THE BOTTOMLINE>CAR INSURANCE

Buying a Car Insurance Policy

Protect yourself against loss due to road accidents and car theft. Here’s a primer on auto insurance

By Arlyn W. Cheng, LUTCF, CIS

Do you know that road accidents are now the fourth leading cause of death in the country? Based on the 2006 report of the Philippine National Police, an average of 41 traffic accidents occur in a day  due to driver errors, mechanical defects, over speeding, cell phone use while driving , driving under the influence of alcohol and drugs, etc. These traffic accidents resulted in 674 fatalities, 3,767 injuries and 10,623 property damages.  In recent years, there has been an alarming increase in the number of traffic accidents. For instance, the June 2008 data alone showed 1,648 incidents.

So what does it indicate to all of us? For car owners, we are all exposed to road hazards. No matter how careful you are in driving, if the driver behind you is undisciplined or sleepy, you could still be in trouble. An accidental collision involves property damage and possible bodily injuries. Worst, it could be fatal. A lawsuit can be financially and emotionally draining aside from time consumed in attending court hearings. Another possibility is car theft, which is rampant in our country. Hence car insurance coverage becomes a necessity to protect us against potential financial loss. Below is a guide in choosing the right coverage:

WHAT IS MOTOR CAR INSURANCE?

Motor car insurance is a contract whereby an insurer undertakes to indemnify the insured against loss, damage and/or liability that may result, due to an accident arising from the use of a motor vehicle in exchange for a premium.

WHAT ARE THE MOST IMPORTANT CONSIDERATIONS IN CHOOSING AN INSURANCE COMPANY?

Select a company that is financially sound since you buy insurance to protect you financially. You may view the ranking of authorized non-life insurance companies at the Web site of the Insurance Commission at www.insurance.gov.ph. Their ranking provides us a clue to their financial capability to settle claims promptly. Another basis is to look at their ratings from independent rating agencies.

Deal only with reputable providers who have a track record of attending fairly, efficiently, and as quickly as possible to their clientele. It is best to deal with licensed and ethical non-life insurance professionals as they are mostly affiliated to reputable firms and have been trained to give you proper advice on the right coverage to buy.

WHAT IS THE COVERAGE AVAILABLE IN A COMPREHENSIVE MOTOR CAR INSURANCE?

The typical policy has six components. Here’s a primer from Malayan Insurance:

1. COMPULSORY THIRD PARTY LIABILITY (CTPL) – The state (PD 612, Chapter VI) requires that before the registration and operation of any motor vehicle, it must be covered against liability for death and bodily injury of third parties. A Schedule of Indemnities for Bodily Injury &/or Death is contained in Sec I/II of a standard motor car policy.

1. OWN DAMAGE & THEFT (OD/Theft) – This protects against loss (theft) or accidental damage to the insured’s own vehicle.

1. VOLUNTARY THIRD PARTY LIABILITY – Excess Bodily Injury (VTPL-EBI) – This is the second layer to the CTPL coverage which provides additional insurance coverage (in excess of the P100,000 required by law). If you are found legally responsible for bills beyond the limits, you might find yourself in a situation where you have more out-of-pocket and in the long run, the cost could wipe you out. An example is when you run over a man who becomes permanently disabled.

1. VOLUNTARY THIRD PARTY LIABILITY – Property Damage (VTPL-PD) – This is additional coverage against liability due to the insured vehicle’s accidentally damaging a third party property. What if you had an accidental collision with luxury cars like BMW or Porsche, will your coverage be enough to cover the cost of damage?

1. EXTENDED PERILS COVER – For an additional premium, these perils may be added:

• Acts of God – flood, typhoon, hurricane, volcanic eruption, earthquake (FTHVEE)
• Strike, Riot, Civil Commotion (SRCC)

1. PERSONAL ACCIDENT – This covers against losses due to the accidental death or disablement and/or medical expenses of the vehicle occupants who are riding in the insured vehicle involved in an accident.

For an additional premium, you may opt for a Loss Of Use coverage (if offered by your provider) which provides transport allowance while your car is undergoing repair due to a motorcar claim.

WHAT IS THE SHARE OF THE INSURED IN THE EXPENSES FOR INCURRED LOSS/DAMAGE – THE SUBJECT OF SETTLEMENT OF A MOTORCAR CLAIM?

