Tuesday, May 13, 2014

Car Insurance Coverage: Avoid Expenses After an Accident

Reduce Your Expenses After a Vehicle Accident

A Vehicle Accident Can Be Expensive- Even If It Is Not Your Fault
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Last month, someone ran into my wife's car from behind while she was stopped at a stop sign.  The accident occurred within a couple blocks of the High School.  The driver of the truck that ran into her was 16 years and 11 days old.

Fortunately, no one was hurt.  My wife's car is a Ford Fusion.  The truck that ran into it is a Chevy Silverado 2500, which is a big truck and did a lot of damage to my wife's Fusion.  After the accident, a police officer arrived at the scene and took down everyone's insurance information and provided it to those involved.  I was in charge of filing the claim and arranging to get my wife's car repaired.  There were several surprises along the way.

You Have To Pay A Deductible- Even if the Accident was Not Your Fault!?

Do You Still Have To Pay The Deductible If the Accident is not Your Fault?
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The first surprise was that we had to pay our $1,000 deductible to get our car repaired.  I was not surprised that we had a $1,000 deductible- I was surprised we had to pay it since the accident was no fault of ours at all.

It turned out that we were able to get the deductible payed back from the other party's insurance company, but we did have to make a $1,000 payment ourselves to pick up our car from the body shop.  My insurance company was able to provide contact information, including claim numbers, for the other party's insurance company to help me get paid back quickly.

Am I Covered to Get a Rental Car or Not?

What Would You Drive If Your Car Is In the Shop For a Month?
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Next surprise- the rental car coverage only covers up to $25 per day.  You can't really rent a car for $25 per day- it costs more like $50, at least in my area.  It turned out the the repair of the Fusion took 5 weeks.  If we would have rented a car for this amount of time, our share of the bill for a rental car would have been around $1000!  Good thing we had a car for my teenager that we could borrow for awhile!

Do I Have to Pay for Towing Myself?

Another surprise- I planned to use my AAA coverage to to the car about 15 miles from our house to the body shop.  The car was driveable, but I didn't want to drive it in traffic since the brake lights were broken and the trunk wouldn't close.  I made arrangements with AAA to tow the car- then they mentioned that my AAA towing coverage only covers the first 5 miles of towing!  That wouldn't do me much good since the body shop was 15 miles away.  I had the body shop arrange to tow my car and had it included on the repair bill so it would be covered by my insurance.

How to Get a Cash Settlement After a Vehicle Accident

After my wife's car arrived at the body shop, we got an estimate for repair.  It was in the neighborhood of $15,000.  My first thought was to see if I could keep the money and just have the body shop bend the trunk so it would close and repair the broken brake lights in the cheapest way possible.

I called my insurance company to see if this would be an option, and they said I could take a cash settlement for the amount of damages- less the $1,000 deductible- and keep the car as is.  Next, I talked with the body shop to see how much a very crude repair would cost.  There were a couple snags with my plan to pocket the cash settlement.

1) The cheap repair was not actually that cheap.  Using junk yard parts and cutting some corners, the repair estimate was still around $7,000.  This was a lot less than $15,000, but the repair would not include everything.

2) Since I was making car payments and the bank had the title to the vehicle, the check would be issued to both me and the bank to co-sign.  I was concerned that the bank would want to keep some of all of the insurance payment since the value of the car would be significantly reduced.

I decided to go ahead with the full repair in this case.  The Fusion is back and looks great.  I got my deductible back, paid nothing for towing, and did not pay anything for a rental car.

Get This Information to File a Claim After an Accident

As I mentioned, the police responded to this accident and provided a valuable service by documenting the accident.  They took statements from the parties involved and systematically collected all of the information to file an insurance claim.  If the police are not involved in your accident, you will need to collect this information yourself.  Here is a list of information that my insurance claim center requested when I called to make an insurance claim:

  • Driver's name: who was driving all of the other vehicles involved in the accident
  • Vehicle license plates, make, model for all vehicles involved in the accident
  • Driver's address for all drivers involved in the accident
  • Driver's insurance company and policy number for all vehicles involved
  • Description of accident
  • Location and time of accident

My insurance company also asked for the names of the passengers in the other vehicles.  I only knew the driver's name and not the name of the passenger, and this was acceptable.

It is hard to remember to collect all of this information right after an accident.  Consider calling the police to help document the accident and make sure all information is collected before parties involved in the accident leave the scene.

Tips on Handling an Vehicle Accident Insurance Claim to Reduce Your Expenses:

1) Check the coverage limits you have for a rental car before renting one.  You may have a daily limit.  My coverage also had a cap on the total amount they would pay for rental car coverage per incident.  If insurance would have covered a rental car, I would have used it, but it was not worth paying a significant bill since I could borrow another car.

2) Get the towing expense covered by the insurance claim.  Arrange with your body shop to include the towing.  Or use AAA if you have it and it will cover the towing distance required.

3) Recover the deductible if the accident was not your fault.  I called the other party's insurance company and requested payment.  They agreed to mail a check.

4) Make sure to get all of the information you need to file a claim while you are at the accident scene.  The police can prepare an accident report and ensure that all of the information needed for insurance purposes is collected.

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