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How Does Insurance Work in a Car Accident?

Car insurance.  We all know it’s important.  In most states, it’s even a required component of being able to drive a car.  In Georgia if you want to drive you need at least $25,000 in liability coverage. We also know that car insurance is supposed to help make us whole and get us back on our feet in the event of an accident.  But for all the things we do know about insurance and our vehicles, very few people know the ins and outs of how insurance works.  If you’ve been involved in an auto accident, or if you’re just looking to shore up your knowledge just in case, here are the basics of how automobile insurance works in the event of a car accident and the steps you need to take to protect your legal rights.

Liability vs. Full-Coverage

The first thing to understand when it comes to auto insurance and accidents are the differences between the two main types of insurance most drivers carry.  Full coverage accident insurance generally means that regardless of who is at fault, the driver holding the policy is paying for their insurance company to provide reimbursement for any damage or injury in the event of an accident.  The reason is you may have med pay, or uninsured motorist coverage to help you.  This type of insurance is typically costlier than liability because it provides you with additional types and amounts of coverage.

In liability insurance, your insurance company will only pay out for any damages for which you are liable.  If you are found to be at fault, you’re covered up to your policy limits to make the other driver whole and vice versa.  If, however, the other driver is at fault, it’s up to you to try to collect from their insurance policy if any.  While this option costs less in monthly premiums, it may leave you without enough money to compensate you for your injuries.

Submitting a Claim

Now that we know the what let’s talk about the how.  The insurance process will begin with the submission of a claim.  Drivers can do this on their own by reaching out to either their own or the other driver’s insurance company.  While drivers can do this without legal representation, depending on the facts of the case, it may be in their best interest to hire a lawyer to act on their behalf in this process.  Even your insurer is ultimately in the business of creating and maintaining a profitable business.  If there are questions or fault, murky accident details or complicated scenarios regarding insurance carriers, insurance companies will often try to spin the facts to be favorable to their position and bottom line.  On that point, never give a recorded statement to an insurance company.

Inspection of Damage and Claims Adjustment

After the initial fact gathering and claims submission, the insurance company will collect evidence regarding the accident.  This will include any available police reports, photos of the scene of the crash and witness statements.  The insurance company or their representation will also inspect the vehicles involved and damage thoroughly documented.  This will be a critical part of both reconstructing the accident and claim adjustment or assigning a dollar value to the damage.  It’s important that you not repair or alter your vehicle before thorough documentation.  This also extends to photographs of any physical damage since bruises or injury can heal quickly, removing the evidence of their severity.  Make sure you take plenty of photos of your injuries and the damage to your car.

Determination of Liability and Payout or Repair

Finally, the insurance company will use the entirety of the information gathered during the initial claims submission and investigation process to assign liability.  Depending on the laws in your state, a finding of partial liability on your part may severely reduce or altogether eliminate your ability to recover funds.   In Georgia, if you are 50% or more responsible for the crash then you cannot recover anything.  The insurance company will then issue a check.

In some cases, you may not agree with the determination of the insurance company.  The insurance company’s word is not final and that you can always seek legal counsel at any stage before accepting payout.  Even if an insurance company has issued a check, if you have not cashed the funds or signed away your rights by signing a “Release” there may still be time to negotiate or, as a last recourse, file a lawsuit to get the results you deserve.  If you have recently filed a claim or have had a determination that is less than what you believe to be a fair compensation for your injuries or damage, remember that you can always consult legal counsel to help fight for your rights or walk you through the insurance claim process.