DEDUCTIBLE – Deductibles represent the amount of money you pay before your insurance policy kicks in.  The policy, be it a Private Vehicle (PV) Policy or Commercial Vehicle (CV) Policy,  provides that the insured must share in the loss/damage – the expenses of the repair/reinstatement of the vehicle, equal to 1% of the sum insured for CV, and 0.5% for PV; Minimum deductible amount is P3,000 for CV and P2,000 for PV. This must be paid by the insured before the vehicle is released from the repair shop or by the insurance company.

DEPRECIATION – Depreciation is a decline in value caused by the effects of age, wear and tear, use, weather, and other similar factors. When a motorcar part is used to replace a damaged part, the insured has to pay the difference (amount) between the value of the part at the time the car has been purchased and the value of the part at the time it is replaced.

WILL THE INSURANCE COMPANY PROVIDE LEGAL ASSISTANCE IF THE DRIVER OF THE INSURED VEHICLE IS SUED BY THE OTHER PARTY AS A RESULT OF A CAR ACCIDENT?

If you have comprehensive cover, it can shield you from legal liability to third party. Having car insurance does not stop anyone from suing you. But it does provide the assurance that if you are sued as a result of an auto accident, the financial and legal resources of the insurance company will assist you in defending against the suit and paying any resulting damages.

In summary, buying an adequate coverage will take away the worry and hassles when a road mishap occurs.  Just like a spare tire, we carry it just in case. Drive with confidence and peace of mind.  An insurance coverage can be a vital financial safety net!

PROFILE

Arlyn W. Cheng, LUTCF, CIS is currently affiliated with leading companies that provide various financial services in life insurance, non-life insurance, mutual funds, pre-need, and HMO. A business management and psychology graduate of De La Salle University, she has a passion for analyzing how a person’s lifestyle  is affected by the way he manages his personal finances. After taking up the RFP course, she became a staunch advocate for financial literacy. For questions or comments, kindly send your e-mail to arlyn2005_aig@yahoo.com.

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HOW DO WE SAVE ON COST OF INSURANCE?

Tip #1. Before you buy a new or used car, check into the cost of insurance. If you do not have a preferred agent, you can obtain a quotation from several providers directly and compare.  Generally, you pay more for higher coverage depending on the type of vehicle.

Tip #2. You can ask for higher deductibles. Consider your insurance as a backstop against major losses, not a way to pay for minor scratches and damages. By requesting for higher deductibles, you can lower your cost substantially. But make sure you have adequate savings to pay the deductible amount if you have an accident.

Tip #3. Consider dropping or reducing comprehensive coverage on older cars. Depending on the age of the car, it may not be cost-effective considering that you have to pay higher depreciation costs in case of a claim.

Tip #4. Inquire about discounts. There may be discounts such as No Claim Bonus from your provider if there had been no claims filed in the previous year. There are also fleet rating discounts for the insured with 10 or more vehicles under the same owner.

Tip#5. Look for add-ons. Some insurance companies provide free membership road assistance program like free towing, vehicle breakdown minor repair service, ambulance, alternative transport, etc. if you buy from them comprehensive car insurance. If your provider doesn’t have this service, you can join auto clubs like AAP (Automobile Association of the Philippines) to assist you in case of vehicle breakdown on the road.

Tip #6. Understand the coverage you are buying. Review the provisions of the contract, limits of coverage, etc.  Clarify from your agent/broker and what benefits you can possibly add or delete.

EASY MONEY>WORKSHEET

Calculating How Much Life Insurance You Need

Your typical insurance agent will urge you to cover eight to 10 times your annual income. A more accurate way of determining exactly how much life insurance you need is to run the numbers yourself.

Step 1: Determine what your family needs if you die suddenly

Number one is your daily expenses. For that you need your household budget. How much do you spend regularly every month? If your spouse isn’t working, then enter the entire household budget. Otherwise, deduct the expenses that your spouse can cover. Multiply by 12 to get the annual figure (and add other annual expenses). Assume a reasonable investment return and using the future value formula of Microsoft Excel, you will come up with a replacement fund, which when invested will produce the income needed to pay for your family’s daily requirements. That represents the bulk of your protection needs. One more item: your children’s educational fund. Estimate the tuition of each child from grade school to college and forecast the future value.

Step 2: List down all your debt

You don’t want to leave your family with loans, so include the balance of all your debt, including credit cards, personal loans, car loan, and the mortgage.

