1-800-927-4357
www.insurance.ca.gov
California Department of Insurance
ACCIDENT
What’s Next?
So You’ve Had An
Dave Jones, Insurance Commissioner
Dave Jones
Insurance Commissioner
Dear California Consumer:
e California Department of Insurance (CDI) is the nation’s
leading consumer protection agency and your best resource for
honest and impartial answers to insurance questions.
We have knowledgeable insurance professionals stang our
consumer hotline. My sta is available to help you get answers
to insurance related questions, le a request for assistance, or
report suspected insurance fraud.
Call 800-927-HELP (4357) or visit www.insurance.ca.gov to
view all of our consumer information guides and insurance
resources. ese tools are available to consumers for free.
ank you for giving us the opportunity to serve you.
Sincerely,
Dave Jones
California Insurance Commissioner
Introduction............................................................................. 3
What to do if there is an accident.................................... 4
Frequently asked questions............................................... 5
Things to avoid ..................................................................... 5
Accident Checklist ......................................... Center Page
Important Tips...................................................................... 11
Your rights under the Fair Claims Settlement
Practices Regulations........................................................ 12
Automobile Insurance Fraud............................................14
Auto Body Repair Shops.....................................................15
Auto Replacement Parts.....................................................16
Quick overview for Spanish readers ..............................17
Talk to the Department of Insurance.............................18
TABLE OF CONTENTS
3
Driving on California’s highways can be a risky proposition.
Whenever you are in a vehicle, there’s a risk of being involved in
a trac accident. Whether it’s a small “fender bender” or a major
injury accident, knowing in advance what to do can help you
avoid costly mistakes. This guide discusses what to do after an
accident and what to expect when you le a claim with your
insurance company.
For your convenience, an accident checklist is contained herein
which can be kept in your vehicle for future reference.
When purchasing insurance, carefully review the application
before signing to determine if the coverages, policy limits,
and deductibles are suitable for your needs. After you receive
the policy, review the declaration page. It contains important
information about the covered drivers, identies the vehicles
insured, as well as the coverage limits amounts and deductibles.
Make sure the information is correct and the coverage is what
you purchased. If changes are needed, send your request to your
agent and or insurance company in writing and keep a copy.
Use certied mail return receipt requested to verify receipt of your
documents.
Become familiar with your automobile insurance policy so you
will understand it before the need arises to le a claim. Read
the policy thoroughly so you know what is covered and what is
excluded.
INTRODUCTION
4
Q. What should I do at the scene of an accident ?
A. STOP Immediately and move only if it is safe to do so.
• Call 911 if there are injuries.
• Call the police. In some areas, police authorities may respond
to every accident scene. They may consider factors such as the
severity and location of the accident (some police authorities
will not come to the scene if the accident is on private property).
However, you should attempt to notify the police. You should
also be aware that most policies require notication to the police
within a specied time period if the accident is a hit and run.
• Obtain names, addresses, telephone numbers, and driver’s
license numbers from all drivers.
• Obtain license plate(s) and vehicle identication numbers. Ask
to see driver’s license(s) and vehicle registration(s) to verify the
information is accurate.
• Obtain names, addresses, and telephone numbers of other
passengers and any witnesses.
• If you have a camera or a cellphone, take photographs of
the damage, and the accident scene (trac controls, visual
obstacles).
• If the owner of a damaged car or damaged property cannot be
located, leave a note with the names and addresses of the driver
and owners of the involved cars.
• Notify your agent and/or your insurance company immediately.
• If anyone is injured or the vehicle damage exceeds $750.00, you
must report the accident to the Department of Motor Vehicles
within 10 days. Failure to notify the DMV may result in the
suspension of your driver’s license.
What to Do If There Is an accident
5
SOME OF THE MOST FREQUENTLY ASKED QUESTIONS ABOUT
AUTOMOBILE INSURANCE CLAIMS ARE DISCUSSED BELOW.
Q. What happens after I le the claim with my Insurance
company?
A. Your insurance company will contact you for detailed
information regarding the loss and may take a a written or
recorded statement. An examination under oath can sometimes
be requested. As part of the investigation, other drivers and
witnesses may also be contacted. If you have medical payments
or an uninsured motorist claim, you must provide documentation
of your loss (injuries, medical expenses, lost wages, etc.).
Q. What should I do if the insurance company does not
contact me?
A. A claim representative should contact you within a reasonable
period of time after you report the loss. However under certain
circumstances, the insurance company can take up to 15 days to
contact you. If you do not hear from anyone, call your agent or
insurance company for assistance. If they are not responsive, or
you believe there is an unreasonable delay in settling your claim,
contact the Department of Insurance.
