How Do Car Insurance Companies Pay Out Claims?

If you’re injured in a car accident, receiving an insurance claim payout is a major hurdle. Let’s assume you’ve filed a claim and an insurance company has evaluated and approved it. In California, an insurer has 30 days to pay a settled claim.¹ To help you better understand what to expect, we’ll look at how car insurance companies pay out claims in more detail.

How an Insurance Claim Is Paid Out

The at-fault driver’s insurance company will pay for vehicle repairs and accident-related medical expenses. If you have a full policy with collision coverage, the insurer should pay for repairs up to the vehicle’s actual cash value. That’s once you’ve paid the deductible and if the cost of repairs is less than the car’s overall value. If the car is considered totaled, the insurance company will instead send a settlement check equal to the vehicle’s pre-accident value.

Here’s who may receive the payment depending on the circumstances:

  • You: If you own the car, you’ll receive a settlement check or direct deposit into your bank account from the insurance company. You are free to use the check however you want.
  • An Auto Body Shop: The insurance company can send the settlement check directly to an auto body repair shop upon your approval.
  • A Lender: If you have an outstanding loan on the car, the settlement amount may go toward paying off the remaining balance. The lender may also use the check to pay the repair company or verify the accident occurred and sign the check over to you.

Can I Still Get an Insurance Claim Payout If I Lease My Car?

Being a leaseholder doesn’t necessarily exclude you from receiving a settlement check. The bank will have to approve the transaction, and the lender may request to see the car, photographs of it, or the repair bill. The dealership may also have to confirm the car was repaired. These extra steps can delay payment, but in the end, you can still get a payout from the insurance company.

A lease agreement or financing contract usually requires using insurance payouts for repairs. Failing to do so will violate your contract. If the damage isn’t fixed and the car is returned to the lessor or repossessed, you’ll be held financially responsible.

What If Your Insurance Company Can’t Reach the At-Fault Party?

It will contact the at-fault driver’s insurance company directly. Your uninsured/underinsured motorist coverage will usually cover the claim if the other party’s insurance company doesn’t cooperate or their insurance information isn’t available.

Can I Get Paid for Claims Made with Two Insurance Companies?

You can have two insurance policies for the same vehicle. Most likely, your policy has an “other insurance clause”. It states the policy will only pay for a portion of the claimed loss. Therefore, you can’t profit from an insurance transaction. After all, insurance is intended to compensate for the loss to make you whole.

Every Insurance Claim Is Different

The payment process differs for every claim, depending on its type and size. Keep in mind if the damage to your car was minor, getting a claim check may take just a few weeks. For major damage, it may take years to receive an insurance payout.

Contact The Law Offices of Jacob Emrani

If an insurance company denies your claim, offers a lowball settlement, or treats you unfairly, The Law Offices of Jacob Emrani will fight for your rights. Accident-related injuries can take years to recover from and incur expenses you cannot afford. Our Los Angeles personal injury attorney knows how insurance companies pay out claims and the tactics they use to get out of paying them. Call (888) 952-2952 or contact us online to receive your free consultation.



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southern california


714 W. Olympic Blvd.
Suite 300
Los Angeles, CA 90015


Our Main Location

Los Angeles

serving southern california


714 W. Olympic Blvd.
Suite 300
Los Angeles, CA 90015


(888) 508-5085