How does car insurance work?

Question

If i get into an accident and it is not my fault...do i have to report it to my insuance company if it is greater than 500. Also will his insuarnce pay for everything or do I have to pay a deductible. Does the other driver pay a deductible since his car has no damage? Help a little confused?

Answer 1

Check your policy you may. If you have physical damage coverage (Comprehensive/Collision) this will be of a concern to them because it could alter the acutal cash value of the vehicle insured which is the maximum amount that the company will pay in a covered incident.

This depends on the state you live in, if you are in a no-fault state like MI, then no your insurance will pay, and you will need to get reimbursed for your deductible from the at-fault party up to $500. IF you are in a "tort" state, the at-fault parties insurance, assuming he has any, will pay up to his coverage limit (property damage limit) for your vehicle and no there is not a deductible. It does not matter if there is damage to his vehicle or not.

Answer 2

This depends on your where you live, as not every jurisdiction has the same rules, and what your policy states. In some places, you must place the claim with the insurer of the other party (or parties) and seek restitution with them. In some states/provinces/territories/etc., each party is to seek compensation with their own insurer, and the insurers will seek restitution from the insurer of the at-fault party afterward. This may be especially true for injuries sustained in a jurisdiction where "no-fault" rules apply, however let's focus on damage to the vehicle with no injuries. I would recommend reporting all accidents to your insurer (unless you have been instructed not to by your broker/agent), as they have more clout and deeper pockets when it comes to defending your position that you are not at-fault with the other insurer. Plus many insurers will pay for your damage and then go after the other insurer for compensation if it is a very obvious case where you were not at-fault (i.e. they hit you while you were legally parked). your best bet is to speak with your broker/agent and confirm the required procedures for your area and/or insurer, and then ask them for advice on the best course to take. That's what they're there for after all!
As for the question of the deductible, this depends under what coverage your damages are paid under. In order for an insurer to pay for damage to your vehicle for which you are at-fault for, you need to have Collision coverage. All damage that is paid out under this coverage is subject to a deductible. So if you were found 100% at-fault for this accident, and you have Collision coverage, the damages to your vehicle would be covered minus the deducitble, which can arrange from $250 (rarely that low these days) and up (the highest I have ever encountered was $5000). If you were found 50% at-fault, half of your damages would be paid under collision, and that half would be subject to a deductible, and the other half would be covered by whatever method is applicable in your area (either from the other insurer or your own), and this portion would not be subject to a deductible. If you were 0% at-fault, you would pay no deductible. The same works for the other party. This is assuming, of course, that the other driver was identified and adequately insured, or else this would add complicating factors.

Answer 3

You do not have to report it to your insurance company. His insurance will pay for your damages--no deductible for you. The other driver does not pay a deductible for damages to your car. Deductibles are assessed against claims you file with your own insurance company. Since he has no damage to his vehicle, he will not be filing a claim for his car, thus no deductible.

Caution: get an accident report detailing the accident or, minimally, document and get witnesses signatures as to what happened (and the other drivers signature if you can get it) so that later the other driver doesn't recant and then say it was your fault after he has talked to his insurance company--Insurance company motto: NEVER admit responsibility.