You've been in an auto accident and you, someone else in your vehicle, or another party was injured. What happens once the claim is reported to insurance? A number of steps can happen during an injury claim depending on the type of injury claim and the coverages involved.
At the Accident Scene
It is important to call the police to the accident scene, as well as to exchange contact and insurance information with the other party. If you are safely able to do so, you should also take photos of the vehicles at the scene. This can be very helpful in determining liability if there is a dispute.
If you are injured, a police report needs to be filed immediately after the accident. In some jurisdictions, it's required to file a police report even on minor accidents involving only property damage.
Filing the Claim
You'll need to gather your important documents, like copies of your insurance policy and details on the loss, in order to file a claim. You will need key information that tells the story of your claim, such as the date the accident occurred, details, location, and vehicle specifics. You will also need names and contact information for the parties involved, as well as for any witnesses.
Next, you'll want to go online to see if your carrier offers the option to file the claim online or via an app. This can speed the claims process along in many cases. If not, or if you prefer to file your claim by phone, you will need to call the insurance company and provide information to a claims intake adjuster.
Find out if you also need to file a separate claim with the DMV, as this may be required in some states. If you are filing a claim with the at-fault party's insurance company, you will also need to send documents and any required information to your insurance company.
The Claims Process
Once the claim is filed, the insurance company will set some parameters on when you can first expect to hear something from an adjuster. It is likely that the other party's carrier will be contacting you at some point.
The severity of the accident might determine which unit within the company handles the claim. Serious accidents and ones involving attorneys are typically triaged to claims professionals with more advanced knowledge and experience who are dedicated to working these types of claims.
In most cases, there may be two claims adjusters within your own insurance company that you are dealing with. One handles only the property damage portion of the claim, while the other handles the injury portion.
Property damage and medical payments and/or third-party claims are almost always handled independently, so the property damage claim may resolve early on after you pay your deductible, while the injury portion of the claim continues, especially if the case goes on to litigation.
It's helpful to note that most property damage matters are handled as two entirely separate claims, and the damage claim itself may be settled between the carriers. If your adjuster feels the other party is at fault, they may resolve your vehicle damages and then pursue the other party's carrier in a process known as subrogation, and vice versa. In some cases, they may get your deductible back, which would then be refunded to you.
If you have an attorney representing you, your attorney should send a letter of representation to the carriers. In this case, you will need to direct any adjusters who contact you to your attorney. There should be no contact between a represented party and the insurance company directly.
Types of Injury Claims
Several different types of injury claims may be filed as a result of an auto accident that involves in which someone is injured. These vary by state, but some of the more common ones include:
- Third-party liability (where the other party's carrier pays your damages)
- Medical payments or MedPay (specific coverage under your policy for medical claims)
- Uninsured motorist or UM (first-party claim where your policy pays for your injury claim because the other party doesn't have insurance)
- Underinsured motorist or UIM (first-party claim where your policy pays a portion for your injury claim because the other party's limits weren't high enough to cover the entire claim)
What to Expect in Various Scenarios
There are different timelines and resolutions to a claim depending on the type of injury claim. Your claims adjuster(s) will walk you through the usual steps and give you some sort of estimate that allows you to understand how long the claim may take.
They will set expectations and walk you through the injury claims process. They may tell you when you can expect to hear from them, or they may send you letters and request additional information in order to evaluate your claim and offer you a potential settlement.
Third-Party Liability Injury Claims
Ultimately, the adjuster needs time to complete their investigation before they can make you an offer to settle on any third-party liability claims for injuries. The insurance company will typically not pay any bills or partial claims until the matter is fully resolved and treatment is concluded.
This means that no payments are made throughout the claimed process, but take place only when the claim is settled. A settlement may be reached either between you and the other party's insurance company or between the attorney and insurance company. If you were at fault and someone is making an injury claim against your policy, the reverse will apply.
