on your own. If their efforts are successful, in whole or in part, most companies will reimburse you in accordance with the recovery. For example, if 100 percent of the paid claim is recovered, you will receive 100 percent of your deductible; if the recovery is 65 percent, you will receive 65 percent of your deductible. Any expenses or fees (e.g., legal fees, incurred by the company in its recovery efforts) will be apportioned between the company and you, if recovery is made. However, if you choose not to have the company include your deductible in its efforts, you can seek recovery directly from the other party on your own. But before you do, discuss the matter with your insurance company to avoid jeopardizing its recovery. Q. Is the car covered outside of California? A. Most policies provide coverage in other states, U.S. territories and possessions, and Canada. As is the case in California, many other states and territories have enacted financial responsibility laws requiring drivers to carry a specified amount of automobile insurance to cover losses resulting from ownership or operation of a motor vehicle. If the financial responsibility requirements where you are traveling are higher than your policy limits, your company will meet the higher requirements. Most policies do not provide coverage in Mexico, so if you plan to drive your car there, it's wise to buy that coverage separately. Check your out-of-state coverage before you travel. California's financial responsibility law is set forth commencing with Section 16020 of the California Vehicle Code. Among other things, it requires all drivers to be able to pay damages resulting from ownership or operation of a motor vehicle. Drivers must show ability to pay damages (financial responsibility) of a minimum of $15,000 for each person injured or killed in an accident, $30,000 for injury/death of two or more persons in one accident, and a minimum of $5,000 for property damage in any one accident. If you are cited by a peace officer for a moving violation, or are involved in an accident, you may be asked for written proof of financial responsibility. This can be done by recording the name of your insurance company and policy number on the vehicle registration card issued by the DMV. This proof of insurance should be kept in the vehicle or a place where it will always be available when driving. For further information, contact the California Department of Motor Vehicles. Q. What should be done if you are served with a lawsuit (Summons and Complaint) as a result of an accident? A. Notify your agent and insurance company immediately. Keep a copy for yourself and mail or deliver the original documents to your company. Do not give statements or discuss the accident with anyone except a verified representative of your company. If the lawsuit arises out of a covered loss, your company will provide legal defense. Q. Is a newly acquired vehicle covered? A. Most policies provide automatic coverage for a vehicle that replaces a vehicle already on your policy. The coverage normally is the same coverage you had on your previous vehicle. Notify your broker-agent as soon as possible of any replacement vehicle. If you wish additional coverage, there is usually a requirement that you notify your agent or your company within a designated time period. Most policies also provide automatic coverage for a newly acquired vehicle that is an addition to the vehicles you already have on your policy. There are usually specific conditions that must be met. Most automatic coverage provisions require that the insured notify the insurer within 30 days of acquiring the new vehicle if the insured wants it covered under the existing automobile policy. Be aware that some policy notification periods can be less than 30 days. Some insurance company’s notification periods are 14 days or less. If the insured fails to notify the insurer of the newly acquired vehicle within the specified time, the vehicle will be uninsured. Unless there is a specific notice procedure in the insurance policy, an insured’s verbal notice to his or her insurance agent can be deemed sufficient to trigger the automatic coverage for a newly acquired vehicle. Back to Top THINGS TO AVOID
Important Tips
Your Rights Under the Fair Claims Settlement Practices RegulationsIn general, insurance companies are required to do the following:
The above represents a paraphrased brief overview of some of the Fair Claims Settlement Practices Regulations. Back to Top Automobile Insurance FraudAutomobile insurance fraud in California historically has taken several forms. The most common fraud schemes involve automobile property and automobile accidents. Automobile Property - This type of fraud most often involves dishonest auto body and repair shops and/or insureds who may employ a variety of illegal or questionable techniques including:
It is always important for the consumer to review carefully all paper work from auto body and repair shops in order to protect against potential fraud. Also, consumers should be cautious of any auto body or repair facility that makes referrals to medical or legal offices. This practice may be an indicator of “capping.” Capping (a felony in California) is the illegal referral of clients to legal offices for a fee. Automobile Accidents - Automobile fraud often involves organized auto accident rings. Staged auto accidents, which are not accidents at all, follow several basic schemes including:
If you have been in an auto accident, be cautious of any unsolicited referral to a body shop, law office or medical office. Organized accident rings and cappers actively solicit others in the community to participate in the creation of accidents. Often these accidents only exist on paper (referred to as paper accidents), and no innocent parties are involved. Paper accidents have gained in popularity among fraud perpetrators, as they are less dangerous from a bodily injury standpoint, and there is less likelihood of police involvement. Back to Top Auto Body Repair ShopsUnder California Insurance Code §758.5 an insurance company cannot require that an automobile be repaired at a specific repair shop. However, an insurance company can recommend that an automobile be repaired at a specific repair shop under the following conditions outlined by law:
If the vehicle is repaired in a shop chosen by the consumer, then the insurance company must pay the reasonable costs to repair the vehicle made in accordance with accepted trade standards for good and workmanlike automotive repairs.
Auto Replacement PartsIn some cases an auto repair may include replacement of damaged parts with after-market parts. After-market parts are parts which are not made by the original manufacturer. After-market parts may be equal or better in quality than (OEM) original equipment manufacturer parts. Although non-original equipment manufactured replacement parts can be used to repair your vehicle, any such part must be comparable to (OEM) original equipment manufactured parts in terms of kind, quality, safety, fit and performance. Consumers should take note of the following:
Back to Top Consejos importantesA quick overview for our Spanish readers. So you've had an Accident, What Next?
Talk to the Department of InsuranceWe are the state agency that regulates the insurance industry. We also work to protect the rights of insurance consumers. Contact the California Department of Insurance (CDI):″
Back to Top Call: Consumer Hotline 1-800-927-4357 TDD 1-800-482-4833 Write: California Department of Insurance 300 South Spring St., South Tower, Los Angeles, CA 90013 Visit us in person: 300 South Spring St., South Tower, 9th Floor, Los Angeles, CA 90013 8:00 AM to 5:00 PM, Monday to Friday, except holidays Back to Top What happens if I'm at fault in a car accident California?If you live in a fault state, the person responsible for the accident will hold liability for anyone's injuries. The other driver would file a claim with your insurance company, and you or your car insurance will pay for losses.
How long does at fault accident stay on record California?Collisions will be reported for 3 years from the collisions date. If a collision was reported by law enforcement and the record contains a commercial vehicle or hazardous materials indicator, the collision will be reported for 10 years from the collision date.
How long does at fault accident affect insurance in California?Generally speaking, accidents will stay on your record for three to five years. However, if you were not at fault, you may be able to get the accident removed from your record sooner. You can also take steps to improve your driving record, which will help offset the impact of an accident.
How long does an insurance company have to determine fault California?How long does an insurance company have to determine fault? California law gives insurance companies 40 days to investigate a claim. If the company needs more time, it must notify you every 30 days. Once a determination is reached and agreed to, payment must be issued within 30 days as well.
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