When you see the word “Primer”, what do you think of? Someone may say: “It reminds me of children’s books.” Another may say: “I think of the painting.” Actually, both answers are accurate. A primer is one that has to do with the most basic applications. For kids, it’s learning ABC’s and 123 and with paint, well, it’s the base coat of paint that you add others on top of.
What is an auto insurance claim?
In the most basic definition, an insurance claim is simply a request for payment based on the terms of an insurance policy. For example, if you have collision coverage on your car and you are in an accident, you will file a claim for payment to cover the cost of repairs. When the company receives the claim, it will review it and compare it to what the policy covers before paying you. While this is the basic principle behind what a claim is, things can often get extremely complicated.
Impact of claims on the cost of vehicle insurance
In another article, we looked at underwriting and rating factors and how these two elements affected the cost of your auto insurance premiums. It was noted that of all the many elements that could have an impact on premium cost, by far the most influential aspect was the frequency of claims from a particular group.
Yes, your personal claims history can certainly affect your individual premium cost, but the frequency of group claims will set the foundation on which individual premiums are built.
You ask, “Okay. Which group do I fit in?” To answer, we cannot say that you are in only one group. You will actually be a member of several different groups. For example, the type of car you drive will classify you with a group. Your age and marital status will further categorize you with other groups and so on.
Loss frequency, which measures how often an insured event occurs with a group relative to the number of policies within that group, will strongly influence premium costs. If you share features with high claim groups, you will be charged more for your insurance coverage.
All of the above sounds a bit negative since it alludes to more expensive insurance coverage. On the other hand, the opposite side of the same discussion will show that people who share characteristics with low claim classes will be charged lower rates.
Don’t wait to compare auto insurance coverages
Continuing with the idea of a “primer” or the basics of a claim, before you file a claim, you need to know what your policy covers. Waiting until you are in an accident is not the time to start reading about your coverages. Do a comparison of your auto insurance coverages, as they should be known before you have to file a claim.
So seriously, do you know what your auto insurance policy covers? As stated elsewhere, keep in mind that the insurance policy for the vehicle you purchased is a legal contract. As such, you should be familiar with its terms.
In fact, the first thing you should do after buying your policy is compare auto insurance coverages to make sure all the coverages you thought you bought are listed and listed by the amounts you applied for. Also, while the following should be obvious, you should double check to make sure all drivers are listed.
If you find errors, you should contact your insurance agent immediately to resolve the errors. Don’t risk driving without reviewing your policy.
Responsibilities in Filing an Auto Insurance Claim
If you have a claim, your insurance policy will describe your obligations to the insurance company in the event of a loss, but typically your responsibilities will include, but are not limited to, the following.
At the scene of an accident:
- Make sure everyone in your car is okay
- Check the other car to see if they’re okay
- Get the following information from the other driver: name, address, phone number, license plate number, driver’s license number, car insurance information
- Give the same information to the other driver
- Get the name and phone number of any witnesses
- Keep a disposable camera in your car and take accident photos
- Contact the police to report your accident
- Contact your insurance company or claims office as soon as possible.
- Provide any information your insurance company requests and cooperate with them in resolving the claim.
- Keep receipts and records of all expenses you incur as a result of the accident. Depending on the terms of your policy, your emergency medical expenses incurred as a result of an auto accident may be covered by your policy.
- Immediately forward to your insurance company any documents, such as a lawsuit, that you may receive from others as a result of the accident.
Keep detailed claim records
At best, we would never have to worry about accidents and claims, but that is not realistic. Accidents happen every day, but we always hope that they don’t involve us. If you are involved in an accident, after it’s all over and the claim has been settled, you have a very important step to take. You must keep detailed claims records. Take the time to create a special dedicated file folder to keep copies of all documents related to your accident. Depending on the complexity of your claim, you may have a significant amount of paper.
Regardless of what you have, most CPAs recommend keeping this information for 7 years. Submit it with your tax records or other important documents. Be sure to seek professional advice if you have questions about record retention or other issues related to a claim.
Be Proactive: Get New Auto Insurance Quotes Every Year
Being a proactive and responsible driver can help you avoid many situations that could otherwise result in a claim against your affordable auto insurance coverage. Being a complacent driver can cost money. Make it your goal to review your coverage at least once a year and get new quotes to ensure you have the most affordable auto insurance for your budget.