Adjusters cannot make settlement offers on behalf of at-fault insureds until all medical treatments have been concluded. If you're receiving treatment and the doctor tells you five more months of rehab or physical therapy, understand the adjuster won't be able to offer you a settlement amount until the claim is concluded. Imagine if you settled prematurely and then found out after your signed the release of all claims that you need surgery because it's not healing right. If you settled and signed a release, there would be no going back for more money.
In some cases, a claim may resolve while treatment is still pending, but it's because the injury is so substantial that the insurance limits won't cover all the bills and pain and suffering. In that case, the adjuster will offer the limits of the policy in exchange for a release of all claims.
The time it takes for a third-party injury claim related to a car accident to settle varies based on the facts of the accident, how long it takes to complete the liability investigation, and the time needed for negotiation of the agreed settlement amount. This may take as soon as a few days for simple losses, all the way to a year or more, especially when attorneys are involved and the case proceeds into litigation.
If liability is disputed and the case goes to litigation, a lot of legal proceedings and appearances may take place. You may have to give a deposition or attend mandated settlement proceedings, like a court ordered mediation.
Many courts push for alternative dispute resolution as it helps some in trying to unclog the court system. A mediation offers parties a chance to present their case and get feedback from someone who has a better idea of what the case is really worth. Depending on the jurisdiction, some cases can take years to resolve through the court system.
First Party Medical Payments Coverage
Some states and policies allow for medical payments coverage. This is coverage through your own carrier for you and any passengers in your vehicle, and is known as a first-party coverage because it's your own policy. The amount will vary based on your policy, but it's important to check if you have this coverage and what the limit is.
With some insurance carriers, the MedPay adjuster is also different from the property damage and third-party injury adjuster too. Typically, you submit your bills and they are paid directly to the medical providers, up to whatever limit you carry.
It's important to note that some states and carriers have different rules on how MedPay is handled. Some policies state your health insurance is primary, while others say MedPay is primary. And some health insurance companies have clauses that indicate they won't pay for bills if there is potentially another responsible party (like the driver at fault's auto insurance policy).
Uninsured Motorist Claims
UM claims are similar to third-party liability claims, except you are dealing with your own insurance company because the other party didn't have coverage, or the accident was a hit-and-run situation. This is elective coverage you pay extra for on your policy in some states. You will be treated like a third-party claimant and the same timeline can apply as with third-party injury claims. The adjuster won't settle until treatment is resolved, or until it's determined the claim exceeds the available limits.
Underinsured Motorist Claims
If you have UM protection, you likely also have underinsured motorist coverage if it's available in your state. UIM coverage is first-party coverage that kicks in when the other party's limits are not high enough to cover your injury claim.
In states where UIM coverage is available, you would effectively come back to your own carrier and advise them that the other party's coverage was not enough and then open an UIM claim. Typically, this type of claim doesn't start until it's confirmed that the other party's limits are not enough to cover your injury claim.
In order for the at-fault party's carrier to negotiate a settlement, they have to obtain copies of your medical records and proof of treatment and billing. You'll be asked to sign some forms giving the medical facilities and doctors that treated you approval to release your medical records to the insurance company.
In most cases, any communication regarding billing and status of treatment will be between the adjuster and the medical office billing representative. If you are represented by an attorney, your attorney's office is typically the one to first subpoena the necessary documents and records.
Statute of Limitations
Familiarize yourself with your state's statute of limitations. In some cases, you only have a year from the date of the accident to file a lawsuit to preserve the claim if you feel the other driver is at fault. What this means is that the state sets a time limit for claims to expire. For example, if you have one year from the date of the accident to preserve the statute by filing a lawsuit, and you fail to settle or file suit, the other party's insurance company is under no obligation to offer you even a dollar.
Don't assume your carrier or the other party's carrier will tell you when the statute of limitations if up. Learn for yourself, as courts are not necessarily lenient in allowing you to file post-expiration. This also means you may think a claim is resolved and come to find out the other party filed a lawsuit because the statute of limitations was approaching. There is not necessarily a reason to panic, though. Attorneys have to file the lawsuit to preserve the statute even if the case is close to resolving otherwise there is no method of recovery once the statute of limitations is up.
