Collision coverage can be activated by action of the insured or by the action of someone else who has no insurance or who disputes responsibility for damages. Once the claim has been submitted and accepted, the insured is normally required to get at least one reputable estimate for repairs, pay the appropriate deductible, and make the vehicle available for repairs. An adjuster normally works directly with the repair shop to make sure the work is done properly and expeditiously. If there are to be adjustments for hidden or unforeseen damages, the adjuster deals with it so the insured does not have to negotiate what should or shouldn’t be paid for. Once damages are repaired, the vehicle is placed back in service and all coverages are restored preparatory for the next claim.

If the claim is submitted due to a one car accident, i.e. the insured running off road due to icy conditions of road and hitting a tree with no other parties involved, the insured has to deal only with his/her own insurance company. Once coverages are confirmed and the claim is legitimate, the above procedure is followed and the insured is recompensed for loss.

If two or more parties are involved, other protocol is followed. At the very beginning of a claim, most insurance companies will not just automatically accept responsibility for the actions of their client or act upon a claimant’s request for payment. Many times a hold harmless agreement will used by the insurance company as they investigate the claim while accepting no liability for it. This does not have to take a great deal of time, but it is an important step in determining liability. Most cases are easily discerned as to degree of negligence and once these determinations are made, proper handling of the claim can proceed. Where this is not so easily discerned, an insured may not want to deal with another company; so they just turn the claim over to their company, pay their deductible, get repairs done, and move on. Without collision coverage in force, however, the client does not have the recourse of just letting his or her company handle the claim.

In an effort to streamline the claims process, some states have established a no fault provision in which each insurance company attends to its own client then determines if the claim can or should be made against some other party. Sometimes this no fault provision only pertains to medical expenses, leaving material damage expenses to be paid by negligent party.

It is worth notings, collision and comprehensive coverage insurance is intended to put you back in the same financial position you were in at the time of the loss. If  the vehicle was relatively new, you may not have much expense over and above your deductible. However, if you are top heavy in your financial contract and the vehicle has to be totaled, you may end up having to pay on a dead horse. Here is an extreme actual account exemplifying this possibility.

A young man with the co-signing of his father had financed a newly purchased vehicle which he paid a minimum amount down. He owed more than the vehicle was worth right as he drove it off the showroom floor. When he insured it, he purchased the lowest limits of liability and the highest deductible he could for comprehensive and collision coverages.

A few months into the contract the young man while partying ran off the road doing considerable damage to body of vehicle, but it was still drivable. He was afraid of what his father would say so he panicked and made the following choice. He drove the car to the back of their farm and using his dad’s backhoe dug a deep hole into which he drove the car and covered it up, tamping the soil down as best he could so it would be inconspicuous.

The next morning he told his dad someone had stolen his car while he was at the party. They then came into the insurance office to submit a claim for a stolen vehicle. The adjuster took a written statement from the young man and advised him that on stolen vehicle claims the insurance company would wait at least 30 days before processing the claim. When the adjuster advised the young man that he would need to go to the police to file a stolen vehicle report, the old seasoned adjuster saw something in the young man’s demeanor which made him begin to question what had happened. He advised the young man to get the police report, bring it back to him, and then he would get a recorded statement from the young man to place in the file. He advised the young man he would need to interview some of his buddies who were at the party to see if he could pick up on any leads as to who may have stolen the vehicle.

Several days passed and the young man called wanting to know if he could come in with his father to discuss the claim. A meeting was arranged and they came in. The young man’s conscience finally got to him and wanting to get things right he told his dad what had actually happened.

Upon hearing the story the adjuster was placed in a dilemma. What would have been a legitimate claim now became a fraudulent claim which could lead to charges against the young man with jail time a real possibility. He advised the young man the company would pay for the damages caused when he ran off the road, but the damages done to the car when the young man buried it would not be covered. Since the young man had confessed and expressed a great deal of remorse, the company would not press charges against him for filing a fraudulent claim but would cancel his insurance. The unfortunate side of the story is that damages from the wreck and damages incurred while being buried far exceeded the value of vehicle. With the lien still in place, the young man had to continue payments without any benefits. It was sad seeing the young man driving around town in an old junker car he purchased to get him back and forth to work. Could have been a whole lot worse!

Comprehensive coverage is a catch all provision for material damage which doesn’t fall under collision coverage. It runs the spectrum of fire in vehicle to flood loss to broken windows to paint pitted by sandstorm to running into animals to falling objects. There was even a claim paid under comprehensive when a mother broke out the car window  after she left her child in the car while she momentarily stepped out of the car to see if the huckleberries were ripe for picking. The little one had climbed over the seat hitting the lock button and began playing with the gear shift. No amount of coaxing on the part of the mother could get the child to unlock the door. Since the car was running, the mother felt she had no choice but to break the side window to get access to the interior of the car. Other than a frightened mom and a broken side window, the story had a happy ending.

These two coverages are voluntary on the part of the insured but are required by a lienholder who has a financial interest in vehicle. When a claim is made and repairs can be done, the reimbursement check is made out to the repair shop and client. It is normally sent to body shop which then upon completion of the work and the customer’s satisfaction is presented to the client for signature so the repair shop can cash it and get paid for material and labor provided.

If the car is to be totaled, the check is made out to the lienholder and the insured who then determine who gets what. When the car is totaled it becomes the property of the insured company and they can dispose of it as they see fit.