Step 3: Compute final expenses related to your death

There are expenses your family has to pay for before and when you pass away, such as your hospital bill, funeral expenses, and estate tax, among others. Obviously these aren’t part of your regular budget, so you need to allot for these. Add the total of your replacement fund, education fund, debt, and final expenses to come up with your total protection needs. Staggering isn’t it?

Step 4: Add up your existing insurance policies and other sources of funding

You may have an existing insurance policy. Perhaps you bought variable unit linked insurance and an endowment plan for investment purposes. Your employer may have purchased group insurance for employees. If you have a mortgage, you definitely have term insurance tied to your loan called mortgage redemption insurance (MRI). Maybe you have a pre-need pension plan with free term insurance coverage. Add up all the coverage amounts. If you have assets like cash, deposits, mutual funds, and other placements that can fund the needs of your family, add those. As an option (since your family may opt not to sell), add the market value of your family home and other real estate properties. Sum everything up to get your total protection sources.

Step 5: Get the shortfall

Deduct your total protection sources from your total protection needs and you’ll determine your total protection surplus – or more likely, shortfall. That’s how much additional insurance

Note: Article was originally published May 2009

EASY MONEY>5 QUESTIONS

Q&A WITH RIEN HERMANS

CEO, AXA Philippines

1. AXA Philippines generation P1 billion in business sales last year, making you one of only two to have achieved that in a single year. To what do you attribute this performance?

It really was no easy feat to again reach the P1 billion mark in new business, especially in the context of last year’s financial crisis. Nevertheless, there are three key reasons why we were able to generate that much new business.

First, we listened to our customers. Given the turbulence in the market, we discovered that investors were looking for instruments that guarantee their capital. Nobody obviously wants to see the account value of their life savings dwindle to nothing. Therefore we developed “Locked & Loaded,” a variable insurance product that protects the principal investment, but allows an upside return in line with the stock market increase over a 5 years period.

On top of this, we also understand that the need to save for retirement and education for the children is understood by many Filipinos regardless of any market conditions. Hence we developed a new retirement offer, MyRetirementPlus, and increased marketing efforts to support our education product, CollegePlus. These products contributed significantly to achieving P1 billion new business sales, and all these actions were a response to what our customers wanted and needed.

Second, we have a strong distribution network with on one side the power of country’s largest bank, Metrobank, offering our products in partnership with our own specialized advisors and on the other side a network of entrepreneurs who have the trust of their, sometimes decennia long, relationship with clients. Despite the difficult market conditions around them, they remained steadfast and delivered by giving the proper and timely advice to our customers’ various financial needs.

Last, and definitely not the least, we were able to hit the P1 billion milestone in new business because of the trust that our customers have put on our brand, our company and our organization. AXA Philippines is a reliable partner in planning for your financial future and we are putting customers at the very center of everything we do. It is as simple as that.

2. AXA is the leader in variable unit-linked insurance in the Philippines. What have been the factors that contributed to this market position?

There are three main factors as to why we have been so successful with the variable insurance category: our products, our people, and our partnership.

Our products have been designed to be very competitive, with a very good range of flexibility such that you can use our unit-linked products either for protection, education, or retirement. Also, the performance of our investment-linked funds has been ahead of competition, testament to the abilities of our fund managers.

Next, our people, our distributor sales force, have been the key drivers in growing variable insurance. It takes a lot of special skills and knowledge to sell variable life insurance, reason why our distributors have to pass a special exam next to the normal Insurance license to advice and sell these products. Our people are knowledgeable, well-trained, highly-skilled financial professionals who are considered the best in the filed of variable life insurance.

The most important factor of our success is the partnership with Metrobank. With their extensive network of branches all over the country, Metrobank gives us the distribution reach and the potential to tap into a very extensive base of high net worth clients. More often than not, Metrobank clients are open to variable life insurance as they see the product to be a strong complement to their entire savings or investment portfolio with the bank.

3 How has the market volatility due to the financial crisis affect investors’ confidence in variable insurance products and AXA specifically?

The current financial crisis is of such a global scale that it has affected investor confidence in all forms of investment products, whether it are variable insurance products, mutual funds, or UITFs.

Unfortunately some investors, also in our products, have let panic and fear dictate their investment decisions the past few months. Our products however are constructed to optimize investment returns for the medium or longer term, let’s say between at least five to 20 years. Mostly they are used as building blocks for a retirement solution or education funding. In times of turbulent economic times our products offer the possibility to move the investments temporarily to a liquidity fund in order to guarantee the capital, while in more bullish times the investments can be redirected, either partly or in full, to investment solution with the potential of higher returns.

