Accidents & Claims

ALL ACCIDENTS OR CLAIMS MUST BE REPORTED DIRECTLY TO YOUR INSURANCE COMPANY*

WHAT TO DO:

Accidents/Claims Information

So You've Had an Automobile Accident. As difficult as it may seem, it is important to remain as calm as possible after experiencing an accident. If someone is hurt, contact the paramedics and the police. It is always a good idea to call the police from the scene of an accident. Each police jurisdiction has different criteria for police reports. If the police decide not to come to the scene of the accident, then ask for direction on filing a report at the station. With or without a police report, it is your responsibility to gather as much pertinent information about the accident as possible.

Try to gather the following information:

Take down the license plate number of all vehicles involved. Try to get complete names, addresses, phone numbers, and drivers license numbers of all other drivers, along with the registered owner's name for each vehicle. Try to get the name and agents name for the registered owners insurance company. See if there were any witnesses, as they could be very important later should there be a question as to which driver was at fault. Obtain the complete names, addresses, and phone numbers of each witness and always carry a pen or pencil, and a notepad in the glove compartment, so you will always be prepared in the case of an accident.

*Your Insurance company contact information can be located on your Insurance Identification card

HOW TO REPORT A CLAIM

What's Next?

When you are involved in an accident, you need to contact your Insurance Company directly and report the accident. A claim number and claims adjuster will be assigned to you. The driver should give a complete, detailed accident report, including any witness information. As part of the investigation, other drivers and witnesses will be contacted. If you have medical or uninsured motorist claims, then you will be required to provide documentation as to your injuries, medical expenses, and lost wages. Ask questions if there is anything you don't understand or with which you don't agree. The adjuster should be able to address your questions and concerns.

The Fair Claims Settlement Practices Regulations require that insurers acknowledge receipt of your claim within 15 days. Upon receiving proof of claim, every insurer shall immediately, but in no event more than 40 days, conduct an investigation and either accept or deny the claim in whole or in part. When settlement is reached, the insurer has up to 30 days to make payment. If the investigation takes longer than 40 days, then insurer must notify you in writing that additional time is needed, and issue a written claim status every 30 days thereafter. A denial must contain a statement listing all basis for such rejection. When you make a claim for damages to your automobile, the insurance company will decide whether to repair your vehicle or declare it a total loss. Generally, if the cost to repair your vehicle is higher than the fair market value of the vehicle, the company will declare it a total loss. Read your policy carefully to determine when your company can declare your automobile a total loss. If the insurance company decides your vehicle is to be repaired, then the insurer must give you a copy of the estimate to repair. If you obtain an estimate which exceeds the insurer's estimate, then the insurer must reasonably adjust any written estimates or furnish you the name of at least one repair shop which will complete the repairs for the amount of the insurance company's written estimate. Betterment or depreciation may be assessed against the settlement amount, but it must accurately reflect the value of such deductions. An example of betterment would be the company painting your entire vehicle due to old oxidized paint, when only the front fender of the vehicle was damaged. A new paint job puts you in a better condition than you were before the accident occurred. If your vehicle is declared a total loss, then the insurance company must replace it with a comparable vehicle or pay the actual cash value of your vehicle. The actual cash value of a vehicle is the fair market price of the vehicle if it was offered for sale in your local area. The amount of the settlement must include sales tax and license fees. If you are not advised at the time of settlement where a comparable vehicle can be purchased, and you are unable to locate one on your own within 35 days after receiving the claim payment, then you need to notify the insurer. The insurer must then re-open the claims file and make further efforts to adjust your loss.

The insurer also has the responsibility to determine which driver is at fault. Under the law, if you are found to be 51% or more at fault, and there is a total of $500 ($750 as of 1/1/03) in property damage, or if there are any injuries, you will be assessed a surcharge. This means there will be an increase in your premium for the next 36-month period.

Auto Body Repair Shops

Under California insurance Code ©758.5 an insurance company cannot require that an automobile be repaired at a specific repair shop. However, an insurance company can recommend that an automobile be repaired at a specific repair shop under the following conditions outlined by law:

The consumer specifically requests a recommendation from the insurance company to a repair shop.
The consumer has been informed in writing of the right to select a repair shop of his or her choice.
If the consumer agrees to use the recommended repair shop, the insurance company must restore the damaged vehicle to its condition prior to the accident or loss with no additional cost other than as stated in the policy or as otherwise allowed by law.
If the company makes an oral recommendation to a repair shop, and it is accepted by the consumer, then the company must follow the oral recommendation with the prescribed written notice within five calendar days as specified by law.

