What to do after a car accident

It's material you'd rather not read. But if you're in a car accident, you'll need to be familiar with the policy, the process and the payments.
By Insure.com

Your heart is beating hard, you're breathing fast and you can't believe you just got into an accident. Look around. You're alive? Good. Everyone else? Even better. Now here's what you need to do once the dust settles.
You should:

Think that's the end of it? Read on.

The policy
Admit it. You've never read your auto insurance policy, you don't want to read it and even if you're in an accident, you're still not sure if it would force you into those endless lines of fine print and insurance-speak. Assuming you can even find the policy. If you can, look in the back for what are called the conditions of your policy -- what you are supposed to do in the event of an accident. These requirements are pretty straightforward, although compliance may seem like a hassle when you're already upset by the accident itself. But you may forfeit some of your rights if you don't follow these instructions. Next, look at the cover sheet of the policy, which is called the declarations page and which lists the types and dollar limits of your coverage, including short-hand references to any discounts or special provisions you have elected to purchase. Last, there's the actual insuring agreement itself, which explains what your insurer is protecting you against, including definitions of terms used in the agreement and explanations of what's not covered (called the exclusions). If you don't understand your policy, keep calling your agent and/or state insurance department until you get clear answers to your questions. Most people have heard that ignorance is no defense under the law, but they don't think they'll ever have to find out. Auto accidents are one of the most common ways to discover the sobering cost of ignorance.

The payments
Hopefully, your accident involves only damages to things and not to people. And, hopefully, it wasn't your fault. Even if it's just your car that's banged up, repairs can be a major headache. This is where the reality sets in that replacement cost is not the same thing as market value. Your car can easily be declared a total loss even though the money you'd receive is nowhere near what it would cost you to replace the vehicle. The best advice about getting your car fixed is to remember that the money may be coming from the insurance company but you should control the repair process. This means refusing to settle for a repair job you don't like. And it may also mean refusing to accept the use of generic replacement parts instead of the original manufacturer's parts (your policy may give your insurer the right to use generic parts, so it's important to check the fine print to know your rights). Even if your favorite shop doesn't do the repairs, you can still have your mechanic look at the car (although this may be at your personal expense) and provide an assessment of what should be fixed. Ultimately, it's your car and your call about what's done to it. Talk to your agent and/or insurer about your rights (better still, you should really ask these questions before you buy a policy). And if you don't like the answers, call your state insurance department.

Prep Your Vehicle for Sale

When selling your car to a private party, make it look presentable to maximize the return on your investment.

Make It Presentable Fix Obvious Damage Windshield & Tires

Paintless Dent Repair/Airbrush Touch-Up Remember the Service Records Other Considerations

When you decide to sell your car, whether you sell it to a private party or trade it in to a dealer, you want to maximize the dollars that you put in your pocket.

Following are some helpful tips on preparing your car for sale.

Make It Presentable
Number One Most Important Thing is to CLEAN the Vehicle Inside and Out.
It is a great idea to take it to a professional detailer and have them clean the interior, exterior and engine. A clean, shiny car gives the impression that you care about the car and have maintained it in good condition. On the other hand, a dirty car full of fast-food wrappers does exactly the opposite, and may unfairly devalue your car in the eyes of potential new owners.

Fix Obvious Damage
You should fix any broken items that are easy to replace, such as lenses and headlights, You don't want to give a buyer a reason to not buy your car.

Paintless Dent Repair and Airbrush Touch-Up
Paintless dent repair can be a good alternative to traditional body shop repairs for small dents and dings. Airbrush touch-up of small scratches and chips is also a good idea because it is cosmetic and it makes the car look better. The repairs are done quickly and many companies will do the work on-site for you.

Windshield and Tires
If the windshield is cracked, you should replace it Your car’s tires should have some tread life left on them. Tires must be the proper size and match for the vehicle. If you are trading the vehicle in to a dealer, the tires should be fairly new to avoid a deduction when the car is appraised.

