You’ve paid a lot of money for car insurance over your lifetime, and now your car got rear-ended so you finally have a claim. The other driver says that you stopped suddenly for no reason – so he is trying to blame the accident on you. Before you call your insurance agent, it might help to know your options.
Option A: Because you were rear-ended, the accident is probably going to be 100% fault of the other driver. In this particular case your first option is to call the other driver’s insurance company and ask them to pay for all damages to your car, including a loaner car while your car is in the shop being fixed. In most cases, they will take care of you with no problem, so this claim doesn’t even need to be reported to your own insurance company.
There is a small chance that the other driver’s insurance company may try to assess you with partial blame – perhaps up to 20% of the fault. The problem is that you are left alone to fight against this settlement and 20% out of your pocket is a lot of money.
Option B: If the other company tries to unfairly assess you with blame, you can make a complaint to the commerce department. No insurance company wants to be forced to answer to the commerce department because of the extra time and expense involved in resolving these complaints, and because higher complaint ratio’s can adversely affect a company’s standing.
You benefit because you have employed the extra muscle of the commerce department to back you up – and you still have not made any claim against your own policy.
Option C: Make a claim against your own policy. Here you will have to pay your deductible and pay for your own rental car (unless you have rental car reimbursement coverage) up front. Once your claim is settled, your insurance company will subrogate against the other company to try to recover their damages and your deductible at the same time.
This subrogation process is usually wrapped up within a couple of months, but can sometimes take years depending on the facts and the number of parties involved in a claim.
A good insurance agent will always provide you with options so you can make intelligent choices for your claim situation. In the case above, most people with a good agent will start with option A, knowing that they always have option C in their back-pocket in the case of any trouble.