THINGS TO AVOID
• Do not argue with other drivers and passengers.
• Save your story for the police and your insurance
company.
• Do not sign statements regarding fault or promise to pay
for the other parties damages.
• If the other party oers to pay your deductible, don’t
sign anything.
• You must show your driver’s license, vehicle registration
card, evidence of nancial responsibility, and current
address to the other driver or persons involved, or to a
peace ocer.
6
Q. How does the insurance company evaluate vehicle
D damage?
A. A qualied adjuster or appraiser usually inspects the vehicle
damage. The adjuster or appraiser then writes an estimate based
on the initial inspection. If further damage is found during the
repair process, the shop will contact the insurer to get approval
for the additional cost of repairs. Keep in mind the insurer may
send out an adjuster to re-inspect the additional damages. If
the damage is relatively minor, the company may instead ask
you to submit competitive repair estimates. Remember, it is
your responsibility to sign and authorize the shop to repair your
vehicle once you are satised with the nal estimate and repair
facility.
Q. What will the company pay on a physical damage
claim under a standard auto policy?
A. Generally, the company will pay the lesser of the following:
• The amount necessary to repair the vehicle or
• The actual cash value (ACV) of the vehicle.
Read your policy to determine what is covered. Pay particular
attention to exclusions and limitations. For example, there
is usually no or limited coverage for enhanced aftermarket
stereo equipment, telephones, or tires and wheels unless it is
Original Equipment installed by the automobile Manufacturer
(OEM). Additional coverage is usually available for such installed
equipment at an additional charge.
Q. What is actual cash value (ACV)?
A. Actual Cash Value - Unless otherwise dened in the policy,
actual cash value in California means fair market value. The fair
market value of an item is the dollar amount that a prospective
buyer and seller are willing to pay and are reasonably
knowledgeable about the asset. They must be behaving in their
own best interest and free of undue pressure to transact.
7
Q. What is an appraisal provision?
A. Most standard policies contain an appraisal provision, which
can be helpful in the event there is a dispute regarding the amount
being offered by the insurance company on a total loss settlement
of your vehicle. Read your policy to see if it contains one. Un-
der this provision, either of you can demand an appraisal. Each
party selects a competent appraiser. The appraisers then select a
neutral umpire. If the appraisers cannot reach a mutually agreed
amount, their differences are submitted to the umpire. An amount
that any two agree upon is binding. Each party pays its own ap-
praiser; the umpire fee is shared.
Q. How is the check or draft prepared?
A. The check can be issued in the name of the insured and any
lienholder, such as a bank or nance company. If the vehicle is
deemed repairable, the company may also include the repair facil-
ity as a payee.
Q. Who is responsible for the balance of a car loan?
A. The borrower is responsible for the balance of the loan, even
if the vehicle is stolen or damaged beyond repair. If your claim
payment is less than the loan balance, the lender will expect you
to pay the difference. Coverage commonly referred to as “gap” in-
surance can usually be purchased to protect against this situation.
Q. Will the insurance company pay for a rental car while
mine is being repaired?
A. Yes, if you have purchased rental vehicle coverage. Review
your policy before you rent a vehicle. Although policy limits vary,
the company pays up to a specied amount per day for a speci-
ed number of days. The coverage ends when your vehicle is
repaired, the loss is paid or after the specied period, whichever
comes rst.
If your vehicle is stolen, the policy may automatically provide trans-
portation expenses. Again, review your policy to be sure. This
type of coverage usually begins 48 hours after the theft and ends
when your vehicle is recovered, the loss is paid or after a specied
period, whichever comes rst.
8
Q. What is a collision damage waiver and will the insurance
company pay these charges for the rental vehicle?
A. The terms of the rental agreement make the customer responsible
for collision damage while he or she has possession of the vehicle.
Additionally, rental companies insure themselves for damage to the
vehicle caused by collision. For an additional fee, the rental company
will waive all or a portion of the customer’s obligation to pay repair
costs for damage to the vehicle caused by collision. Both the amount
of the fee and the language of the waiver vary. Coverage for collision
damage to the rental car under your personal automobile policy
depends upon the policy language. Read your policy carefully. Ask
your agent or company before you rent a vehicle.
