How Car Insurance Companies Handle Accident Claims in California
Car insurance companies handle accident claims in a set order: they open the claim, investigate, decide who was at fault, value your damages, make an offer and pay once you sign a release. California law puts deadlines on most of those steps. I began my career at firms defending insurance companies, and for more than 20 years I’ve represented injured people against them, so I’ve seen this process from both sides. Here’s what the adjuster is doing at each stage, and what you can do about it. If you were hurt in a crash in Tustin, you can also talk to a personal injury lawyer about your claim at no cost.
Whose insurance do you deal with?
Usually both: your own insurer and the other driver’s.
- The other driver’s insurer (a “third-party” claim) pays for your injuries and vehicle damage if their driver caused the crash.
- Your own insurer (a “first-party” claim) may pay under your collision coverage, medical payments coverage (med-pay) or uninsured/underinsured motorist coverage. The California Department of Insurance describes med-pay as coverage that can pay for immediate medical care “no matter who is at fault.”
The two have different interests. Your own insurer owes you duties under your policy. The other driver’s insurer owes its duties to its own customer, not to you.
Step 1: Reporting the accident
Report the crash to your own insurer promptly, and to the DMV if required. California requires an SR-1 report to the DMV within 10 days if anyone was injured or killed, or property damage is over $1,000, regardless of who was at fault (DMV accident reporting).
Give your insurer the basic facts: date, time, place, the other driver’s information and the police report number. You don’t need to guess about your injuries or fault in that first call.
Step 2: The insurer acknowledges the claim and investigates
Insurers must acknowledge your claim within 15 calendar days. Under California’s Fair Claims Settlement Practices Regulations, an insurer must, within 15 days of notice of the claim, acknowledge it, provide any forms you need, and begin its investigation (10 CCR 2695.5(e)). These rules apply to claims against the other driver’s insurer too: the regulations define “claimant” to include third parties.
The investigation usually includes the police report, photos, vehicle damage, witness statements and, if you claim injuries, your medical records. The regulations require “a thorough, fair and objective investigation.”
Step 3: The recorded statement
The adjuster will usually ask to record a phone interview with you. Your own policy may require you to cooperate with your own insurer, which can include a statement. The other driver’s insurer is a different matter: there’s rarely a good reason to give it a recorded statement before you’ve talked to a lawyer.
Here’s why. California uses comparative fault, so any share of blame the adjuster can attribute to you reduces what they pay. Recorded statements often include questions like:
- “You didn’t see the other car until the last second, right?”
- “Were you running a little late that morning?”
- “How are you feeling today?” (asked a few days after the crash, before symptoms have fully shown up)
A friendly “I’m fine” or “I guess I could have braked sooner” can be quoted back to you months later.
Step 4: Deciding who was at fault
The insurer assigns fault as a percentage. Under California’s pure comparative fault rule, you can recover even if you were partly to blame; your compensation is reduced by your share. If the insurer says you were 30% at fault, it will offer 70% of what it thinks your claim is worth.
That’s why evidence matters early: photos, witnesses and video. My article on getting traffic camera footage after an accident explains how to find and preserve video before it’s erased.
Step 5: Valuing your damages
The adjuster values your claim from your records, not from how you feel. Expect them to look at:
- medical bills and records, including gaps between the crash and your first visit, and gaps in treatment
- lost wages
- vehicle repair or replacement
- pain and suffering, which they try to tie to the medical records
Delayed symptoms are a common battleground. Concussion symptoms, for example, can appear hours or days after a crash; my post on delayed concussion symptoms explains what to watch for. Injuries that don’t fully heal also change the value of a claim: see how compensation increases with permanent injuries.
One California rule surprises people. Under Proposition 213 (Civil Code section 3333.4), a driver who was uninsured, or convicted of DUI for the crash, generally can’t recover non-economic damages such as pain and suffering, though they can still recover economic losses like medical bills.