Remember the Service Records
Try to have all records complete and neatly arranged for your prospective buyer, this will instill confidence that the car has been well cared for. If the car has been serviced at a dealer, the service records will be stored on a computer. Ask the dealer for a copy of the service history for your car.

Other Considerations
Be objective about the condition of your car, and be honest with prospective buyers about any serious problems or repairs the new owner will have to assume. Sell your car "as is." You are not a dealer and you are not required to provide any type of warranty on the car. But be careful that you don't intentionally misrepresent the vehicle's condition, or the buyer may have some recourse. Include a statement in your bill of sale that the car is sold "as is," and keep a copy of the bill of sale for your records. The bill of sale will establish the date of sale and help protect you from any further liability. Finally, ask for payment by cashier's check or money order to avoid the hassles that can result from a personal check or a cash transaction.

How to Save on Auto Insurance - 12 secrets your car insurer won't tell you

Knowing how the industry works can save you a lot of money and grief. Here are the secrets behind the premiums, and how you can save after an accident.

Getting a good deal on auto insurance is hard enough. Keeping your premiums from rising? That can feel like playing a game where the rule maker refuses to tell you the rules.
Here are a dozen ways the industry works, with tips to help you save:

If you have good credit, you'll pay less. Almost all insurers -- including the top five -- pull your credit report. Why? Studies have shown a direct correlation between your credit score and the likelihood that you will file a claim. Insurers also know that if you pay your bills in a timely fashion and have had the same credit accounts for a long time, you're more stable than someone who pays late and frequently opens and closes accounts. They use this information to create your "insurance risk score," which is one factor that determines your auto-insurance rate.
Tip: Your insurance-risk score is not available to you, but it may be similar to your credit score. If you have unusual credit activity, wait a month for it to return to normal before buying auto insurance. If your credit history is shaky, clean it up as soon as you can.

Your car model affects your premium. You won't get these numbers from your insurer; in fact, you may not be able to get them at all. But the auto insurers do have a rating system for every car make and model. Most use a system devised by the Insurance Services Office, which starts with the cost of the vehicle and then factors in safety and theft data. Cars are given a rating from 1 to 27, and the higher the number, the higher your premium.
Tip: If you're buying a new car, ask your insurance company about the difference in premiums for cars you're considering. Search online for the latest top 10 lists on the most expensive cars to insure, and the least.

Pay in full to avoid installment fees. "Fractional premium" fees are usually charged when you pay your annual premium in installments rather all at once. Payments usually are offered on a six-month, quarterly or monthly basis, but almost every insurance company charges an administrative fee for breaking up the payments. The more you break it down, the more those fees add up.
Tip: Ask about fees for paying in installments. If the fees are small enough, it may be worth it. Remember that insurance companies can cancel your policy for late payment, many times with minimal notification, so make sure you won't miss an installment. If you can pay the premium up front, it may simplify the process and save you a few dollars.

That Pearl Jam CD in your car isn't covered. Stolen or damaged personal items like compact discs aren't covered by your auto insurance.
Tip: You can file a claim on your home insurance. Most home-insurance policies will cover smaller, less expensive items such as compact discs. However, if you carry expensive items such as computer equipment, ask about a rider to your home-insurance policy. It's wise to take photos or video of any expensive personal items before they go missing.

You'll pay for your bad driving. The industry standard is to increase your premium by 40% of the insurer's base rate after your first at-fault accident. For example, if the company's base rate is $400, your premium will go up by $160. Not all auto insurers play by this rule, though, and some may increase your individual rate by 40%. Regardless of what formula they use, in the majority of cases, your rates will go up.
Tip: Some insurance companies have a "forgive the first accident" policy. The qualifying variables are wide-ranging, so ask your company if it has a forgiveness policy and how to qualify.
Improving your credit score and shopping around can help you benefit from new pricing rules.

You'll pay for your friend's bad driving, too. If your friend borrows your car and crashes it, you'll have to file a claim with your insurance company. You'll have to pay any deductible that applies, and your rates will probably go up as a result of your claim.
Tip: If your friend didn't have permission to take your car, in most cases you won't be held liable for the damage. But if your friend is uninsured and causes damage that exceeds your policy limits, the injured party can come after you for medical and property-damage expenses. Best bet? Don't lend out your car.