Q. What is the salvage value?
A. This is the remaining value of your damaged vehicle if your
vehicle is determined to be a total loss. It is usually determined
through bids from salvage buyers. The company may sell the salvage
to the highest bidder. However, it is not obligated to do so. If you
decide to keep the damaged vehicle, the highest salvage bid may be
deducted from your settlement. In effect, you are “buying back” your
vehicle for the salvage value. If you retain possession of the salvaged
vehicle, it is your responsibility to le a salvage certicate with the
Department of Motor Vehicles.
Q. What is subrogation?
A. Subrogation is the right of the insurance company to recover
from a third party the amount of damages it paid to you. For example,
if another party is at fault in an accident that damages your car, and
you have a collision claim, your company will ask the other party to
reimburse the money it paid on your claim. The policy requires your
cooperation with the company’s subrogation efforts. Also, you cannot
do anything that jeopardizes the company’s right of recovery. For
example, you cannot sign an agreement releasing the other party in
exchange for payment of your deductible.
9
Q. Is the insurance company required to help me
recover my deductible?
A. Yes and no. The insurance company must advise you as to
whether or not they intend to pursue subrogation. If the company
pursues subrogation, they are required to include your deductible
as a part of the process. However, if the company does not pursue
subrogation they are required to advise you of that fact so that
you may pursue your deductible on your own. If their efforts are
successful, in whole or in part, most companies will reimburse you
in accordance with the recovery. For example, if 100 percent of
the paid claim is recovered, you will receive 100 percent of your
deductible; if the recovery is 65 percent, you will receive 65 percent
of your deductible. Any expenses or fees (e.g., legal fees, incurred
by the company in its recovery efforts) will be apportioned between
the company and you, if recovery is made. However, if you choose
not to have the company include your deductible in its efforts, you
can seek recovery directly from the other party on your own. But
before you do, discuss the matter with your insurance company to
avoid jeopardizing its recovery.
Q. Is the car covered outside of California?
A. Most policies provide coverage in other states, U.S. territories
and possessions, and Canada. As is the case in California, many
other states and territories have enacted nancial responsibility laws
requiring drivers to carry a specied amount of automobile insurance
to cover losses resulting from ownership or operation of a motor
vehicle. If the nancial responsibility requirements where you are
traveling are higher than your policy limits, your company will meet
the higher requirements. Most policies do not provide coverage in
Mexico, so if you plan to drive your car there, it’s wise to buy that
coverage separately. Check your out-of-state coverage before you
travel.
California’s nancial responsibility law is set forth commencing with
Section 16020 of the California Vehicle Code. Among other things,
it requires all drivers to be able to pay damages resulting from
ownership or operation of a motor vehicle.
10
Drivers must show ability to pay damages (nancial responsibility) of
a minimum of $15,000 for each person injured or killed in an accident,
$30,000 for injury/death of two or more persons in one accident, and
a minimum of $5,000 for property damage in any one accident. If you
are cited by a peace ofcer for a moving violation, or are involved in an
accident, you may be asked for written proof of nancial responsibility.
This can be done by recording the name of your insurance company
and policy number on the vehicle registration card issued by the DMV.
This proof of insurance should be kept in the vehicle or a place where
it will always be available when driving. For further information, contact
the California Department of Motor Vehicles.
Q. What should be done if you are served with a lawsuit
(Summons and Complaint) as a result of an accident?
A. Notify your agent and insurance company immediately. Keep a
copy for yourself and mail or deliver the original documents to your
company. Do not give statements or discuss the accident with anyone
except a veried representative of your company. If the lawsuit arises
out of a covered loss, your company will provide legal defense.
Q. Is a newly acquired vehicle covered?
A. Most policies provide automatic coverage for a vehicle that
replaces a vehicle already on your policy. The coverage normally is
the same coverage you had on your previous vehicle. Notify your
broker-agent as soon as possible of any replacement vehicle. If you
wish additional coverage, there is usually a requirement that you notify
your agent or your company within a designated time period.
Most policies also provide automatic coverage for a newly acquired
vehicle that is an addition to the vehicles you already have on your
policy. There are usually specic conditions that must be met.
Most automatic coverage provisions require that the insured notify
the insurer within 30 days of acquiring the new vehicle if the insured
wants it covered under the existing automobile policy. Be aware
that some policy notication periods can be less than 30 days.
Some insurance company’s notication periods are 14 days or less.
If the insured fails to notify the insurer of the newly acquired vehicle
within the specied time, the vehicle will be uninsured. Unless there
is a specic notice procedure in the insurance policy, an insured’s
verbal notice to his or her insurance agent can be deemed sufcient
to trigger the automatic coverage for a newly acquired vehicle.
11
1
. Read your policy. Don’t wait until after an
accident.
