No matter how careful you try to be out on the road, everyone makes mistakes. So, how do you navigate the insurance claim process after you’ve caused an accident?
First, your insurance company will have to determine if you’re truly at fault. California is a “comparative fault” state, which is really just a fancy way of saying that car accidents aren’t all or nothing. If the other driver did something that contributed to the crash — like, for example, he didn’t have his lights on at night, and you hit him when you ran a red light — your insurance company may decide that you’re only partially at fault. If that happens, you’ll only be partially responsible for the damage. For example, if you’re only 75% at fault, you’ll only be responsible for paying for 75% of the damages.
How do they decide who’s at fault?
Insurance companies look at a variety of things — including police reports, witness statements, and evidence at the scene (like skid marks). That’s why you should never admit to being at fault at the scene. If you do, it may cause some serious headaches down the road.
No matter what happened, though, you’ll have to cooperate with your insurance company. That means taking part in a recorded interview or even an examination under oath. If you refuse, your claim can be denied altogether.
What happens after you answer all of your insurance company’s questions?
If you’re truly at fault, your liability coverage will kick in. California law requires every driver to have at least $5,000 worth of property damage liability insurance, $15,000 worth of bodily injury liability insurance to cover the injury or death of one person in a crash, and $30,000 worth of bodily injury liability insurance to cover the injury or death of more than one person in a crash.
What if you don’t have enough liability insurance to pay for all of the other driver’s damages?
Just remember liability insurance only covers the OTHER people involved in the crash. If you were at fault, this money WOULDN’T be used to pay for your medical expenses or to fix your car. If you want your insurance company to foot those bills, you’ll need to get separate collision coverage and medical payments coverage (also known as “Med Pay”). Neither of these coverages are required by law in California, so if you want them, you’ll have to talk to your agent about signing up for them.
The other driver has a choice to make — he can either sue you, or he can tap into his under-insured motorist coverage. According to the 2013 Court Statistics Report from the Judicial Council of California (table 5c), nearly 30,000 lawsuits regarding personal injury, property damage, and wrongful death were filed during fiscal year 2011-2012. That comes out to roughly 80 lawsuits filed every single day!
Does this mean that you have to live the rest of your life with the threat of a lawsuit hanging over your head?
No! Someone who was injured in a crash only has two years from the date of the accident to file a lawsuit. If they miss the deadline, the court will refuse to hear the case.
Even if you do get sued before that two year deadline hits, you won’t be hung out to dry. As long as the accident is covered under the terms of your policy, your insurance company will provide you with a legal defense.
What’s going to happen to your insurance rates if you’re at fault in an accident?
There is no one-size-fits-all answer to this question because every insurance company has their own way of determining premium rates. However, you can count on your premiums going up to some extent. Of course, the seriousness of the accident will determine just how much they increase. For example, if you got into a minor fender bender, your rates shouldn’t go up nearly as much as they would if you got into a crash that caused a number of injuries.
One thing you can likely count on? Losing your Good Driver Discount. Thanks to a state law, California drivers who qualify for this discount can save up to 20% on their insurance premiums. However, the law also says that if you’re responsible for an accident that resulted in injury or death to someone, you automatically lose the discount.
What if you have “Accident Forgiveness” coverage?
You’ve probably seen this type of coverage advertised on TV, but it doesn’t necessarily mean that you can count on a whole lot of forgiveness if you’re at fault in an accident. Again, the specifics will depend on the terms of your policy, but many California insurance companies only forgive accidents that resulted in property damage — meaning that if you cause an accident where someone was injured, it won’t be forgiven. And, even if your insurance company decides to forgive you for the injury, you’ll still automatically lose the state-mandated Good Driver Discount.
What if you cause a really bad accident? What if you’re responsible for more than one?
Each insurance company has its own standards for deciding who they insure and how much they charge. Each one also has the right to not renew your policy or to cancel it immediately. Being responsible for a run-of-the-mill crash likely won’t result in a non-renewal or a cancellation. However, if you cause a string of accidents or cause a really bad accident (like, for example, if you get drunk and crash into someone), don’t be surprised if you lose your insurance!
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