Table of Contents
- Introduction
- Immediate Actions After a Car Accident
- Frequently Asked Questions About Claims
- Common Pitfalls to Avoid
- Essential Tips for Car Accident Preparedness
- Understanding Your Rights: Fair Claims Settlement
- Staying Vigilant Against Insurance Fraud
- Choosing the Right Auto Body Repair Shop
- Understanding Auto Replacement Parts
- Quick Guide in Spanish: What to Do After an Accident
- Contacting the Department of Insurance
Introduction
Driving in California, while often scenic, comes with inherent risks. Car accidents, from minor fender-benders to serious collisions, are unfortunately a reality. Knowing precisely how to react after an accident is crucial to protect yourself from further complications and costly errors. This guide provides a detailed breakdown of the steps to take following a car accident and what to anticipate when filing an insurance claim.
For your convenience, we’ve included a downloadable accident checklist that you can keep in your vehicle for quick reference.
When selecting car insurance, it’s vital to carefully examine your application before signing. Ensure the coverage options, policy limits, and deductibles align with your specific needs. Upon receiving your policy documents, thoroughly review the declaration page. This page contains critical details about insured drivers, vehicles covered, coverage limits, and deductibles. Verify all information is accurate and matches your purchased coverage. If any corrections are needed, submit your request in writing to your agent or insurance company, and retain a copy for your records. Consider using certified mail with return receipt requested to confirm document delivery.
Familiarize yourself with your auto insurance policy before you need to file a claim. Understanding your policy details—what’s covered and what’s not—is essential for peace of mind.
What to Do If There Is an Accident
Q. What are the first steps to take at the scene of a car accident?
A. Immediately STOP and move your vehicle only if it’s safe to do so.
- Emergency First: Dial 911 if anyone is injured.
- Police Notification: Contact the police. While response policies vary by location and accident severity (some agencies may not respond to accidents on private property), attempting to notify them is important. Also, remember that most insurance policies require police notification within a specific timeframe, especially for hit-and-run incidents.
- Information Exchange: Collect the following information from all drivers involved:
- Full names, addresses, and phone numbers.
- Driver’s license numbers.
- License plate numbers and Vehicle Identification Numbers (VINs). Verify accuracy by checking driver’s licenses and vehicle registrations.
- Witness Information: Gather names, addresses, and phone numbers of any passengers and witnesses.
- Document the Scene: If possible, use a camera or cellphone to photograph vehicle damage and the accident scene, including traffic signals and any visibility obstructions.
Alt Text: Photograph of a car accident scene showing two damaged vehicles, emphasizing documentation for insurance claims.
- Unattended Vehicle/Property: If you can’t locate the owner of damaged property or another vehicle, leave a note with your name, address, and contact information, as well as details of the vehicle you were driving.
- Insurance Notification: Immediately inform your insurance agent and/or insurance company about the accident.
- DMV Reporting: In California, you are legally required to report the accident to the Department of Motor Vehicles (DMV) within 10 days if anyone is injured or if vehicle damage exceeds $750. Failure to notify the DMV can lead to the suspension of your driver’s license.
FREQUENTLY ASKED QUESTIONS
Q. What happens after I file a car insurance claim?
A. Your insurance company will reach out to you to gather detailed information about the accident and your losses. They may request a written or recorded statement from you, and in some cases, an examination under oath. As part of their investigation, they may also contact other drivers and witnesses. If you are filing a claim for medical payments or uninsured motorist coverage, you’ll need to provide documentation of your losses, such as medical expenses, lost wages, and injury details.
Q. What should I do if my insurance company is slow to respond after a car accident?
A. You should expect to be contacted by a claim representative within a reasonable timeframe after reporting an accident. While “reasonable” can vary, insurance companies in California generally should contact you within 15 days. If you haven’t heard from them, proactively contact your agent or insurance company for an update. If they remain unresponsive or you believe there’s an unreasonable delay in settling your claim, reach out to the Department of Insurance for assistance.
