An insurance claim is a formal request by a policyholder to their insurance provider for coverage or compensation following a covered loss. Once a claim is filed, the insurance company evaluates it for validation.
If approved, the carrier issues payment to the insured, or to an approved party on their behalf, to indemnify them against financial loss. Essentially, these claims fulfill the insurance contract that the individual maintains through their premium payments.
Your Policy and Coverage Limits
While insurance policies are often complex, it is vital to ensure you are adequately covered. In many cases, state-minimum-coverage limits are insufficient to protect a motorist’s assets. Unless your income and assets are minimal, we recommend carrying at least $100,000 per person and $300,000 per accident for bodily injury.
For property damage liability, which covers the repair or replacement of other people’s vehicles, we suggest at least $35,000 in coverage. This is particularly important given that the average cost of a new car now exceeds the standard $15,000 state minimum.
Key Definitions and Essential Coverage
- Collision: This pays to repair or replace your vehicle after an accident. If you have a loan or lease, this coverage is typically required and involves a deductible.
- Liability: This covers the repair or replacement of the other party’s vehicle if you are at fault. This coverage is required by law and does not involve a deductible.
- Comprehensive: This covers theft of the vehicle or its contents, as well as damage from fire, water, or other perils. Lenders generally require this for financed vehicles.
- Uninsured/Underinsured Motorist: This is crucial coverage that pays for medical costs if you are struck by a hit-and-run driver or someone with inadequate insurance. It also extends to household members as pedestrians.
- Rental Insurance: For a minimal annual cost, this ensures you have transportation to get from point A to point B while your vehicle is in the collision center.
Additional Recommendations
To manage costs, families with teenage drivers should consider naming them as occasional drivers on the least expensive vehicle in the household and ensuring they primarily use that car.
KNOW YOUR RIGHTS
You have the absolute right to choose which shop will repair your vehicle. Additionally, you are entitled to a prompt and good-faith settlement offer based on the specific terms of your policy. You also maintain the right to negotiate directly with the insurance company and its adjuster, as well as the right to use any arbitration procedures outlined in your policy.
Furthermore, if a customer feels they have been a victim of unfair acts or that an agent has deceived them, they have the right to contact the Oklahoma Department of Insurance to report the violation.
TOTAL LOSS
A vehicle is generally considered a total loss when the cost of repairs exceeds the vehicle’s actual cash value or if the car cannot be safely repaired at all. Customers need to understand that insurance companies do not simply compare the repair estimate to the car’s value.
Instead, they often declare a vehicle totaled when the combined cost of repairs, the “salvage value,” and rental vehicle expenses meet or exceed the vehicle’s total value. In these cases, the insurer will typically reimburse the “actual cash value,” which represents what the car was worth immediately before the damage.
Important Total Loss Information
- Determination of Loss: Insurance adjusters, not the collision center, determine whether a vehicle is a total loss. We do not have control over the final valuation or the amount paid toward a repair.
- Coverage Types: Total loss claims can be covered under comprehensive, collision, or property damage liability insurance, depending on the specific circumstances of the accident.
- Leased or Financed Vehicles: If a totaled car has an outstanding loan or lease, the insurer will reimburse the lender or leaseholder first. The owner remains responsible for any remaining balance owed to pay off the loan. We strongly recommend that all customers carry Gap Insurance to cover this potential financial discrepancy.
- Retaining the Vehicle: While customers may have the option to keep a totaled vehicle, it is often not financially or practically viable. We encourage clients to speak with a repair specialist to understand how their specific carrier handles these claims and whether “buying back” the vehicle is a sound decision.