You’ve just been in a car accident. When you exchange insurance cards you find that you and the other drive have the same insurance company.
Is this a good thing?
Will it speed up the settlement of any claims?
You might think so. But the truth? Probably not, according to insurance experts and attorneys.”Things go the way they usually do,” says David Meltzer, an insurance agent with Baltimore’s East Insurance Group.
Meltzer did say there is one important exception, and it has to do with your deductible if you are the person who was hit and the other driver will probably be found at fault in the accident.
What same insurance means for deductibles
Say you’re the driver who was hit: Your insurance company, because it represents both you and the driver who hit you, might not require you to pay your deductible when you repair your car. This is a significant change. In most accidents when you and the other driver are represented by different insurance companies, even if you are not at fault, you might have to pay upfront for some of the repairs to your car, depending on your deductible.
If an accident caused $3,000 of damage to your car and your deductible is $500, you’d have to pay for the first $500 of repair work before your insurance company picks up the cost of the remaining $2,500. If you are eventually found not to be at fault, your insurance company would most often reimburse you for the amount you paid out of pocket.
If you and the other driver are represented by the same insurance company, the process works a bit differently, Meltzer says. In such instances, the insurance company usually doesn’t require a driver who was hit and clearly not at fault to pay any money out-of-pocket for car repairs. That money instead would usually come from the policy of the driver who was to blame for the accident.
Of course, this only holds true when it’s clear who was at fault. The deductible benefit might not come into play if the insurance company and its adjustors need to investigate which of the drivers actually caused the accident.
Don’t expect faster insurance claims
Besides the deductible situation, there are no other benefits – or disadvantages – when both drivers have the same insurance, says Evan Walker, a personal injury attorney based in La Jolla, California, who routinely handles auto accident cases.
Walker saysthat insurance companies are required to treat claims the same whether the other driver is represented by the same insurer or a different one.
“It doesn’t really make a difference,” Walker says. “Insurance companies have statutory duties to handle claims efficiently.”
Don’t expect your claim to be processed any faster, either, just because you and the other driver have the same insurance company. Your insurer will assign both you and the other driver a different adjuster. And these adjusters will determine who is at fault in an accident and the size of any payouts, just as they would if they were working for different companies.
Remember, your adjuster and the one representing the other driver might not work in the same office or even in the same city, even if they both work for the same insurance company.
Same insurance, but different adjusters
Thomas Simeone, a personal injury attorney with the Washington, D.C., law firm of Simeone & Miller, says that it is a common misperception that the claims process will be a faster one when both parties of an accident are represented by the same insurance company.
“Many people think that if everyone has the same insurance, that will speed up the settlement of any claims, but that is generally not true,” Simeone says.
The reason? Policy holders get their own adjuster. And these adjusters do everything they can to minimize how much the consumers they represent have to pay on claims.
“For all intents and purposes, they act as if they are with different companies,” Simeone says.
Simeone also says that just because you and the other driver are represented by the same insurance company doesn’t mean that your insurer won’t try to lowball you on a payment. So don’t just accept an offer that doesn’t seem fair to you. Your insurer is also representing the other driver, don’t forget.
“The best thing for anyone to do is not to assume that the claim is more likely to be paid or paid well because everyone has one insurance company,” Simeone says. “Instead, proceed as you would if everyone had a different policy.”