• Laws on insurance claims for auto accidents protect claimants' rights.auto image by Falk from Fotolia.com
  
  The laws for insurance claims for auto accidents differ from state to state. An auto insurance claim represents a demand for payment. The insurer has the obligation to pay the insured or a third party no more or less than what is covered under the policy. Most states have an insurance board or agency that has the responsibility to oversee automobile insurance companies and the claims process.
  
  

Function

• Insurance claims represent official demands for payment from insurance companies according to the terms of the insurance coverage. Most states require motorists to carry mandatory minimum liability insurance coverage. There are also claims based on other types of coverage, such as uninsured/underinsured, collision and comprehensive.
  
  When policyholders submit claims, the insurance company evaluates the claim and the facts surrounding the accident. Upon completing its investigation, the insurer may issue a payout. The insurance company may replace damaged or stolen vehicles. The insurer can also repair the damaged automobile or pay cash for the loss.
  
  

File Claim

• The majority of states have clear guidelines auto insurance companies must follow to process insurance claims. Claimants must file timely and accurate claims. Each company has procedures claimants must follow. Nearly all states have insurance laws requiring insurers to settle claims promptly. Some states require insurance companies to acknowledge the receipt of auto claims within specific periods.
  
  Texas requires insurance companies to respond to claims within 15 calendar days of receipt. Some states have statutes of limitation for accepting claims or filing a lawsuit. For example, in Illinois a bodily injury claim has a two-year statute of limitations or five years for property damage from the date of the claim.
  
  

Payment of Claim

• The insurance company also has 15 days after receiving all the pertinent documents and information to deny or approve the claim. The insurer may take an additional 45 days, but must notify the claimant and tell him why there is a delay. Failure to follow these rules entitles the policyholder to collect 18 percent interest. In addition, the insurer must pay attorney fees and legal expenses.
  
  

Repair Shop

• The insurance company cannot require the insured to use a recommended repair shop for any aspect of repairing the vehicle. Usually, the insurer can choose the brand, type, vendor or condition of any part and use his own repair shop. Costs that exceed the limits of the policy mean the policyholder would have to pay the difference out of pocket.
  
  

Liability Claim Settlement

• Generally, auto insurance laws state that insurers must inform policyholders when the company pays a third-party liability claim against the vehicle policy. In Texas, the statutes states that companies have 10 days from the date of an offer. The regulations require the insured to be notified of settlements within 30 days after the settlement date.