How Car Insurance Claims Work After an Accident: A Step-by-Step Guide

Getting into a car accident is stressful enough without having to navigate the confusing world of insurance claims. Whether you were rear-ended at a stoplight or involved in a multi-vehicle collision, understanding how car insurance claims work can mean the difference between a fair settlement and being shortchanged by thousands of dollars. This guide walks you through the entire claims process, explains the tactics insurance companies use to minimize payouts, and helps you decide when it makes sense to handle a claim on your own versus when you need a car accident lawyer in your corner.

What Are the Two Types of Car Insurance Claims?

After a car accident, you generally have two options for filing an insurance claim: a first-party claim or a third-party claim. The path you choose depends on who caused the accident and what type of coverage you carry.

First-Party Claims (Filing With Your Own Insurer)

A first-party claim is filed with your own insurance company under your own policy. You would file a first-party claim when:

• The accident was your fault and you have collision coverage
• You live in a no-fault insurance state and are seeking Personal Injury Protection (PIP) benefits
• The at-fault driver is uninsured or underinsured
• You want faster processing, since your own insurer has a contractual obligation to handle your claim promptly

With a first-party claim, your insurer pays for repairs or medical bills under the terms of your policy, minus your deductible. Your insurer may then pursue subrogation — seeking reimbursement from the at-fault driver’s insurance company — and if successful, you may get your deductible back.

Third-Party Claims (Filing Against the At-Fault Driver’s Insurer)

A third-party claim is filed against the other driver’s liability insurance when they caused the accident. This is the more common route for recovering full compensation because liability claims can include:

• Vehicle repair or replacement costs
• Medical expenses (past and future)
• Lost wages and diminished earning capacity
• Pain and suffering
• Loss of enjoyment of life

The key difference is that liability coverage has no deductible for the claimant, and it covers non-economic damages like pain and suffering — something your own collision or PIP coverage typically does not.

How Does the Car Insurance Claim Process Work Step by Step?

While every claim has its own nuances, the general process follows a predictable sequence. Knowing what to expect at each stage helps you avoid costly mistakes.

Step 1: Report the Accident

Call 911 if anyone is injured. Even in minor accidents, a police report creates an official record of what happened, who was involved, and any citations issued. Many insurance companies require a police report before processing a claim, and it becomes critical evidence if liability is disputed later.

Step 2: Document Everything at the Scene

If you are physically able, gather as much evidence as possible:

• Photographs of vehicle damage, the accident scene, road conditions, traffic signals, and any visible injuries
• Contact and insurance information for all drivers involved
• Names and contact information for witnesses
• Notes about weather, time of day, and road conditions

This documentation becomes your strongest evidence when the insurance company evaluates your claim.

Step 3: Notify Your Insurance Company

Most insurance policies require you to report an accident within a reasonable time — often within 24 to 72 hours. Even if you plan to file a third-party claim against the other driver’s insurer, notifying your own company protects your coverage rights. Failing to report promptly can give your insurer grounds to deny coverage.

Step 4: The Insurance Company Assigns an Adjuster

Once a claim is filed, the insurance company assigns a claims adjuster to investigate the accident, assess damages, and determine how much to pay. This is where the process becomes adversarial, especially with third-party claims, because the adjuster works for the insurance company — not for you.

Step 5: Investigation and Evaluation

The adjuster will review the police report, examine vehicle damage, request your medical records, and may take a recorded statement. They use this information to determine liability and calculate the value of your claim.

Step 6: Settlement Offer

After completing their investigation, the insurance company makes a settlement offer. You can accept, reject, or negotiate. Once you sign a release and accept payment, you waive your right to pursue any further compensation for that accident — so it is critical to understand the full value of your claim before settling.

What Do Insurance Adjusters Look For?

Understanding an adjuster’s evaluation process gives you a significant advantage in negotiations. Adjusters assess several key factors:

Liability determination. The adjuster determines who was at fault based on police reports, witness statements, physical evidence, and applicable traffic laws. In states that follow comparative negligence rules, your compensation can be reduced by your percentage of fault. Most states have adopted comparative fault under the Restatement (Third) of Torts: Apportionment of Liability §7. For example, if you are found 20% at fault in a state following modified comparative negligence, your recovery would be reduced by 20%.

Medical documentation. Adjusters scrutinize your medical records to verify that your injuries are consistent with the accident. Gaps in treatment — even a few weeks between the accident and your first doctor visit — are used to argue that your injuries are not serious or were caused by something else.

Pre-existing conditions. While insurance companies cannot deny your claim simply because you had a pre-existing condition, they will try to attribute your current symptoms to that prior condition rather than the accident. Under the eggshell plaintiff doctrine, a defendant takes the plaintiff as they find them — meaning a pre-existing condition that was aggravated by the accident is still compensable.