In fact savvy investors know that the best time to invest is during market depressions. As Warren Buffet himself has termed it, during times like this, everything is on “fire sale!” Imagine, when will one ever get the opportunity again to purchase blue-chip stocks for 30%-40% of its previous price? For as long as one thinks of their investments for the long-term, everyone knows that the market will always rebound which allows far better returns.

AXA as a global company is far less affected by the economic crisis because it has strategically focused on its core business of insurance, unlike some its competitors who have ventured into other higher-risk financial services such as investment banking, futures, and securities.

Apart from that, AXA has a strong balance sheet and is very solvent. It has a solvency ratio of 127%, which is much higher than what is required by government regulators. What this means is that AXA has a far more than adequate capitalization to meet and protect the promises it has made to its customers. Because that’s what reliable companies do.

4. You’re not a stranger to the Asian market obviously, and you’ve handled ING’s business in the Philippines several years ago. How has the local market changed since then and what opportunities do you see now?

There are two big changes from the period between 1999 and 2002, when I was assigned here before.

First of all, the products have changed as during my first stay there where only traditional insurance products and the market was dominated by 20-year endowments and whole life policies. Changing market demands steered a shift into more investment linked products, where the customer has a chance on better returns, but also has the investment risk. Another change in the product offer is the shift towards much shorter paying periods, with as major proof the high volumes in single premium products in 2006 and 2007.

Secondly there is a change in the distribution landscape as during my first stay in the Philippines there was barely any bancassurance business except from the mortgage redemption products and the credit card related products.

The last change is of course the strong emerging of AXA Philippines in the market, as the organization was very well able to use both developments and became the undisputed leader in single premium unit linked products sold through the strong and extensive Metrobank network.

What didn’t really change is the total penetration of life insurance in the market and the total assets under control of the life insurance companies. In many countries life insurance is advantaged by special tax treatments for individuals. Governments have two reasons to do this: life insurance creates long term funds which are indirectly invested into long term infrastructural enhancements, and the government wants to support people who take care of securing an income after their retirement.

I hope the PERA bill will in this respect bring some new impulses to our industry and proof the economic value of the life insurance industry.

5. On a personal note, are you glad you’re back in the Philippines? What do you enjoy most about your stay here?

I’m very happy to be back in the Philippines as I have always felt welcome and at home here. You might think it is strange, but for me the Philippines felt closer to home than any other country I have been stationed. Maybe it is because of the language, maybe because of the religion, or maybe it is just because of the people who make you feel at home. So in that sense I’m actually a balikbayan.

Apart from that I had a very good experience here in building up a business with a team of Filipino managers, who had a high level of professionalism, drive and passion for making our ambition reality. I’m confident that I can achieve the same in AXA Philippines and get the satisfaction of bringing the company to new heights.

The Four-Way Test for VULs
Confused which variable unit-linked insurance product to invest in? Follow these simple steps
By Rienzie P Biolena, RFP®

Life insurance and investments are like oil and water—they don’t mix well together. Well, at least that is what most personal finance gurus would say. There’s some truth to that. Term insurance in particular is designed for protection—in case you die unexpectedly, your beneficiary will receive an amount that your insurer agrees to pay in the contract.

But life insurance in general has long since evolved into all sorts of variants: whole, universal, variable, endowment, etc. Many of these have a savings component, which builds up over the years. The problem is the returns are nothing to jump at.

But now, that’s changing. Enter variable unit-linked insurance, or VUL. Simply put, it is an investment and life insurance product in one. The difference between a VUL and other forms of life insurance is that part of the premiums is invested in pooled funds which, in time, are expected to grow in value. Hence, the policyholder who is protected with insurance also has an automatic investment fund. A unique feature is that the owner can withdraw from the fund whenever needed.

There is a fixed guaranteed amount of coverage, but the real draw is that there’s a non-guaranteed variable upside. In case of death, benefits received are either the amount of coverage or the market value of the investment, whichever is higher.