If the vehicle is repaired in a shop chosen by the consumer, then the insurance company must pay the reasonable costs to repair the vehicle in a workmanlike manner. The insurance company is prohibited from limiting or discounting reasonable repair costs based on charges that would have occurred if the vehicle had been repaired at the company's recommended repair shop. Also, the insurance company must stand behind the repairs of the recommended shop if the vehicle is not repaired properly.

Auto Replacement Parts

In some cases an auto repair may include replacement of damaged parts with after-market parts. After-market parts are parts which are not made by the original manufacturer. After-market parts may be equal, better, or worse in quality than original equipment manufacturer parts. Although non-original equipment manufactured replacement parts can be used to repair your vehicle, any such part must be comparable to original equipment manufactured parts in terms of kind, quality, safety, fit, and performance. Consumers should take note of the following:

An auto repair shop is required to provide a written repair estimate of the cost of repairs prior to initiating repairs to the vehicle. Once the work is completed, the shop must then provide a written repair invoice. State law requires that the type of auto parts used in repairs must be identified on the repair invoice. Consumers should carefully check their invoice to ensure that the auto body shop has identified each auto part replaced as being used, reconditioned, rebuilt, an original equipment manufactured part, or an after-market part.

Your Rights Under the Fair Claims Settlement Practices Regulations In general, insurance companies are required to do the following:

Advise you of all benefits, coverage, time limits or other provisions of your insurance policy.
Acknowledge your claim, start the investigation, provide forms and instructions, and provide reasonable assistance immediately but in no event later than 15 days after receiving notice of claim. Notice of claim is any written or oral communication to the insurance company which reasonably apprises the insurer that you wish to make a claim.
Respond to communications received from you immediately, but in no event later than 15 days.
Accept or deny your claim immediately, but in no event later than 40 days after receiving proof of claim. Proof of claim is documentation in your possession which provides any evidence of the claim and supports the magnitude or the amount of the loss. Estimates of repair, a police report indicating damages of theft, and photographs of actual physical damage, are all examples of proof of claim documentation.
Pay reasonable towing expenses. If the insurer has provided the name of a specific towing company, and you use another towing facility, this may jeopardize any towing reimbursement.
Offer a fair settlement. If you suffer a total loss, then the settlement must include taxes, license, and transfer fees. The settlement must reflect the value of a comparable vehicle of like kind, condition, and quality. If you retain the salvage vehicle, then the deductions from the settlement for salvage must be fair, measurable, and discernible.
Pay the claim immediately once it has been accepted, but in no event later than 30 days from the date settlement was reached.
Advise you whether or not they will pursue their subrogation rights. Subrogation is a special unit within an insurance company which attempts to gain reimbursement from other insurance companies when you are determined to be not at fault. If the insurance company pursues subrogation they must include your deductible, unless you have recovered your deductible already.
Provide reasonable notice that the company will cease paying for storage (if vehicle is stored as result of an accident). The above represents a paraphrased overview of some of the Fair Claims Settlement Practices Regulations effective 5/10/97. You may view a complete copy of the Regulations by visiting the CDI Web site located at www.insurance.ca.gov

Automobile Insurance Fraud

Red Flags Automobile insurance fraud in California has historically taken several forms. The most common fraud schemes involve automobile property and automobile accidents. Automobile Property - This type of fraud most often involves dishonest auto body and repair shops and/or insureds who may employ a variety of illegal or questionable techniques including:

Reporting parts of vehicles as damaged or lost when in fact they were not damaged or lost prior to the shop receiving the vehicle.
Making final cost in excess of the original estimate of damage.
Billing for repairs that were not authorized.
Charging for genuine parts when after-market or used parts from junkyard were used.
Pounding out dents or using bondo when charging for brand new auto parts.
Falsely reporting stolen vehicles or vandalism of vehicles in order to collect insurance monies.

It is always very important for the consumer to review carefully all paper work from auto body and repair shops in order to protect against potential fraud. Also, consumers should be cautious of any auto body or repair facility that makes referrals to medical or legal offices. This practice may be an indicator of "capping." Capping (a felony in California) is the illegal referral of clients to legal offices for a fee.