Damage calculation. Adjusters use software programs like Colossus or Claims Outcome Advisor to calculate claim values based on injury codes, treatment types, and duration. These programs are designed to produce lower settlement figures. Understanding that your claim is being run through an algorithm — not evaluated by a human exercising independent judgment — is important context for negotiations.

What Tactics Do Insurance Companies Use to Reduce Your Payout?

Insurance companies are publicly traded corporations with a financial incentive to pay as little as possible on every claim. Here are the most common tactics they use — and how to protect yourself.

Requesting a Recorded Statement

Shortly after you file a claim, an adjuster may call and ask for a recorded statement. While you are generally required to cooperate with your own insurer under the terms of your policy, you are under no obligation to give a recorded statement to the other driver’s insurance company. Anything you say can be taken out of context and used to minimize or deny your claim. Phrases like “I’m feeling fine” or “I didn’t see them coming” can be devastating to your case.

Lowball Initial Offers

The first settlement offer is almost always far below the true value of your claim. Insurance companies count on claimants being overwhelmed, financially stressed, or simply unaware of what their claim is worth. A quick offer before you have finished medical treatment is a red flag — the insurer is trying to close your claim before the full extent of your injuries is known.

Delay Tactics

Dragging out the claims process is a deliberate strategy. Adjusters may take weeks to return calls, repeatedly request the same documents, or transfer your file between adjusters. The goal is to wear you down until you accept a lower offer out of frustration or financial necessity. In many states, insurance companies are legally required to handle claims within specific timeframes under the Unfair Claims Settlement Practices Act (NAIC Model Act §900), and unreasonable delays may constitute bad faith — an actionable legal claim that can result in additional damages beyond your original claim.

Disputing Medical Treatment

Adjusters frequently argue that your medical treatment was excessive, unnecessary, or unrelated to the accident. They may claim that physical therapy sessions beyond a certain number were not needed, or that diagnostic imaging was unwarranted. Having thorough documentation from your treating physicians explaining why each course of treatment was medically necessary is essential.

Surveillance and Social Media Monitoring

Insurance companies routinely monitor claimants’ social media accounts and may even hire investigators to conduct physical surveillance. A photograph of you carrying groceries, playing with your children, or attending a social event can be used to argue that your injuries are not as severe as claimed — regardless of context. If you have a pending claim, assume that anything you post online or do in public may be used against you.

How Does Uninsured and Underinsured Motorist Coverage Work?

According to the Insurance Research Council, roughly 14% of drivers nationwide are uninsured (Insurance Research Council, Uninsured Motorists, 2022). If you are hit by a driver who carries no insurance or whose policy limits are too low to cover your damages, you may need to rely on your own uninsured/underinsured motorist (UM/UIM) coverage.

UM/UIM coverage is required in some states and optional in others. It steps in to cover medical bills, lost wages, and pain and suffering when the at-fault driver cannot. This coverage can also apply in hit-and-run accidents where the other driver is never identified.

Filing a UM/UIM claim is technically a first-party claim — you are making a claim against your own policy. However, because your insurer is now paying out of its own pocket rather than subrogating against another carrier, these claims often become contentious. Your own insurance company may use the same adversarial tactics described above. If your UM/UIM claim is being undervalued or denied, speaking with an uninsured motorist lawyer can help you understand your rights and options.

When Should You Accept a Settlement vs. Hire a Lawyer?

Not every car accident claim requires an attorney. If you were in a minor fender-bender with no injuries and the insurance company is offering a fair amount for vehicle repairs, you can likely handle the claim yourself.

However, there are clear situations where hiring a personal injury attorney is strongly advisable:

• You suffered significant injuries — broken bones, herniated discs, traumatic brain injury, or any injury requiring surgery or extended treatment
• Liability is disputed — the other driver or their insurer claims you were partially or fully at fault
• The insurance company is acting in bad faith — unreasonable delays, denying a valid claim, or refusing to investigate. Learn more about your options with an insurance bad faith lawyer
• You are being pressured to settle quickly — especially before you have reached maximum medical improvement (MMI)
• Multiple parties are involved — accidents involving multiple vehicles, commercial trucks, or government entities add layers of complexity
• The settlement offer does not cover your actual losses — if you are unsure whether an offer is fair, a case value assessment can clarify what your claim is truly worth

Research consistently shows that claimants who are represented by an attorney receive higher net settlements — even after attorney fees — than those who handle claims on their own. This is because attorneys understand how to document damages, counter adjuster tactics, and leverage the threat of litigation to obtain fair offers.

How Can a Personal Injury Attorney Help With Insurance Disputes?

When you hire a car accident attorney, you gain an advocate whose sole purpose is maximizing your recovery. Here is what that looks like in practice:

Handling all communication with insurers. Once you have legal representation, the insurance company must communicate through your attorney. This eliminates the risk of making statements that damage your claim and removes the emotional burden of dealing with adjusters.