Q. How do insurance companies assess vehicle damage after a car accident?
A. Typically, a qualified insurance adjuster or appraiser will inspect the damage to your vehicle. Based on this initial inspection, they will prepare a repair estimate. If additional damage is discovered during the repair process, the repair shop will need to contact your insurer for approval of the extra costs. The insurer might then send an adjuster to re-inspect the newly found damage. For minor damage, the insurance company may ask you to submit competitive repair estimates from different shops. Remember, it’s your responsibility to authorize the repair shop to proceed with repairs once you are satisfied with the final estimate and the repair facility.
Q. What amount will my insurance company pay for a physical damage claim under a standard auto policy?
A. Generally, insurance companies will pay the lesser of:
- The cost to repair your vehicle, or
- The Actual Cash Value (ACV) of your vehicle.
Always review your specific policy to understand your coverage details, including exclusions and limitations. For instance, standard policies often have limited or no coverage for aftermarket stereo equipment, telephones, or non-OEM tires and wheels unless specifically endorsed. Additional coverage can usually be purchased for such equipment.
Q. What does “Actual Cash Value” (ACV) mean in car insurance?
A. Actual Cash Value (ACV), unless defined differently in your policy, means fair market value in California. Fair market value is the price a willing buyer would pay and a willing seller would accept for an asset, assuming both parties are reasonably knowledgeable and acting in their own best interest without undue pressure.
Q. What is a car insurance appraisal provision and how does it work?
A. Most standard auto policies include an appraisal provision. This can be useful if you disagree with the insurance company’s valuation of your vehicle, particularly in a total loss situation. Under this provision, either you or the insurance company can demand an appraisal. Each party selects their own appraiser, and these appraisers then choose a neutral umpire. If the two appraisers can’t agree on a vehicle’s value, they submit their differences to the umpire. An agreement by any two of the three (two appraisers or one appraiser and the umpire) is binding. You and the insurance company each pay for your own appraiser, and you split the cost of the umpire.
Q. How are claim payments issued?
A. Payment checks or drafts can be made out to the insured and any lienholder, such as a bank or finance company, if applicable. If your vehicle is repairable, the insurance company may also include the repair facility as a payee on the check.
Q. Who is responsible for paying off the remaining balance of a car loan after a total loss?
A. You, the borrower, remain responsible for the outstanding loan balance, even if your car is stolen or totaled in an accident. If the insurance payout is less than your loan balance, you’ll need to cover the difference. “Gap” insurance is available to protect against this situation, covering the “gap” between the vehicle’s ACV and the loan amount.
Q. Will my car insurance pay for a rental car while my vehicle is being repaired after an accident?
A. Yes, but only if you have purchased rental car coverage as part of your policy. Review your policy details before renting a vehicle. Coverage limits vary, but typically, the insurance company will pay up to a certain daily amount for a specified number of days. Rental coverage usually ends when your car repairs are complete, the claim is paid, or after the policy’s specified period, whichever comes first.
If your car is stolen, your policy might automatically include transportation expense coverage. Again, check your policy to confirm. This coverage typically starts 48 hours after the theft and ends when your vehicle is recovered, the claim is paid, or after a defined period.
Q. What is a Collision Damage Waiver (CDW) when renting a car, and will my car insurance cover these charges?
A. Rental agreements usually make you responsible for damage to the rental car while it’s in your possession. Rental companies offer Collision Damage Waivers (CDWs) for an additional fee, which waive some or all of your responsibility for collision damage. The cost and terms of CDWs vary. Whether your personal auto insurance covers CDW charges depends on your policy’s language. Carefully review your policy and ask your agent or insurance company for clarification before renting a vehicle.
Alt Text: A man inspecting damage to his car after an accident, highlighting the need for careful assessment and insurance claims.
Q. What is the salvage value of my car after an accident?
A. Salvage value is the remaining value of your damaged vehicle if it’s declared a total loss by the insurance company.
Q. What is subrogation in car insurance claims?
A. Subrogation is the insurance company’s right to recover the amount they paid you for damages from a responsible third party. For instance, if another driver is at fault in an accident that damaged your car and you file a collision claim, your insurance company may seek reimbursement from the at-fault driver or their insurance. Your policy requires you to cooperate with your insurer’s subrogation efforts and prohibits you from taking any actions that could hinder their recovery rights. For example, you shouldn’t sign a release agreement with the at-fault party in exchange for your deductible without involving your insurer.
