Since there is no set rule for how insurance companies process claims brought to them, the process can differ greatly amongst insurance companies. However, most insurance companies undertake the steps outlined below. Here is a general overview of what you can expect when you file a car insurance claim.
An insurance adjuster will meet with you, the policyholder, to assess the damage done to your car. Pictures will be taken, and an estimation of the cost of repairs will be given to you and the insurance company. It’s a good idea to have your own pictures beforehand to make sure there are no discrepancies between the damages the adjuster assesses and the ones you are accounting for.
Depending on the insurance company, you may be offered a rental car to drive while your car is being repaired. It's important to keep in mind when renting a car that the time between the assessment and receiving a check can typically take up to 30 days. During that time, you may or not be paying for a rental car in between. Some policies cover this cost while others don’t so make sure to stay on top of it. “Rental reimbursement coverage” is helpful to have in these types of situations. Ask your policy provider about it.
After the assessment, money is mailed by check directly to the policyholder based on the amount determined by the insurance adjuster.
An important thing to note here is that should there still be a loan out against the vehicle, a check will still be mailed to you, but your lender’s name will also be on the check. In most situations, the lender is a bank, and you will be required to visit the bank to formally notify them of your intent to repair the vehicle. Checks are paid out in a number of ways—either to the policyholder or directly to the body shop. This is something you should coordinate with the body shop in advance.
A full and detailed description of what is to be done to the car should be outlined before you enter an agreement with the body shop. Body shops can easily manipulate these situations by adding unforeseen costs to the bill, that you will have to pay, so make sure you secure an overview of the repair costs in writing beforehand. Many times, a repair shop can sign off on an adjuster’s assessment as well to ensure this doesn’t happen.
Things to keep in mind:
Depending on your insurance company, the assessment process, and thus the check you receive can vary greatly. It can be a good idea to get a policy where the check is mailed directly to the body shop. This will ultimately mean that the body shop will not get paid unless it has completed its repairs. Insurers will often also require a pre-determined number of estimates from different body shops. The drawback to this is that the insurer can then choose which body shop to proceed with regardless of your preference. Keep all of these things in mind when considering a policy and subsequently filing a claim.
The Bottom Line
Many people choose auto insurance policies based on their claim payout method. It is good to know what a company's payout method is before selecting a particular plan. If you prefer to be more hands-off, a more suitable choice might be a policy where the body shops are directly paid and chosen by the insurer. However, if you like to have more control over the process, then having the check mailed to you directly might be the better option. With the latter, make sure to be diligent about where the money goes and how it is used.