Step 6: Accepting or denying the claim
After receiving proof of your claim, the insurer has 40 days to accept or deny it. If it needs more time, it must tell you in writing what it needs, and update you every 30 days until it decides (10 CCR 2695.7(b) and (c)). Denials of third-party claims must be in writing, and a denial letter must tell you that you can have it reviewed by the California Department of Insurance.
Step 7: The settlement offer
First offers are usually low, and the regulations recognize that risk. California’s rules state that “no insurer shall attempt to settle a claim by making a settlement offer that is unreasonably low” (10 CCR 2695.7(g)).
An adjuster may tell you, “This is the most I’m authorized to offer.” That can be true. Adjusters work within settlement authority set by a supervisor. But authority can be raised. The way to get there is evidence that justifies a higher number: complete medical records, wage loss documentation and a clear account of fault.
Policy limits matter too. California’s minimum liability coverage is now $30,000 per person, $60,000 per accident for injuries and $15,000 for property damage. If your losses exceed the other driver’s limits, your own uninsured/underinsured motorist coverage may make up the difference. My post on the myth of “full coverage” car insurance explains what most policies really cover.
Step 8: The release and payment
Settling means signing a release that ends your claim for good. Once you sign, you can’t come back for more, even if your injuries turn out to be worse than you thought. Some settlements also include confidentiality terms; see how to handle confidentiality clauses in settlement agreements.
There’s rarely a real reason to sign quickly. Once a claim is accepted and any needed release is signed, the insurer must pay within 30 days (10 CCR 2695.7(h)).
“You don’t need a lawyer”
An adjuster shouldn’t tell you not to hire a lawyer. California’s Insurance Code lists “directly advising a claimant not to obtain the services of an attorney” among its unfair claims settlement practices (Insurance Code section 790.03(h)). So is “misleading a claimant as to the applicable statute of limitations.”
If you think an insurer isn’t following the rules, you can file a complaint with the California Department of Insurance. Keep in mind that the Department regulates insurers; it doesn’t act as your lawyer or value your injury claim.
California claim deadlines at a glance
| Step | Deadline | Rule |
|---|---|---|
| Report to DMV (SR-1) | 10 days, if injury, death or over $1,000 damage | DMV |
| Insurer acknowledges claim and starts investigating | 15 calendar days | 10 CCR 2695.5(e) |
| Insurer accepts or denies | 40 calendar days after proof of claim | 10 CCR 2695.7(b) |
| Written update if more time is needed | Every 30 days | 10 CCR 2695.7(c)(1) |
| Payment after acceptance | 30 calendar days | 10 CCR 2695.7(h) |
| Lawsuit for injuries | Generally 2 years | Code of Civil Procedure 335.1 |
Car insurance claim FAQs
Should I give the other driver’s insurance company a recorded statement?
You generally don’t have to, and it’s rarely in your interest before you understand your injuries and have talked to a lawyer. Your own policy may require you to cooperate with your own insurer.
How long does an insurance company have to respond to a claim in California?
It must acknowledge the claim and begin investigating within 15 calendar days, and accept or deny it within 40 days of receiving proof of claim, with written updates every 30 days if it needs more time.
Do I file with my insurance or the other driver’s?
Often both. The at-fault driver’s insurer pays for your injuries and damage, while your own policy may cover medical payments, collision and uninsured or underinsured motorist claims.
Can an adjuster tell me I don’t need a lawyer?
They shouldn’t. California’s Insurance Code lists directly advising a claimant not to obtain an attorney among its unfair claims settlement practices.
Talk to a Tustin personal injury lawyer
I spent the early part of my career on the insurance side, and I know how adjusters build and value a claim. If you’re dealing with an insurer after a crash, call me at (714) 461-6003 or request a free consultation. You’ll work directly with me, and under my No Recovery, No Fee Guarantee you pay nothing unless I recover compensation for you. Learn more about my work as a Tustin personal injury attorney and handling car accident claims.