Q. Is my insurance company obligated to help me recover my deductible after a car accident?
A. Yes and no. Your insurance company must inform you if they intend to pursue subrogation. If they do, they are required to include your deductible in their recovery efforts. If they don’t pursue subrogation, they must notify you so you can seek deductible recovery on your own. If their subrogation efforts are successful, even partially, most companies will reimburse you a proportional amount of your deductible. For example, a 100% claim recovery means 100% deductible reimbursement; a 65% recovery means 65% deductible reimbursement. Any expenses or legal fees incurred by the insurer in subrogation are typically shared proportionally between you and the company if recovery is made. However, you can choose to handle deductible recovery yourself, but discuss this with your insurer first to avoid jeopardizing their subrogation rights.
Q. Does my car insurance coverage extend outside of California?
A. Most car insurance policies offer coverage in other U.S. states, territories, possessions, and Canada. Like California, many jurisdictions have financial responsibility laws mandating minimum auto insurance coverage. If the financial responsibility requirements where you travel are higher than your policy limits, your insurer will typically meet the higher minimum requirements. However, most U.S. policies do not cover driving in Mexico, so if you plan to drive there, purchase separate Mexican auto insurance. Always verify your out-of-state coverage before traveling.
California’s financial responsibility law, starting at Section 16020 of the California Vehicle Code, requires all drivers to demonstrate the ability to pay for damages resulting from car ownership or operation. Minimum financial responsibility limits in California are $15,000 for injury or death to one person, $30,000 for injury or death to multiple people in one accident, and $5,000 for property damage in a single accident. When stopped for a moving violation or involved in an accident, you may be asked to provide proof of financial responsibility. This can be done by noting your insurance company and policy number on your DMV vehicle registration card. Keep this proof in your vehicle whenever you drive. For more details, contact the California Department of Motor Vehicles.
Q. What should I do if I receive a lawsuit (Summons and Complaint) after a car accident?
A. Immediately notify your insurance agent and insurance company. Keep a copy of the lawsuit documents for your records and send the originals to your insurance company via mail or delivery. Do not discuss the accident or give statements to anyone other than a verified representative of your insurance company. If the lawsuit stems from a covered incident, your insurance company will provide legal defense.
Q. Is a newly purchased vehicle automatically covered under my existing car insurance policy?
A. Most policies provide automatic coverage for a replacement vehicle—a car that replaces a vehicle already listed on your policy. The coverage is usually the same as your previous vehicle’s coverage. Inform your agent or broker as soon as possible about any replacement vehicle. If you want additional or different coverage, you typically must notify your agent or company within a specific timeframe.
Many policies also offer automatic coverage for newly acquired vehicles that are additions to your existing vehicles on the policy. However, certain conditions usually apply.
Most automatic coverage provisions require you to notify your insurer within 30 days of acquiring a new vehicle if you want it covered under your current policy. Be aware that some policies have shorter notification periods, such as 14 days or less. Failure to notify the insurer within the specified time frame may result in the new vehicle being uninsured. Unless your policy specifies a particular notification method, verbal notice to your insurance agent may be considered sufficient to trigger automatic coverage for a new vehicle.
THINGS TO AVOID
- Avoid Arguments: Do not argue with other drivers or passengers at the accident scene.
- Limit Communication: Reserve details of the accident for the police and your insurance company.
- Don’t Admit Fault or Promise Payment: Do not sign any statements accepting fault or promising to pay for damages to the other parties involved.
- Beware of Deductible Offers: If another party offers to pay your deductible, do not sign anything without consulting your insurer.
- Provide Required Information: Do not refuse to share necessary information such as driver’s license, insurance, and vehicle details with involved parties and law enforcement.
Important Tips
- Policy Familiarity: Read your car insurance policy thoroughly. Don’t wait until after an accident to understand your coverage.
- Seek Clarification: If you don’t understand any part of your policy, ask your agent or insurance company for clear explanations.
- Call Authorities: In case of an accident, call the police. If there are injuries, also call paramedics immediately.
