How Car Insurance Claims Work Step-by-Step (2025 Guide)

Introduction

A car crash, hailstorm, or hit-and-run can turn a normal day upside down. The good news: your policy exists to protect you—if you know how to use it. This beginner-friendly guide walks you through how car insurance claims work from the first photo at the scene to the final payment, with practical scripts, timelines, and checklists you can follow today.

What is a Car Insurance Claim?

A car insurance claim is a formal request you (or a third party) submit to an insurer asking it to pay for a covered loss—vehicle damage, injuries, or property damage—according to your policy. Claims can be:

• First-party (you claim against your own policy—collision, comprehensive, uninsured/underinsured motorist, PIP/MedPay).
• Third-party (someone else files against your liability coverage because you were at fault).
• Why it matters: claims are how you convert premiums into benefits.

The Types of Auto Claims (Quick Compare)

Claim Type	What It Covers	Who Files	Typical Deductible?	Example
Liability	Others’ injuries/property when you’re at fault	The other party	No (you pay through premiums)	You rear-end someone
Collision	Your car’s damage from a crash (regardless of fault)	You	Yes	You hit a pole
Comprehensive	Non-crash losses: theft, vandalism, fire, hail, flood, animal	You	Yes	Hail damages hood
Uninsured/Underinsured Motorist (UM/UIM)	Your injuries/property when the at-fault driver lacks coverage	You	Sometimes	Hit-and-run
PIP/MedPay	Your medical bills (and sometimes lost wages)	You	No (usually)	ER visit after crash

Tip: In no-fault states, your own PIP generally pays initial medical bills regardless of fault; property damage still follows fault rules.

The Car Insurance Claim Process (Step-by-Step)

Step 1: Make the scene safe & gather evidence

• Move to safety; call 911 if anyone is hurt.
• Exchange info: names, phone, driver’s license, insurance company & policy number, plate numbers.
• Photograph everything: positions of vehicles, damage close-ups, road conditions, traffic signs, weather, skid marks, injuries, and the other car’s VIN (door jamb/windshield).
• Ask witnesses for statements/contact details.
• Police report: obtain the report number at the scene if possible.

Step 2: Notify your insurer promptly

• Report the loss via app, website, or phone (many policies require prompt notice, often within 24–72 hours).
• Provide the basics: time, location, description, other driver’s info, police report number, photos/video.

Step 3: Understand your coverage & deductible

• Confirm whether this is collision or comprehensive, your deductible amount, and any rental car coverage.
• Ask if using your coverage could affect surcharges (premium increases) and whether a diminished value claim is allowed in your state.

Step 4: Claims assignment & adjuster contact

• An auto insurance adjuster is assigned. They’ll review evidence, inspect your car (virtually or in person), and estimate repair costs.
• You may be asked to use an approved repair shop; you can usually choose your own, but tell your insurer.

Helpful question list for your adjuster

• “Is this collision or comprehensive on my policy?”
• “What is my deductible and when is it applied?”
• “Do I have rental reimbursement and at what daily limit?”
• “Will you pay for OEM parts, or only aftermarket/remanufactured?”
• “If additional hidden damage is found, how do supplements work?”

Step 5: Appraisal, estimate & liability decision

• The adjuster (or shop) prepares an estimate.
• Fault is determined from statements, photos, police report, state law, and sometimes telematics/dashcam.
• In no-fault states, medical bills are handled by PIP first; property damage still follows fault.

Step 6: Repair or total-loss decision

• If repair cost ≥ a threshold of your car’s Actual Cash Value (ACV), the insurer may total it.
  • Total loss payout = ACV – deductible – any lien.
  • You can usually buy back the salvage in some jurisdictions (title becomes branded “salvage”/“rebuilt”).

Step 7: Payment & closing the claim

• Repair route: insurer pays shop directly or reimburses you; you pay the deductible to the shop.
• Total loss: you sign paperwork, release the vehicle, and receive payment.
• Keep all documents. If new damage is found, ask your adjuster about a supplemental claim.

Visual Timeline You Can Follow

Typical duration: 1–3 weeks for minor repairs; 4–8+ weeks if injuries, complex liability, or parts delays.

What to Prepare Before You File

Common Mistakes That Slow or Sink Claims

• Waiting too long to report the loss.
• Admitting fault at the scene (“It was my fault”)—stick to facts.
• Fixing or discarding parts before the adjuster can inspect.
• Submitting incomplete documentation (no photos, missing bills).
• Overstating damage—hurts credibility and may trigger denial.
• Ignoring exclusions (e.g., commercial/rideshare use if not covered).
• Not reading your estimate (missed items, no OEM allowances).

