What Happens When an Insurance Claim is Made Against You?
Here’s what you need to know to protect yourself and your wallet when an insurance claim has been made against you.
Written by Pat Roache
Reviewed by Kathleen Flear
Under most circumstances, your insurance provider will let you know when an insurance claim is being made against you. However, if the person making the claim contacts you directly, it’s your responsibility to let your insurance provider know.
No matter how careful of a driver you are, sometimes the inevitable happens and you find yourself in an accident when another driver. If you know
what to do after a car accident
, then you’ll likely exchange insurance information or contact information and file a police report—but what happens next?At the end of the day, a third-party claim must be made—suddenly, the inner workings of auto insurance become much more real.
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What happens when you have a car insurance claim against you?
When a car insurance claim is made against you, it simply means that someone is seeking reimbursement for damages that resulted from a car accident that you were involved in. These damages can include:
- Medical bills
- Vehicle damage and other property damage
- Lost wages
- Pain and suffering
An insurance policy that meets your
state’s minimum insurance requirements
will likely cover the accident, meaning your insurance company will handle the payout for the other driver’s expenses.You also won’t be required to pay any deductible for the claim. Deductibles are only charged when you are the one making a claim against your own insurance—not when someone makes a claim against you.
However, there’s a lot more that goes into the claims process. Let’s break it down.
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How do you know if there’s a car insurance claim against you?
You’ll find out that a car insurance claim is being made against you in one of two ways:
- Your insurance company will notify you that a third-party claim has been made against you
- The claimant—aka the third party—will contact you directly.
Most insurance companies require policyholders to give notice if they’ve been in a car accident before a claim has even been made. Failing to let your insurance agent know that you were involved in an auto accident could result in the claim being denied.
Once the claim has been made, an insurance adjuster will review it, which can involve the following:
- Checking your insurance details to make sure it covers the claim
- Investigating the claimed damages
- Reviewing photos, documents, and police reports
- Cross-checking stories from those involved in the accident including motorists, passengers, and other witnesses
If it’s deemed a valid claim that can be covered by your insurance, then your provider will issue an insurance settlement to the third party seeking compensation. You may even be able to
negotiate the settlement offer with your insurance adjuster
.What happens if something goes wrong with a claim made against me?
Always talk to a lawyer about your rights before taking any action if you think something is wrong with a car accident claim against you.
A valid claim that is denied by your insurance company is called a bad faith claim and you have a legal right to contest your provider’s actions. You also have a right to contest any suspicion of insurance fraud.
Seek legal advice if you suspect any of the following issues with a car accident claim made against you:
- Your own insurance provider has denied your coverage over an alleged failure to notify them of an accident before a third-party claim was made against you.
- You believe your insurance company has not acted in good faith, and wrongfully denied coverage for another reason.
- The claim made against you is a fraudulent claim and does not reflect the circumstances of the accident.
How a car insurance claim impacts your insurance
Unfortunately, there’s no getting around this one: a claim made against you will likely raise your insurance rates. If it’s the first claim you’re involved in, then you’ll also lose out on any no-claims bonus offered by your insurance company.
The exact amount your insurance company raises your rates will depend on the extent of the damages, the policyholder’s negligence, and any other claim history. You may be able to get your old insurance premium back if you can prove either a fraudulent claim or a bad faith claim—just make sure to talk to a lawyer first.
If your insurance rates rise after a car accident, you may have trouble finding an affordable policy, but you don’t have to do it alone. The
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Compare insurance quotes from 50+ carriers with Jerry in under 45 seconds
4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversTypes of insurance claims
Claims for an auto accident and other types of damages and losses fall into one of the following categories.
At-fault claims
An at-fault claim is one for which you are deemed to be responsible. These are typically made against you. For example, if a successful claim that’s been filed against you is for rear-ending a driver while you were distracted by your phone—that would be an at-fault claim because you would be found responsible.
Non-fault claims
A non-fault claim is a successful claim that you file against another driver. For example, if you file a claim against a driver who ran a red light and side-swiped you—that would be a non-fault claim because you are not at fault in the accident. A claim for a hit-and-run would also be considered a non-fault claim.
Partial-fault claims
A partial fault claim is one where the fault is shared between those involved in the accident. The insurers of both parties involved will assess the circumstances of the accident to reach a settlement agreement based on how they see the share of fault between the two parties.
Finding cheap car insurance—even after a claim
If you are facing a car insurance claim—don’t panic. A lawyer can help protect your rights, and if everything goes smoothly, your insurance will cover the claim. The biggest consequences you’ll face are a loss of your no-claims bonus and a raise to your insurance rates—that’s where the
Jerry
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car insurance
after a claim can feel impossible, but not with Jerry on your side. A trusted comparison tool
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FAQs
Will there automatically be a car insurance claim after a car accident?
No. A claim would have to be issued by a third party involved in the car accident. The others involved may not even choose to file a claim if there’s not any major damage or personal injury to justify the claims process.
Even so, most insurance companies require notification when you’ve been in an accident so they can at least know to expect a claim.
What happens after a claim is filed?
Your insurance company will notify you when a claim has been made against you. An insurance adjuster will then review the validity of the claim. In a valid claim, your provider will issue a settlement to the third party.
The primary consequences you’ll face include a loss of any no-claims bonus and a raise in your insurance rates.