- Gather Information: Collect as much information as possible at the accident scene to provide to your agent and insurance company.
- Prompt Notification: Immediately notify your agent and/or insurance company after an accident.
- Cooperate with Adjusters: Cooperate fully with insurance adjusters and investigators to assist in their claim processing.
- Ask Questions: If anything about the claims process is unclear, ask your agent or insurance representative for clarification.
- Update Vehicle Ownership: Notify your agent or company in writing of any changes in your vehicle ownership, such as buying or selling a car.
Your Rights Under the Fair Claims Settlement Practices Regulations
Generally, insurance companies in California are legally obligated to:
- Inform You of Policy Details: Advise you of all benefits, coverage, deadlines, and other relevant provisions of your insurance policy.
- Acknowledge and Investigate Claims Promptly: Acknowledge your claim, begin investigation, provide necessary forms and instructions, and offer reasonable assistance immediately, but no later than 15 days after receiving your claim notice. (Claim notice is any written or verbal communication indicating you wish to file a claim).
- Respond to Your Communications Quickly: Respond to any communications from you immediately, but no later than 15 days after receipt.
- Timely Claim Decisions: Accept or deny your claim immediately, but no later than 40 days after receiving your proof of claim. Proof of claim includes documentation you possess that substantiates your claim and the extent of your loss, such as repair estimates or a police report for vehicle theft.
- Reasonable Towing Expenses: Unless you were provided with a specific towing company by your insurer prior to needing towing services, the insurer must pay reasonable towing expenses.
- Fair Settlement Offers: Offer a fair settlement. For a total loss, the settlement must include applicable taxes, license fees, and transfer fees. The settlement should reflect the value of a comparable vehicle of similar kind and quality. If you retain the salvage, any deductions for salvage value must be fair, measurable, and transparent.
- Prompt Claim Payment: Once your claim is accepted, the insurer must pay it immediately, but no later than 30 days from the date a settlement is reached.
- Subrogation Advice: Inform you whether they will pursue subrogation to recover costs. If they do, they must include your deductible in their recovery efforts unless you have already recovered it.
The above points are a simplified summary of some key aspects of the Fair Claims Settlement Practices Regulations in California.
Automobile Insurance Fraud
Automobile insurance fraud in California manifests in various forms, primarily involving vehicle property damage and staged accidents.
Vehicle Property Fraud: This often involves unethical auto body shops and, sometimes, policyholders using fraudulent practices, including:
- Exaggerated Damage Claims: Reporting vehicle parts as damaged or missing when they were not prior to the shop’s possession.
- Inflated Repair Costs: Final costs exceeding the original damage estimates without valid reason.
- Unauthorized Billing: Charging for repairs that were never authorized by the customer.
- Deceptive Parts Billing: Billing for new, genuine parts while using cheaper aftermarket or used parts.
- False Repairs Billing: Charging for new parts but only performing minor repairs like hammering out dents or using body filler.
- Staged Vehicle Loss: Falsely reporting vehicle theft or vandalism to collect insurance payouts.
It’s crucial for consumers to carefully review all paperwork from auto body and repair shops to protect against fraud. Be wary of repair facilities that refer you to specific medical or legal offices, as this may indicate “capping,” an illegal practice in California (a felony) involving illegal referrals to legal offices for a fee.
Automobile Accident Fraud: This frequently involves organized accident rings that stage collisions. Common staged accident schemes include:
- Sudden Stops: Intentionally stopping abruptly for no apparent reason to cause a rear-end collision.
- Right-of-Way Violations: Deliberately disregarding right-of-way rules to provoke an accident.
- Yielding to Cause Accidents: Giving up right-of-way unexpectedly to create an accident scenario.
- Phantom Passengers: Claiming passengers were in the vehicle who were not actually present during the accident.
- False Witnesses: Listing individuals as witnesses who were not at the accident scene.
- Exaggerated Injuries: Claiming injuries that are disproportionate to the extent of vehicle damage.
- Temporary Vehicle Registration: Drivers using temporary vehicle registrations, which can be a red flag.
- Pre-existing Vehicle Damage: The other vehicle already has prior damage, suggesting a pattern of staged accidents.
