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My car got wrecked in an accident, what do I do now?

So you’ve just been in a car accident and are overwhelmed and confused by the process of getting your life back together again. You are left with a damaged vehicle and no idea of how to proceed. You don’t know whether or not to report the accident to insurance or even if or where you should get your car fixed. What happens to your car after a car accident depends on multiple factors, including the route you chose to take and how you hold title to your car. You will want to consider each option carefully as there will be pros and cons to each decision.

Let’s explore the options together, starting with the first question…


Do I report the car accident to insurance?

The answer to this question is like most… it depends on a few things, including whether or not you own your car outright, have a loan on the vehicle, or have comprehensive or collision coverage that you would like to continue.

What do I do with the car if I have a loan on the vehicle?

If you have a loan on the vehicle, you will want to report the car accident to insurance because, if you have a loan on your vehicle then you technically share ownership of the vehicle with your loan provider, meaning, you do not own the car free and clear. Since your car is collateral for the lender, they will want the car to be fixed of any damages. The lenders would likely prefer that the damage is not only fixed in a timely manner, but also that it is fixed by one of the insurance company’s preferred repair shops. The positive to having your car repaired by one of the insurance company’s preferred repair shops is that you will not have to convince the insurance company of the repair shops quality of work, which can be a hassle at times.

Do I have to fix the car or report the accident to insurance If I own the car outright?

If you own your vehicle outright, then you have more flexibility when it comes to deciding how to handle damage to your vehicle. Many drivers chose to not report claims to their insurance companies. The most obvious reason for this is to avoid a rise in premiums if the accident was partially or fully your fault.

If you find the vehicle damage to be minor and merely cosmetic in nature then you may decide that you do not want to deal with the potential hassle of going through the insurance companies. You might be deterred from the thought process of getting your car repaired or you may even not want to be without a car temporarily. Either way, if you for whatever reason decide that the damage is not worth your time, you may walk away from the accident scene and choose to not report the accident to the insurance company. (Keep in mind this assumes that there was no damage to another vehicle. If another vehicle is involved and you are required to file a claim, then you should file a claim for your vehicle as well.)

If, however, you have been in a major (or at least more than minor) car accident, then chances are you will likely want to fix the damage to your car and you will want the insurance company to pay.

If you want insurance to cover the damage then you will need to file a claim with your insurance company. After you file your claim, your insurance company will contact you within a reasonable amount of time (usually up to 15 days) to get a written or recorded statement for their investigation. The insurance company may also contact other drivers and witnesses involved as part of its investigation.

Do I have to fix the car if I have physical damage coverage that I want to continue?

If you have collision coverage or comprehensive coverage (physical damage coverage) that you would like to continue after the vehicle accident, then the insurance company will, understandably, require you to fix the vehicle. The reason for this is that the insurance company is not going to want to continue insuring a damaged vehicle that is not fixed.

How does insurance evaluate the vehicle damage?

The insurance company will usually have a qualified adjuster or appraiser conduct an initial inspection of the vehicle damage and provide an estimate based on the findings. Remember that this is the initial estimate and that additional damage may be found during the repair process. If this happens, the repair shop will reach out to the insurance company to get approval for the additional repairs. At that point the insurance company will either ask that you submit competitive repair estimates or they may send out another adjuster to evaluate the new found damage.

Additionally, your insurance company may give you the option of picking your own repair shop. Some people prefer to go with a trusted repair shop that they’ve used in the past, or even repair shops that have come highly recommended. If your insurance company give you this option, you are free to use it, however, keep in mind that they may require multiple appraisals, making it slightly more difficult to go with your own repair shop. Ultimately, you may decide that going with one of the insurance company’s approved repair shops is the path of least resistance. Regardless of the path you take, you will still be entitled to have your vehicle repaired or receive compensation for its value.

Generally speaking, the insurance company will pay the lesser of either (1) the amount needed to fix the vehicle or (2) the actual cash value (ACV) of the car. The ACV value of the vehicle is usually the fair market value of the item, unless otherwise defined in the insurance policy. This can get tricky because most insurance policies don’t include coverage for enhanced aftermarket equipment. You can read more about that in your insurance policy’s exclusions and limitations.

In the event there is a dispute regarding the amount being offered by the insurance company on a total loss settlement of your vehicle, most standard policies will allow you to demand an appraisal. Each party will pay its own appraiser and the amount the appraisers agree on is binding. If the appraisers cannot agree, they will have a neutral umpire make the decision. Make sure to read the appraisal provision in your insurance policy for more information.

Once you are satisfied with either the repair estimate or ACV, you will authorize the insurance company and/or repair shop to move forward.

Remember, it will always be up to you to decide if you are satisfied with the final estimate and repair facility. Once you are comfortable with repair facility and the final estimate, you will have to sign and authorize the shop to begin repairs.

How do I get the money for vehicle repairs or ACV?

This depends on the insurance company. If you are getting the ACV of the vehicle, then you will receive a check from the insurance agency.

If you are getting your vehicle repaired, some insurance companies require that the check be sent directly to the repair shop in order to assure that the repairs get done. Other insurance companies will mail you the check in good faith with the expectation that you will use the money to pay for the necessary repairs.

If you do receive a check from the insurance company, then you may face another commonly asked question…

Do I have to use the insurance check for repairs or can I fix the car for less and pocket the difference?

The answer to this question like everything else depends on whether you own the car outright, have a lease, or loan on the vehicle. To read about your options regarding vehicle repairs, see our blog post titled “Can I pocket my car accident insurance check?”

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