Negotiating Your Claim
When it comes time to negotiate your claim, you will present a demand letter to the insurance company, which they will likely reject and come back with a counter offer. While there is no hard and fast rule, some attorneys swear adjusters use the two to five rule, where they multiply your medical bills by a number between two and five, which represents your "pain and suffering." In other words, if you have $1,000 in medical bills, an adjuster might offer you $2,000 on the low end or $5,000 on the high end. Note that this number is not an exact formula or science, and the more severe the case, the higher the number is likely to be.
Keep in mind, though, that if the other party is at-fault, they may not have insurance coverage high enough to cover all your damages. That is when you will need to look to your own UIM coverage, provided it's offered in your state and you have the coverage.
Is an Attorney Needed?
Retaining an attorney is a personal choice in most situations. There is no right or wrong answer on whether you should bring in an attorney most of the time. In some cases, retaining an attorney might speed the claims process along, or it could delay it because another party is now involved and will spend time requesting medical records and doing things the adjuster has already done.
If you have an attorney representing you, the adjuster is prohibited from talking with you. In that case, all communication will be between your attorney and the adjuster per the letter of representation the firm sends to the insurance carrier.
Pros to Consider
Potential positives to consider when thinking about working with an attorney include:
- A positive element to hiring an attorney for your own third-party liability claim is that you'll be dealing with someone who handles these matters on a daily basis, removing the confusion and difficulty from your shoulders. They work directly with the adjuster, negotiate on your behalf, and help to eventually settle the case.
- An attorney will also tell you what they think your case is worth. This can be very helpful, as many claimants don't realize their case isn't necessarily valued as high as they think it is.
- If the other party files an attorney and sues you for injuries, your attorney will provide counsel for your defense as part of your liability coverage, up until the limits of your policy.
Downsides to Consider
Potential downsides of working with an attorney to consider include:
- If the case proceeds into litigation with a lawsuit being filed timely, the estimated time for settlement can be significantly longer. Courts that are on a fast track system, which means they have a program in place for trying to resolve cases sooner, may still take a year or more to settle.
- When you retain a lawyer, you will typically lose around 30% of the settlement in attorney's fees.
When Liability Exceeds Coverage
In serious injury and fatality losses, the at-fault party's insurance limits may not be enough to cover the third-party claims. This may also be the scenario for a minor accident where there were a number of passengers in the other vehicle who sustained moderate injuries. Your insurance company will only defend you and pay out up until your policy limits, which is why it's very important to carry the highest liability coverage you can afford.
In most cases, the other party settles the claim for the policy limits and the matter is resolved. In a select few instances, a claimant's attorney may attempt to sue you beyond the policy limits of your coverage. Your insurance will not handle losses above and beyond your policy limits, so you may need to retain a separate defense attorney if the other party refuses to settle all claims within your available coverage limits. Laws and processes vary by state, so this is something you'd need to discuss with your insurance adjuster directly if the potential scenario arises.
Additional Parties With Liability
When a lawsuit is filed, any potential parties who may share fault are brought in. When that occurs, additional attorneys may be working on the defense side. Special and unique circumstances that may lead to other parties being added to a lawsuit include:
- If the at-fault party has umbrella coverage and it looks like a claim will exceed the automobile policy's liability limits, the attorney will put the umbrella carrier on notice.
- If the at-fault driver was working at the time of the loss, his or her employer may have liability.
- If there is a potential defect claim pending for the vehicle, the manufacturer may have liability.
Resolving Your Claim
For third-party liability claims, auto accident injury claims resolve when a dollar amount (settlement) is reached that all parties can agree on. The claimant will sign a release of all claims and a check is issued to that party. If the case is in litigation, a dismissal of all claims must be filed before the matter is concluded. The same procedure happens with UM and UIM claims. MedPay claims typically just close when the coverage has been exhausted, which can happen right away if your medical bills, or those of an injured passenger, are high.