Tip: Document first, repair second. Photos and receipts are your leverage.

FAQs: Car Insurance Claim Process

1) Do I need a police report to file?

Not always—but it helps. Many insurers (and states) strongly recommend it, especially for injuries, hit-and-run, or unclear fault.

2) Will my premium go up after a claim?

It depends on fault, state, accident type, and your insurer’s surcharge rules. Comprehensive claims (hail/deer theft) often cause smaller or no surcharges compared with at-fault collision.

3) Can I choose my own repair shop?

Usually yes. Preferred shops may speed payment/warranty. If you pick your own, ask your adjuster about their estimate review process.

4) What if the other driver is uninsured?

Use UM/UIM (if you bought it). For injuries, PIP/MedPay may also help depending on your state.

5) What is diminished value?

Your repaired car may be worth less than before the crash. Some states allow diminished value claims—ask your insurer or state regulator.

6) How long do I have to file?

Your policy sets deadlines (“prompt notice,” sometimes within 30–60 days). Lawsuits have separate statutes of limitations by state.

7) Can I get OEM parts?

Depends on your policy and state law. Some states allow aftermarket parts on older vehicles. You can pay the difference if you prefer OEM.

8) What if my claim is denied?

Request a written denial with policy citations; submit more evidence or appeal. You can also contact your state department of insurance or seek legal advice.

9) What if the shop finds more damage?

They submit a supplement to your adjuster. Don’t sign off until the supplement is approved.

10) Should I file small claims?

If damage is near your deductible, consider paying out of pocket to avoid potential surcharges—ask your agent how it could affect rates.

11) What’s subrogation?

If your insurer pays you but the other driver is at fault, your insurer may pursue subrogation to recover what it paid (and your deductible).

Special Situations (and What to Do)

Hit-and-Run

• Call police immediately; get a report.
• Use Uninsured Motorist (UM) if available; some states require a police report for UM claims.

Hail or Animal Strike

• This is comprehensive, not collision. Often lower surcharge risk; a glass-only claim may have different rules.

Rental & Towing

• Check your rental reimbursement daily limits (e.g., $30–$50/day) and towing/roadside coverage limits before you book.

Injuries

• Keep all EOBs (explanations of benefits), medical bills, and notes from doctors. In no-fault states, PIP is primary for injuries up to policy limits.

How Insurers Calculate Payouts

• Repairable loss (collision/comprehensive)
  • Insurer pays reasonable repair cost minus your deductible.
  • If the at-fault party’s insurer pays, no deductible (for that portion).
• Total loss
  • Actual Cash Value (ACV) – deductible – salvage (if you keep car) – loan payoff (if lien).
  • ACV is based on market data for similar vehicles (miles, options, condition).
• Injury claims
  • PIP/MedPay bills (up to limits) + potential bodily injury liability settlements (if other party is at fault).

Words & Clauses You’ll See

• Deductible: Amount you pay before coverage pays.
• Betterment: Reduction if new parts increase your car’s value (less common today).
• Comparative negligence: Fault can be split (e.g., 70/30).
• Appraisal clause: Process to dispute ACV/repair cost using neutral appraisers.
• Right of repair: In some states/policies, the insurer can select the repair method.

When to Get Help

• Injuries, complex liability, or high-value losses: consider consulting an attorney or a public adjuster (more common for property/home; less so for auto but possible).
• Claim stalemate: escalate to a supervisor or file a complaint with your state department of insurance.

External Resources (authoritative)

• Insurance Information Institute (III): Auto Insurance Basics & Claims — https://www.iii.org
• NAIC Consumer Resources: Auto Insurance & Complaints — https://content.naic.org/consumer.htm
• USA.gov: Auto Insurance & After a Crash — https://www.usa.gov/automobile-insurance
• State Insurance Departments Directory (find your state regulator) — https://content.naic.org/state-insurance-departments
• NHTSA: What to Do After a Crash — https://www.nhtsa.gov

Use these for detailed state-specific rights, no-fault rules, and complaint processes.

Conclusion

• Document everything at the scene (photos, contacts, police report).
• Report the loss quickly and confirm your coverage & deductible.
• Coordinate with the adjuster and your repair shop, review the estimate, and ask about supplements.
• Decide repair vs total loss with eyes open about ACV and title status.
• Follow up until payment is issued—and keep your paperwork.

Knowing how car insurance claims work turns a stressful event into a manageable project. Save this guide so you’re ready long before you ever need it.

Disclaimer

This article is for informational purposes only. Clamifio does not sell insurance and this content is not legal, financial, or claims advice. Policies and laws vary by state and insurer. Always confirm details with your insurance company, a licensed professional, and your state regulator.