Many people who pay for car insurance will never need to use their coverage. Unfortunately, car accidents do happen however, and the odds are that you will be involved in an automobile crash at some time in your life. In order to prepare for that possibility, you should take the time to understand how your insurance coverage works and what happens when you file a claim.

What is a car insurance claim?

When you purchase auto insurance, you enter into a contract wherein the insurance company agrees to pay for damage to your vehicle and any other vehicles you are responsible for damaging; in return, you pay regular insurance premiums. Insurance companies make their profit by receiving more money in premiums than they need to pay to cover damage.

A claim is the way you make your insurance company honor the contract between you. Because you purchase specific coverage, you know in advance what your insurance company will pay for. Whenever you are involved in an accident, the coverage you buy is applied toward the costs of the damage.

What happens when you file a claim?

Whenever you file a claim, your insurance company will obtain information from you about what happened in the accident. Usually, you will file a claim either by calling your insurance company’s claim department or contact your insurance agent. You may also be able to file the claim online or using a smartphone application if your insurance company has that technology available.

However you file, you will need some basic information about the accident in order to file the claim. You will need to know the year, make and model of every vehicle involved in the collision; the name, contact information and insurance information of everyone in the accident; and a brief description of what occurred in the accident.

Once you have filed the claim with your insurance company, you will need to make an appointment for the vehicle to be inspected. Different companies handle this inspection in different ways; they may send someone to your home to look at the vehicle, or schedule an appointment for you to drive it to them. You might be able to bring your vehicle to a repair shop that works directly with the insurance company and have the repairs completed without needing a separate inspection.

After your vehicle is inspected, your insurance company will provide you with an estimate and, in most cases, payment for the damage. Any deductible you owe is subtracted from the total of your repairs; you owe the deductible to the repair shop at the time repairs are completed.

If the damage to your vehicle is extensive, or if the repairs would cost more than the vehicle is worth, then your car would be considered a total loss. Once a vehicle is totaled, the insurance company pays you the actual cash value of the vehicle less any deductibles. The company will then take the vehicle away to a stock yard. At this point, you may choose to buy back the vehicle at its salvage price, allowing you to retain the vehicle on a limited title called a salvage title.

If you are not at fault for an accident, your insurance company will file against the at-fault party’s insurance in a process called subrogation. Subrogating enables an insurance company to recover the money it spends and reimburse your deductible. The subrogation process begins as soon as your payment is issued.

How long does it take to process a car insurance claim?

Depending on how you choose to file and how complicated the claim is, you can expect your claim to take between 15 to 30 minutes to file. You can make the phone call go more smoothly by gathering all of the information that you need before making the call.

Once the claim has been filed, the time it takes to settle will depend on how quickly your vehicle is inspected. Usually, the insurance company will try to settle the claim as quickly as possible after the initial call is made. You can expect to receive a payment shortly after the inspection, if not the same day.

Subrogation can take longer. In some cases, it may take several months to receive your deductible reimbursement. If the accident had unclear liability or if there are any discrepancies between the story of your insurance and the other party, the claim may take awhile to arbitrate.

Overall, most car insurance companies try to settle claims within 30 days of their occurrence. Of course, some claims can stay open much longer, especially if there are injuries involved or any additional investigations needed.