Commercials for insurance companies make it sound like they will be there for you if a car accident happens. When you pay your premiums, you expect the insurance company to do what’s right for you.
But insurance companies are businesses, and the main goal of a business is to make money. Because of this, the insurance claims process can be complicated.
Here are nine things car insurance companies may not want you to know:
Insurance companies are more likely than ever to declare a car “totaled” after an accident because it’s better for them.
Generally, insurers will declare a total loss if the cost of repairs exceeds 70 – 80 percent of what the insurer says the car is worth. That may be less than you owe on the vehicle and much less than it would cost to replace it. Since the 1990s, insurance companies have been totaling more and more vehicles because it is cheaper for them than to pay for the necessary repairs. In addition, many cars have expensive components such as rearview cameras and specialized headlights that can make repairs very costly. You can appeal your insurer’s decision to total your car.
What your insurer determines your car value to be may be very different from what you think it is worth.
Insurance companies don’t always use standard sources such as the Kelley Blue Book to determine the value of a wrecked car. They may use a variety of methods, including vendor quotes and a market search of the local area, which may not be your exact neighborhood. The local area could be a less expensive suburb of a city like Syracuse, for example. If you disagree with the valuation from your insurer, make sure to submit solid service records and documentation of any upgrades to the car. Also gather your own local price quotes and ask your insurer to provide you with a written list of local dealers who will sell you a car equivalent to yours at the price they are offering. If you still disagree with the offer, you can take steps to go to mediation or arbitration or go to court.
Making a claim on your auto insurance policy can increase your rates.
The majority of drivers who have an at-fault accident will face a rate increase. Insurance companies won’t tell you how much the increase will be ahead of time, but an industry standard is 40 percent of the company’s base rate for the first accident, or $200 if the base rate is $500. But some insurers choose to increase the individual rate by up to 40 percent or more. This can keep some people from making a claim at the time of an accident. But if your injuries end up being more severe than you thought at first, that expense could be even more costly than a rate increase.
New York’s no-fault insurance laws mean you have to follow certain procedures and meet certain thresholds when making a claim.
You have a limited amount of time to bring a claim resulting from a car accident. Under New York’s no-fault insurance law
, you must file an accident report within 10 days, and you have only 30 days to file a no-fault claim with the insurance company. Typically, you have three years to file a car accident personal injury lawsuit. But New York’s Insurance Law also requires that if you are seeking damages that exceed financial compensation for bills or damage to your car, your injury must meet the threshold for a “serious” injury, as defined buy the law.
Your car has been fixed, but it might be worth a lot less than it was before the accident.
It’s important that you know what kind of parts are being used when your vehicle is repaired, and you should monitor the process. When the other party’s insurer is paying for repairs, you may have the right to opt for original manufacturer parts rather than more generic parts.
You could end up paying for your friend’s bad driving.
If a friend borrows your car and gets into an accident, you may need to file a claim with your insurance company. That will likely raise your insurance rates. And if your friend is uninsured or the accident damage exceeds your policy limits, you may be held liable for the remaining costs and even sued. The best advice is to not let friends borrow your car, especially if they are uninsured.
Your credit history may affect your insurance rates.
Many insurers use your credit history to create an insurance risk score, which helps determine your rates. Spotty credit history can make your rates go up. If you have shaky credit, be prepared to pay more for car insurance. It’s also a good idea to know what’s on your credit report and fix any errors before seeking insurance.
A lawyer can help you with your car insurance claim.
New York insurance laws are complicated. Navigating a car insurance claim can be tricky. A qualified car accident attorney
can guide you through the process.
The car accident attorneys at the New York law offices of Scott C. Gottlieb & Associates, LLP, can help you receive the maximum amount of damages you are entitled to by law.
Call our New York personal injury attorneys toll-free or contact us via our online contact form for a FREE case review.
- Fox Business – What Your Car Insurance Will and Won’t Cover
- MSN Money – 10 things your auto insurer won’t say