2
. If you don’t understand your policy, ask your
agent and/or company for clarication.
3
. If you have an accident, call the police. If
there are injuries, call paramedics.
4
. Get as much information as possible at the
accident scene to furnish to your agent and/or
insurance company.
5
. Immediately notify your agent and/or
insurance company of an accident.
6
. Cooperate with the insurance adjusters/
investigators to aid in their efforts.
7
. If you don’t understand something about
the claims procedure, ask your agent and/or
insurance company representative to explain.
8
. Notify your agent or company in writing of any
change in your vehicle ownership.
IMPORTANT TIPS
12
YOUR RIGHTS UNDER THE
FAIR CLAIMS SETTLEMENT
PRACTICES REGULATIONS
In general, insurance companies are required to do the following:
• Advise you of all benets, coverage, time limits or other
provisions of your insurance policy.
• Acknowledge claim, start investigation, provide forms and
instructions, and provide reasonable assistance immediately but
in no event later than 15 days after receiving notice of claim.
(Notice of claim is any written or oral communication to the
insurance company which reasonably apprises the insurer that
you wish to make a claim).
• Respond to communications received from you immediately but
in no event later than 15 days.
• Accept or deny the claim immediately but in no event later
than 40 days after receiving proof of claim. Proof of claim is
documentation in your possession which provides any evidence
of the claim and supports the magnitude or the amount of the
loss such as estimates of repair or police report indicating theft
of your vehicle, et cetera.
• Unless the insurer has provided you with the name of a specic
towing company prior to your using a towing facility, the insurer
must pay reasonable towing expenses.
• Offer a fair settlement. If you suffered a total loss, settlement
must include taxes, license and transfer fees. The settlement
must reect the value of a comparable vehicle of like kind and
quality. If you retain the salvage, deductions from the settlement
for salvage must be fair, measurable, and discernible.
13
• Once the claim has been accepted, the insurer must pay the
claim immediately, but in no event later than 30 days from the
date settlement was reached.
• Advise you whether or not they will pursue subrogation. If the
insurance company pursues subrogation, they must include
your deductible unless you have already recovered your
deductible.
The above represents a paraphrased brief overview of some of
the Fair Claims Settlement Practices Regulations. You may view
a complete copy of the Regulations by visiting the CDI website
located at www.insurance.ca.gov.
14
AUTOMOBILE INSURANCE
FRAUD
Automobile insurance fraud in California historically has
taken several forms. The most common fraud schemes involve
automobile property and automobile accidents.
Automobile Property - This type of fraud most often involves
dishonest auto body and repair shops and/or insureds who may
employ a variety of illegal or questionable techniques including:
• Reporting parts of vehicles as damaged or lost when in fact they
were not damaged or lost prior to the shop receiving the vehicle.
• Making nal cost in excess of the original estimate of
damage.
• Billing for repairs that were not authorized.
• Charging for genuine parts when aftermarket or used parts from
a junk yard were used.
• Pounding out dents or using bondo when charging for brand
new auto parts.
• Falsely reporting stolen vehicles or vandalism of vehicles in
order to collect insurance monies.
It is always important for the consumer to review carefully all paper
work from auto body and repair shops in order to protect against
potential fraud. Also, consumers should be cautious of any auto
body or repair facility that makes referrals to medical or legal of-
ces. This practice may be an indicator of “capping.” Capping (a
felony in California) is the illegal referral of clients to legal ofces
for a fee.
15
Automobile Accidents - Automobile fraud often involves orga-
nized auto accident rings. Staged auto accidents, which are not
accidents at all, follow several basic schemes including:
• Suddenly stopping for no apparent reason
• Intentionally disregarding the right-of-way
• Giving up the right-of-way in order to cause an accident
• Claims report list passengers who were not in the vehicle
at the time of the accident
• Witnesses are listed who were not at the scene of the
accident
• Injuries claimed are excessive compared to vehicle
damage
• Driver has a temporary vehicle registration
• Prior damage to the other vehicle
• Contact by an attorney without being solicited
If you have been in an auto accident, be cautious of any unsolic-
ited referral to a body shop, law ofce or medical ofce. Organized
accident rings and cappers actively solicit others in the commu-
nity to participate in the creation of accidents. Often these ac-
cidents only exist on paper (referred to as paper accidents), and
no innocent parties are involved. Paper accidents have gained in
popularity among fraud perpetrators, as they are less dangerous
from a bodily injury standpoint, and there is less likelihood of police
involvement.
