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If your car was damaged in an accident that was not your fault, then you probably want to know the best way to get the money for your car repairs. Basically, there are three options:
- File a collision coverage claim with your own car insurance company
- File a liability claim with the at-fault person’s car insurance company
- File a lawsuit against the at-fault person in court
If you have collision coverage, we recommend that you go through your own car insurance company. For the reasons below, this is the best option. You will see that “working it out” with the person who hit you is not an option listed here. That is because an informal exchange of money is not recommended for any serious damage.
Will my rates go up if I file a claim with my own car insurance company?
Many people are afraid to make a claim through their own car insurance company because they think their insurance rates will go up. In many states that fear is justified. Fortunately, California voters passed Proposition 103 in 1988, placing legal restrictions on when insurance companies are allowed to raise their rates (Cal. Ins. Code § 1861.02).
In California, your car insurance company cannot increase your premiums (or remove “discounts”) because you made a collision coverage claim when you were not at fault. Therefore, your premiums should not be a consideration when choosing whether to file your collision claim to get your car fixed.
Which insurance company will treat me better?
If you make a collision coverage claim with your own car insurance company, then you are the customer. That means your car insurance company has a financial incentive to do a good job with your claim so that you continue to pay their premiums instead of leaving for a competitor. And since car insurance policies are legal contracts, your car insurance company has the legal duty of good faith and fair dealing towards you.
If you make a liability claim with the at-fault person’s car insurance company, then you are not the costumer and there is no legal duty of good faith and fair dealing towards you. The adverse car insurance company’s profit motive will be the driving factor, so you should expect cheap estimates and long delays.
If you want your car fixed right and on time, then you are better off going with your own car insurance company.
Won’t I have to pay a deductible if I use my collision coverage?
The downside to going through your own car insurance company is that you will likely have to chip in your deductible. However, your car insurance company will try to recover the cost of repairs from the at-fault party or their car insurance company. Your car insurance company will do all the work for you (this is called “subrogation”). If they succeed in getting the money back, then they will refund your deductible to you.
If you were injured in a car accident, then contact an experienced personal injury lawyer to see if you are eligible for compensation.