February 17, 2016
Your car was just inundated in a flash flood, consumed in a fire, blown away by a tornado, or crushed by falling debris. After you make sure that all of your loved ones are okay and your house is intact, you turn your attention to your now-useless car. Does your policy cover natural disasters? If so, what should you do?
The obvious first step is to make sure your car is covered before a natural disaster strikes. For cases like this, you need comprehensive coverage, which is often sold in packages with collision coverage. “C&C” policies are truly comprehensive, since the collision component handles collision-based damages, and comprehensive covers accidents like natural disasters that are not the result of a collision.
Whether you have comprehensive coverage separately or as a package, check the exclusions in your policy and make sure that you understand the terms.
Comprehensive insurance is generally held with newer cars. However, people tend to drop C&C policies when cars age and the yearly premiums approach a certain percentage of the car’s value, often around 10-15%.
Without comprehensive coverage, you are generally on your own for natural disasters — although sometimes homeowner’s or renter’s policies will provide some coverage. If you live in a flood-prone area or an area with frequent tornadoes, for example, you may place a higher value on comprehensive coverage.
Assuming you do have comprehensive coverage when disaster strikes, what are your next steps?
- Document Evidence – The very first thing to do is to document the damage. Take photos from multiple angles, including the inside of the car as well as areas such as the engine compartment and the trunk.
If you can, optimize the lighting to make sure the damage is visible and obvious. If that requires taking photos the next morning, do so. The important point is not to clean it up or alter anything until you have obvious and clear photographic evidence of the damage.
- Contact Your Agent Immediately – It is important to file your claim quickly during natural disasters. You probably aren’t the only one with a totaled vehicle, and you could be stuck in a significant queue if you don’t contact your agent quickly — and the longer an evaluation takes, the longer it takes you to receive a check.
- Be Persistent – Insurance companies are often overwhelmed, so it is important to keep in regular touch about the status of your claim. You don’t have to be unpleasant, but you do have to be persistent.
- Research the Value – Knowing the true value of your totaled car can help you to judge whether your claim is fair. Research the value of your old car on sites such as Edmunds or Kelley Blue Book.
If you receive a settlement offer that is too low based on your search, do not hesitate to push back, but push back with your facts. Ask to speak to the claims office manager or to upper level managers if required.
As a last resort, you can file a complaint with your state insurance commissioner and/or seek an attorney. Keep the attorney’s fees in mind if you decide to go down that path.
Congratulations! You have received your check and are ready to replace your car. Do the same type of research on your new car that you did to get that replacement check.
While you’re at it, check out your insurance options for your new car, and don’t forget the comprehensive coverage. You now know just how valuable that is.