Sounds good? There is a growing number of VUL products in the market offered by established insurance companies such as AXA, Ayala Life, Insular Life, Philamlife, Pru Life, and Sun Life. Before getting one, however, you must be clear on your financial goals and needs. This Four-Way Test for VULs—a series of guide questions—can be useful for you:

1. What nature of protection do I need? First assess the nature of your insurance needs. If you have a family dependent on your income, then factor in the coverage the income that will be lost due to your death as well as the future needs of your family. Furthermore, some VULs differ in emphasis on which part of the premium payment is allotted for protection or investment. Consequently, one policy that emphasizes protection coverage has a lower projected return than that of one that emphasizes investment returns.

2. How much can I allot for my premiums? Check the premium payments if they fit your budget. Aside from the regular insurance coverage, you can also opt to upgrade with riders for extra coverage and benefits (such as critical illness benefits, hospitalization, benefits, etc.) for a minimal additional amount on top of the regular premiums.

Payments come in three variants: single-pay, term, or lifetime, with the last two having the option to be paid for in a monthly, quarterly, semi-annual, or annual basis.

In a single pay variant, a lump-sum premium is paid, coverage of which is usually 125% of the premium payment. Single premium minimum prices differ: P50,000 for PruLife’s PIA Peso and Philam’s Money Tree, P100,000 for Philam’s AIG Bounty and Ayala Life’s Express Unit Link, P200,000 for AXA Honey Pot, and P1,000,000 for PruLife’s Pru Millionaire.

Dollar-denominated linked funds usually start their minimum at $2,000. These include Insular Life’s Dollar Wealth Builder and Philam’s AIG Bounty and Money Tree. Ayala Life offers a minimum of $5,000 for its Express Unit Link Product; PruLife’s PIA Dollar, on the other hand, starts at $1,000.

The term payment variant specifies the number of years for premium payments. Term payment usually starts at five years to as long as 15 years. PruLife’s Exact Plus, Premier 15 Plus, and Capital Secured Plus, and Philam’s Asset Builder and AIG Bounty are among the products that offer term payments. Term payment can be as low as P33,000 per annum for PruLife’s Capital Secured Plus. Dollar products can get as low as $40 monthly for PruLife’s PruLink Exact Plus to $2,000 a year for Philam’s AIG Bounty.

Lifetime payments have premium outlays for the duration of the policy holder’s life. Peso products range from a minimum of about P12,500 p.a. for PruLife’s PAA Peso to P25,000 for Philam’s Abundance; while dollar products are offered as low as $240 p.a. with PruLife’s PAA Dollar.

Aside from these options, VUL policyholders may also apply for a premium holiday. Here, the policy owner can suspend payments of regular premium and top-ups, as long as the account value of the policy is sufficient to cover the policy charges due during the premium holiday applied for.

3. What is my attitude towards risk? The other half of VULs involves investments. And when investments are involved, risks are involved. A useful rule of thumb is the concept of risk-reward trade-off —the higher the return, the higher the risk.

At the onset of the policy, the insurance agent shall disclose the array of products to which the investment can be linked with. Options include usually a money market fund, bond fund, balanced fund, and equity fund. Most VULs allow you to choose at least two funds. AXA and Insular Wealth Builder offer up to three.

But linking funds does not mean that the investor is tied to them throughout the term. A novelty feature of VULs is that the investor can shift across and change allocation among funds. For instance, a policy holder that has a bond fund at the onset can shift 50% of his units later on to an equity fund. The number of free switches, however, has limits, with excess switches subject to fees and charges. SunLife and AXA, for instance, offer four free switches; AyalaLife, two; and PruLife and Philamlife, one.

There are also products in which the company predetermines the linked fund like PruLife’s Capital Secured Plus and, to some extent, SunLife’s FlexiLink MyFuture Funds. Allocation for these products is solely determined by the company, which by their judgment can give the best yields and protect potential gains from sharp market volatility.

4. What is my liquidity requirement? VULs provide liquidity through withdrawals of outstanding units so policyholders can cash in on their unrealized gains. Some companies, however, subject these withdrawals to specific charges or fees, with back-end charges typically ranging between 1% and 5% of the withdrawn amount.

As a general rule, VUL investors may withdraw from their funds anytime. Withdrawals, however, are subject to a minimum maintaining balance sufficient to contribute to insurance premium payments. Philamlife has a minimum maintaining balance as low as P5,000 for its Money Tree product while PruLife has a low maintaining balance of P20,000 for its PIA Peso.

