What happens after you file a collision claim

After you report a collision to your insurance company, an adjuster will contact you within a few days to begin the settlement process. The adjuster's job is to investigate the accident, determine who was at fault, and calculate what the insurance company will pay. You will need to provide a police report number (if one exists), photos of the damage, and details about what happened. The insurance company will also obtain repair estimates and may inspect your vehicle themselves.

The settlement offer comes after this investigation is complete. The insurer will send you a written offer that includes the estimated repair cost, any deductible you owe, and the total amount they will pay. If you agree, you sign a release form and the money is sent to you or directly to the repair shop. If you disagree with the offer, you have options to challenge it — but you must act within the timeframe stated in the settlement letter, which is usually 30 to 60 days.

Key Takeaways

  • The insurance adjuster investigates the accident and estimates repair costs, which typically takes one to three weeks from the time you file your claim.
  • The settlement offer includes the repair estimate minus your deductible, and you must respond within the important date stated in the letter or the offer may expire.
  • If you disagree with the repair estimate, you can obtain your own estimate from a repair shop and submit it as evidence to the insurance company.
  • Accepting the settlement means signing a release form that prevents you from suing the insurance company later for the same accident.
  • If the insurance company denies your claim entirely, you have the right to file a complaint with your state's insurance commissioner.

How the insurance company calculates the settlement amount

The adjuster uses the repair estimate as the foundation of the settlement. They will obtain estimates from repair shops — sometimes one, sometimes multiple — to determine the cost of fixing your vehicle. The estimate includes parts, labor, and any additional damage discovered during the repair process. The insurance company will pay the lower of the repair estimate or your vehicle's actual cash value (what it was worth before the accident). This prevents the insurer from paying more to fix a car than the car itself is worth.

Your deductible is subtracted from the settlement amount. If your deductible is $500 and the repair estimate is $3,200, the insurance company will pay $2,700. You are responsible for paying the $500 deductible to the repair shop when you drop off your vehicle. Some repair shops will waive the deductible if you use their preferred insurer's network, but this varies by shop and by policy.

Disputing the settlement offer if you think it is too low

If the repair estimate seems too low, obtain your own estimate from a different repair shop. Many shops will provide a written estimate at no cost. Submit this estimate to your insurance adjuster along with a written explanation of why you believe their estimate is inaccurate. Common reasons include missing damage that was not visible until the vehicle was partially disassembled, or the use of aftermarket parts instead of original manufacturer parts.

The insurance company may accept your estimate, ask for more information, or stand by their original offer. If they stand firm, you can request that an independent appraiser review both estimates. Some states require insurers to cover the cost of this appraisal if you request it. The appraiser's decision is usually binding on both you and the insurance company, though the process can add two to four weeks to your settlement timeline.

What happens if the insurance company denies your claim

An insurance company may deny your claim if they determine that the accident was not covered under your policy, that you were at fault and you do not have collision coverage, or that the damage was pre-existing. They must provide a written explanation of the denial that cites the specific policy language or reason. Read this letter carefully, because it will tell you whether you have grounds to challenge the decision.

If you believe the denial is incorrect, send a written response to the insurance company within 30 days explaining why you disagree. Include any new evidence — photos, witness statements, or a police report — that supports your position. If the company maintains the denial, you can file a complaint with your state's insurance commissioner's office. This office investigates complaints at no cost to you and can pressure the insurance company to reconsider or overturn the denial.

Understanding the release form and what you give up

When you accept a settlement offer and cash the check, you will be asked to sign a release form. This document states that you are accepting the settlement amount as full payment for the accident and that you will not sue the insurance company for additional damages related to this accident. Once you sign and cash the check, you cannot go back and ask for more money if repair costs turn out to be higher than expected or if you discover additional damage later.

Do not sign the release until you are certain the repair estimate is accurate and complete. If the repair shop discovers additional damage during the repair process, you can ask the insurance company to increase the settlement before you sign. Many insurers will approve additional payments for damage that was not visible in the initial estimate, but only if you request it before signing the release.

Timeline and payment methods for your settlement

From the time you file your claim to receiving a settlement offer typically takes one to three weeks. The insurance company may pay you directly by check or electronic transfer, or they may pay the repair shop directly if you authorize them to do so. Paying the shop directly is common because it ensures the money goes toward fixing your vehicle rather than being used for other expenses.

If you choose to receive the payment yourself, you will get a check made out to you and the repair shop (a two-party check). You and the shop must both endorse it before it can be deposited. Some shops will not accept two-party checks, so confirm this with your chosen repair shop before the settlement is finalized. If the insurance company pays the shop directly, you will still owe your deductible to the shop when you drop off your vehicle.

What to do if your vehicle is declared a total loss

If the repair cost exceeds 70 to 80 percent of your vehicle's actual cash value (the threshold varies by state and insurer), the insurance company will declare your vehicle a total loss. They will offer you the actual cash value minus your deductible. This is typically less than the repair estimate because the insurer is paying you for the vehicle itself, not for repairs.

If you disagree with the actual cash value, you can challenge it using the same process as disputing a repair estimate — obtain an independent valuation and submit it to the insurance company. Once you accept the total loss settlement, you must surrender the vehicle to the insurance company or arrange to have the title transferred to them. Some insurers will allow you to keep the vehicle if you accept a reduced payout, but this is negotiable and not standard.

Frequently Asked Questions

How long do I have to accept or reject a settlement offer?

The important date is stated in the settlement letter the insurance company sends you, typically 30 to 60 days from the date of the letter. If you do not respond by that date, the offer may expire and you will need to request a new one. Contact your adjuster when ready if you need more time to obtain a second estimate or gather additional information.

Can I choose any repair shop, or does the insurance company get to pick?

You have the right to choose your own repair shop in most states. The insurance company cannot force you to use their preferred network, though they may offer a discount if you do. Get the repair estimate from your chosen shop and submit it to the insurance company for approval before dropping off your vehicle.

What if the repair shop finds more damage after they start work?

Contact your insurance adjuster when ready with photos and a written explanation from the repair shop. The insurance company will usually approve additional payment for damage that was not visible in the initial estimate. Do not authorize the repair shop to proceed with additional work without first getting written approval from the insurance company.

Do I have to use the insurance company's repair estimate, or can I use my own?

You can use your own estimate. If it differs significantly from the insurance company's estimate, submit it to your adjuster with an explanation of the discrepancy. The insurance company may accept it, request more information, or offer a compromise amount between the two estimates.

What happens if I sign the release and then discover the repairs cost more than the settlement?

Once you sign the release and cash the check, you cannot ask the insurance company for additional money for the same accident. This is why it is important to confirm with the repair shop that the estimate is complete and accurate before signing. If the shop discovers additional damage during repairs, request a supplemental settlement from the insurance company before you sign the release.