AUTO BODY REPAIR SHOPS
Under California Insurance Code §758.5 an insurance company
cannot require that an automobile be repaired at a specic repair
shop. However, an insurance company can recommend that an
automobile be repaired at a specic repair shop under the follow-
ing conditions outlined by law:
• The consumer specically requests a recommendation from
the insurance company to a repair shop.
• The consumer has been informed in writing of the right to
select a repair shop of his or her choice.
• If the consumer agrees to use the recommended repair
shop, the insurance company must restore the damaged
vehicle to its condition prior to the accident or loss with no
additional cost other than as stated in the policy or as
otherwise allowed by law.
16
• If the company makes an oral recommendation to a repair
shop, and it is accepted by the consumer, then the company
must follow the oral recommendation with the prescribed writ-
ten notice within ve calendar days as specied by law.
If the vehicle is repaired in a shop chosen by the consumer, then
the insurance company must pay the reasonable costs to repair
the vehicle made in accordance with accepted trade standards for
good and workmanlike automotive repairs.
• The insurance company is prohibited from limiting or discount-
ing reasonable repair costs based on charges that would have
occurred if the vehicle had been repaired at the company’s rec-
ommended repair shop.
• Also, the insurance company must stand behind the repairs of
the recommended shop if the vehicle is not repaired properly.
AUTO REPLACEMENT PARTS
In some cases an auto repair may include replacement of dam-
aged parts with after-market parts. After-market parts are parts
which are not made by the original manufacturer. After-market
parts may be equal or better in quality than (OEM) original equip-
ment manufacturer parts. Although non-original equipment manu-
factured replacement parts can be used to repair your vehicle, any
such part must be comparable to (OEM) original equipment manu-
factured parts in terms of kind, quality, safety, t and performance.
Consumers should take note of the following:
• An auto repair shop is required to provide a written repair
estimate of the cost of repairs prior to initiating repairs to the
vehicle. Once the work is completed, the shop must then
provide a written repair invoice. State law requires that the
type of auto parts used in repairs must be identied on the
repair invoice. Consumers should carefully check their
invoice to ensure that the auto body shop has identied each
auto part replaced as being used, reconditioned, rebuilt, after-
market or an original equipment manufacturer part (OEM).
17
Consejos importantes
A quick overview for our Spanish readers.
So you’ve had an Accident, What Next?
1. Lea su póliza. No espere hasta tener un
accidente.
2. Si no entiende su póliza, pida una aclaración a
su agente o a su compañía de seguros.
3. Si tiene un accidente, llame a la policía.
Si hay lesiones, llame a los paramédicos.
4. Obtenga la mayor cantidad de información
posible en el lugar del accidente, para
entregársela a su agente y/o a su compañía de
seguros.
5. Notifique inmediatamente a su agente y/o a su
compañía de seguros si tiene un accidente.
6. Coopere con los tasadores e investigadores de
la compañía de seguros.
7. Si no entiende algo sobre el procedimiento de
las reclamaciones, por ejemplo, la cantidad
de la oferta de liquidación, pida a su agente y/o
a su compañía de seguros que se lo expliquen.
8. Notifique por escrito a su agente o compañía
de seguros cualquier cambio en la propiedad de
su vehículo.
18
Talk to the
Department of Insurance
We are the state agency that regulates the insurance industry.
We also work to protect the rights of insurance consumers.
Contact the California Department of Insurance (CDI):
• If you feel that an insurance agent, broker, or company has
treated you unfairly.
• If you have questions or concerns about health insurance.
• If you want to order CDI brochures.
• If you want to le a request for assistance against your
agent, broker, or insurance company.
• If you are having difculty opening a claim with your
insurance company.
•
To check the license of an agent, broker, or insurance
company.
Call:
Consumer Hotline 1-800-927-4357
TDD 1-800-482-4833
Visit us on the Web at:
www.insurance.ca.gov
Write:
California Department of Insurance
300 South Spring St., South Tower, Los Angeles, CA 90013
Visit us in person:
300 South Spring St., South Tower, 9
th
Floor, Los Angeles, CA 90013
8:00 AM to 5:00 PM, Monday to Friday, except holidays
19
NOTES:
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The California Department of Insurance
Consumer Education and Outreach Bureau
300 South Spring Street, South Tower, Los Angeles, CA 90013
1-800-927-4357
1-800-482-4833 (TDD)
1-877-401-9550 (CEOB)
www.insurance.ca.gov
This brochure is a project of the sta of the California Department of Insurance.
Form 130 / So You Had an Accident What’s Next ?
October 2015 – Flexible Printing