Moreover, partial withdrawals depend on each company and per product. Other products also feature a premium payment lock-in with no withdrawals allowed within a specified number of years. For instance, Philam’s Asset Builder has a lock-in period of 15 years, but with an off-setting benefit of providing as much as 25 times insurance coverage for the face amount of the policy. Ayala Life’s Express Unit Link, on the other hand, has a minimal holding period of 180 days.

Although VULs provide for cash requirements, policyholders should also be aware that full withdrawals shall have the effect of nullifying the insurance policy. As such, they must be cautious that it should not be a main source of liquidity requirements.

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The Two Sides of VULs
There are two components of variable unit-linked insurance products – insurance and investments. Here’s what you need to know:

Investment component
Policyholders get to choose which particular fund from a limited selection to invest in, identified at the onset of the policy. Contributions are sourced in part from the regular premiums paid or from extra contributions called top-ups. The percentage invested typically range between 15% and 100%, depending on the insurance company and product.

This amount is then used to buy units in pooled funds, at the price called Net Asset Value per Unit (NAVPU) at the time of purchase. Release of NAVs varies from company to company. PruLife, AXA, and Philamlife, for instance, release NAVs weekly, while Ayala Life and SunLife do it daily. While a weekly quotation of NAV may provide for some protection against price volatility, it may also keep the potential investor to take on a daily, tactical position on price changes.

The investments are also subject to various fees and charges. Basic to these are front-load charges, back-end charges, and management fees. A front-load fee is a charge against the face amount of the investment, usually pegged at 5%. For instance, a P100,000 investment, will only end up with P95,000 available for investment. Moreover, a company may charge a back-end fee for withdrawals, which is deducted from the amount withdrawn. Management fees, on the other hand, are deducted for the administration of the pooled funds. It is best to check the fees involved for each company and product in order to get a clear picture of the total costs.

It is also important to look up the return on investment for each fund since the death benefit is linked to the performance of the underlying funds. While past performance is not a guarantee for future results, you should still consider a consistent track record.

Insurance policy
While VULs are often marketed as investment vehicles, don’t forget that they remain an insurance product. If you’re the insured and you die a week after getting the policy, your beneficiary will receive the death benefit. It may be morbid but that kind of return on investment is unbeatable.

What you ought to be hoping for obviously is to live longer than that. A VUL provides death benefits based on the coverage or the market value of the underlying investment, whichever is higher. This gives the benefit of riding the market in order to further increase protection, without sacrificing the sum assured. Being an insurance product, the policy may also include riders—extra benefits in the form of hospitalization, critical care or illness benefits with an additional, usually minimal, increase in premium payments.

To sum, VULs provide the flexibility and liquidity of an investment, coupled with the protection of an insurance policy. Each prospective policyholder has unique needs and goals and must therefore match the product accordingly. It is strongly recommended that you visit an insurance agent to know the latest products and features. Or consult a professional, unbiased financial planner to assist you to plan for your financial needs as a whole.

EASY MONEY>HOW TO

How to File a Car Insurance Claim

You get into a car accident. Bummer. What do you do now?

Step 1: Call a traffic officer

Call police hotline 166 to report the accident. Then wait for a traffic officer to investigate. Of course, if it’s a serious accident involving physical injury, call for an ambulance (your insurer can help you here). Verbal admissions and assurances are not enough. Make sure you get a police report always.

Step 2: Call your insurance company

You should have the hotline of your insurer on hand (insurers usually issue a sticker or a card that you can place in your car; save that number in your cell phone as well). A representative will walk you through the process of filing a claim.

Step 3: Exchange information

Exchange contact information (name, number, address) with the other driver as well as details on the car (model, plate number) and insurance policy (name, number). If it’s a major accident, identify witnesses and ask for their names and phone numbers in case their account of the accident is needed.

Step 4: Prepare required documents

Prepare all the necessary requirements such as the police report (or your insurer’s accident report form), policy report or a notarized affidavit, photocopy your car’s official receipt and registration certificate (OR/CR), photocopy of your driver’s license and official receipt, and photos of our car (damaged portion and entire car with the license plate visible). Submit these documents to your insurer where a claims examiner then will evaluate your claim.

Step 5: Have your car fixed

If the damage is minor, you can bring your car to your insurer’s claims evaluation center, where an assistant will assess the repair cost. If it’s major, many insurance companies will have your vehicle towed to any of their accredited car repair shops, which will then assist you regarding the documents and repair of your car. Often, your insurer will simply reimburse the car shop instead of issuing you a check.