Investigating and building your case. An attorney can obtain the full police report, subpoena surveillance footage, hire accident reconstruction experts, and work with medical professionals to document the full extent of your injuries and their impact on your life.

Calculating the true value of your claim. Attorneys evaluate both economic damages (medical bills, lost wages, future care costs) and non-economic damages (pain and suffering, emotional distress, loss of consortium). They understand how factors like the severity of your injuries, the jurisdiction, and the defendant’s conduct affect case value.

Negotiating from a position of strength. Insurance companies know which attorneys are willing to take cases to trial. When an adjuster knows that rejecting a reasonable settlement demand means facing a jury, the dynamics of the negotiation change significantly.

Filing a lawsuit if necessary. If the insurance company refuses to offer fair compensation, your attorney can file a personal injury lawsuit before the statute of limitations expires. In many states, simply filing the lawsuit prompts a more serious settlement offer. The statute of limitations varies by state — in New Hampshire, for example, you generally have three years from the date of the accident to file a personal injury lawsuit.

Most personal injury attorneys, including the team at Maxx Compensation, work on a contingency fee basis, meaning you pay nothing upfront and no attorney fees unless you recover compensation. This ensures your lawyer’s financial interests are aligned with yours.

Frequently Asked Questions About Car Insurance Claims

How long does a car insurance claim take to settle?

Simple property damage claims may settle within a few weeks. Injury claims take longer because it is important to wait until you have completed medical treatment — or reached maximum medical improvement — before settling. Most car accident injury claims settle within three to twelve months, though complex cases involving severe injuries or disputed liability can take longer.

Should I accept the first settlement offer from the insurance company?

In most injury cases, no. The initial offer is typically a starting point for negotiations, not a reflection of your claim’s full value. Before accepting any offer, make sure you understand the total cost of your medical treatment (including future care), your lost income, and the impact of your injuries on your daily life.

What if the other driver’s insurance denies my claim?

A denial is not the end of the road. You can appeal the decision, file a complaint with your state’s department of insurance, or file a lawsuit against the at-fault driver directly. An attorney can review the denial, identify the insurer’s stated basis, and determine the best path forward.

Do I have to pay my health insurance back if I get a car accident settlement?

Possibly. If your health insurer paid for accident-related treatment, they may have a right of subrogation — the legal right to be reimbursed from your settlement. The specifics depend on your state’s laws and the terms of your health insurance plan. ERISA-governed employer health plans have particularly strong subrogation rights under the Employee Retirement Income Security Act, 29 U.S.C. §1132(a)(3). An attorney can often negotiate these liens down, increasing the net amount you keep.

What happens if I am partially at fault for the accident?

This depends on your state’s negligence laws. Most states follow some form of comparative negligence, which reduces your recovery by your percentage of fault. Some states (like Alabama, Maryland, North Carolina, Virginia, and the District of Columbia) follow contributory negligence, which can bar recovery entirely if you are even 1% at fault. Other states use a modified comparative negligence threshold — in many, you cannot recover if you are 50% or more at fault. An attorney can evaluate how your state’s laws apply to the specific facts of your accident.

Can the insurance company access my medical records?

When you file an injury claim, the insurance company will ask you to sign a medical authorization. Be cautious about signing broad authorizations that give the insurer unlimited access to your entire medical history. They may use unrelated pre-existing conditions to devalue your claim. Your attorney can provide a limited authorization that covers only the treatment relevant to your accident injuries.

What is the difference between bodily injury liability and PIP coverage?

Bodily injury liability coverage pays for injuries you cause to others in an accident. Personal Injury Protection (PIP) covers your own medical expenses and sometimes lost wages, regardless of who was at fault. PIP is mandatory in no-fault states like Florida, Michigan, New York, and others. In at-fault states, you rely on the other driver’s bodily injury liability coverage to compensate you for injuries they caused.

How much does it cost to hire a car accident lawyer?

Most car accident lawyers work on contingency, meaning there is no upfront cost. The attorney’s fee is a percentage of the settlement or verdict — typically between 33% and 40%, depending on whether the case settles before or after litigation is filed. If there is no recovery, you owe no attorney fees.

Get Help With Your Car Insurance Claim

If you have been injured in a car accident and are dealing with an insurance company that is delaying your claim, disputing your injuries, or offering far less than your case is worth, you do not have to fight alone. Attorney Charles C. Teale and the team at Maxx Compensation have helped accident victims across the country recover the compensation they deserve.

Call 877-462-9952 today for a free, no-obligation case evaluation. There are no upfront costs, and you pay nothing unless we win your case.

Written by Charles C. Teale, Personal Injury Attorney