- Unsolicited Legal Contact: Being contacted by an attorney without you seeking legal advice first.
If you’ve been in a car accident, be cautious of any unsolicited referrals to body shops, law offices, or medical offices. Organized accident rings and “cappers” actively recruit individuals to participate in creating fraudulent accidents, sometimes even “paper accidents” that exist only on paper without any actual collision. Paper accidents are becoming more common among fraudsters as they are less risky in terms of physical injury and reduce the chance of police involvement.
Auto Body Repair Shops
Under California Insurance Code §758.5, insurance companies cannot mandate that you use a specific auto body repair shop. However, they can recommend a shop under specific legal conditions:
- Consumer Request: You specifically ask the insurance company for a repair shop recommendation.
- Informed Choice: You are informed in writing of your right to choose any repair shop.
- Quality Guarantee: If you choose the recommended shop, the insurer must ensure your vehicle is restored to its pre-accident condition without any additional costs beyond your policy terms or legal allowances.
- Oral Recommendations Followed by Written Notice: If the company recommends a shop verbally and you agree, they must follow up with a written notice of your rights within five calendar days as required by law.
If you select a repair shop of your choice, the insurance company is required to pay the reasonable costs to repair your vehicle according to accepted industry standards for quality automotive repairs.
- No Discounting Based on Preferred Shops: Insurance companies are not allowed to limit or reduce reasonable repair costs based on what it might have cost at their recommended shop.
- Warranty of Recommended Shop Repairs: The insurance company must stand behind the quality of repairs if you use their recommended shop and the repairs are not done correctly.
Auto Replacement Parts
Car repairs may involve replacing damaged parts with aftermarket parts, which are not made by the original vehicle manufacturer. Aftermarket parts can be of equal or even superior quality to Original Equipment Manufacturer (OEM) parts. While aftermarket parts can be used, they must be comparable to OEM parts in terms of type, quality, safety, fit, and performance. Key points to note:
- Written Repair Estimates and Invoices: Auto repair shops must provide a written repair estimate before starting work and a detailed written invoice upon completion. California law requires that the type of parts used (used, reconditioned, rebuilt, aftermarket, or OEM) be clearly identified on the repair invoice. Carefully review your invoice to ensure all replaced parts are correctly identified.
Consejos importantes
A quick overview for our Spanish readers. So you’ve had an Accident, What Next?
- Lea su póliza. No espere hasta tener un accidente.
- Si no entiende su póliza, pida una aclaración a su agente o a su compañía de seguros.
- Si tiene un accidente, llame a la policía. Si hay lesiones, llame a los paramédicos.
- Obtenga la mayor cantidad de información posible en el lugar del accidente, para entregársela a su agente y/o a su compañía de seguros.
- Notifique inmediatamente a su agente y/o a su compañía de seguros si tiene un accidente.
- Coopere con los tasadores e investigadores de la compañía de seguros.
- Si no entiende algo sobre el procedimiento de las reclamaciones, por ejemplo, la cantidad de la oferta de liquidación, pida a su agente y/o a su compañía de seguros que se lo expliquen.
- Notifique por escrito a su agente o compañía de seguros cualquier cambio en la propiedad de su vehículo.
Were you able to repair the car in Spanish? This section provides a brief guide in Spanish for Spanish-speaking readers involved in car accidents, ensuring important information is accessible in their preferred language. For more detailed assistance in Spanish, contacting the Department of Insurance or seeking bilingual insurance professionals is recommended.
Talk to the Department of Insurance
We, the California Department of Insurance (CDI), are the state agency regulating the insurance industry and protecting insurance consumers’ rights.
Contact the CDI if:
- You feel an insurance agent, broker, or company has treated you unfairly.
- You have questions or concerns about health insurance.
- You want to order CDI brochures.
- You wish to file a request for assistance against your agent, broker, or insurance company.
- You are experiencing difficulties opening a claim with your insurance company.
- You need to verify the license of an agent, broker, or insurance company.
Contact Information:
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 in person:
300 South Spring St., South Tower, 9th Floor, Los Angeles, CA 90013
Hours: 8:00 AM to 5:00 PM, Monday to Friday, excluding holidays