The value of your "totaled" car may surprise you. Auto-insurance companies don't use the standard Kelley Blue Book or National Association of Automobile Dealers value. Instead, each company has its own proprietary list of car values, and most have specialized software for valuing cars in each region. They take into consideration the car's mileage and pre-accident condition.  The insurance company may also ask local dealers what they'd charge for a similar replacement car. However, the insurer will consider quotes from suburban towns as reasonable estimates, even if you live in the city. You might have to drive several hours to reach the cheapest dealer, just to save the insurance company money. And they might be quoted a better deal than you could get if you walked onto the lot.
Tip: If you disagree with your insurance company's value determination, there are several things you can do:

• Next time, get "gap" insurance. It will pay the difference between what an insurer will cover and what you owe, which can be several thousand dollars.
• If you have maintenance records that show you've had the oil changed every 3,000 miles and you've had the car checked routinely by a mechanic, present copies to the insurance company to show the car was in good condition. If you've been paying premiums on any special parts or upgrades, make sure those are included in the insurance company's evaluation.
• Get price quotes on replacement cars from three dealers within a reasonable driving distance and submit these to your insurance company. Ask the insurance company for a list of dealers within a specific distance who can sell you an equivalent car for the value the company is claiming.
• If you still aren't satisfied, you can step up the process and go to mediation or arbitration. Mediation involves presenting your case to a neutral party for help in reaching a compromise; arbitration is a binding decision. You can also, of course, take the issue to court.

Check into "diminished value." Say your car has been in an accident, but repaired. Is it worth less than the exact same car that hasn't been in an accident? It's a hot topic, but some say yes. In 14 states, you're allowed to file a claim with your insurance company for that lost value.
Tip: Thirty-six states and Washington, D.C., allow insurance companies to exclude payments for diminished value, so if you live in one of those states, you won't get to claim the loss. But in Florida, Georgia, Hawaii, Kansas, Louisiana, Maine, Maryland, Massachusetts, North Carolina, South Dakota, Texas, Virginia, Washington and West Virginia, you have a chance of getting a diminished-value payment. If you weren't at fault in the accident, you often can make a successful case against the insurance company of the driver who was at fault.

You may not owe sales tax on your replacement car. Twenty-eight states require auto insurers to pay for the sales tax when you replace your totaled vehicle with a new or used car: Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Vermont, Washington, West Virginia and Wisconsin.
Tip: Make the request; don't expect the insurer to offer to pay upfront. Even in states that do not require sales-tax reimbursement, you should request it. Many auto insurers will not deny the request because the policy requires that they make you "whole," returning you to where you were before the accident at no cost to you.
The tax will be calculated based on the pre-accident value of your car. If the insurance company values your car at $10,000, and you purchase a new car for $20,000, the tax will be calculated on $10,000.

Hit by an uninsured motorist? Try to "stack." Stacking uninsured/underinsured motorist (UM/UIM) coverage’s means collecting from more than one auto-insurance policy that you hold. Most states forbid this practice, but 19 states allow it or don't address it.
Tip: Check the language of your policy to see if stacking is allowed.
There are two scenarios for stacking: First, if you have multiple cars on your policy with UM/UIM coverage on each, you can collect the limit of your UM/UIM coverage under as many vehicles as necessary to cover full payment for damages. Second, if you have more than one policy with UM/UIM coverage, even if they're from two different insurers, you can make a claim under each policy until all your damages are recovered.

You can wait to add your teenager to your policy until he or she is licensed. You are not required to add your teenager to your policy just because he or she has reached driving age. In most cases, you can wait until he or she has a license -- or, if you're in a high-risk insurance pool, a permit.
Tip: Don't forget to tell your insurance company that you have a licensed teen. If you have to file a claim on his or her behalf, your insurance company is entitled to charge you back premiums from the date your teen received a license.

Improving your credit score and shopping around can help you benefit from new pricing rules.

You must officially cancel your insurance policy when you switch insurers. Your policy most likely states that you can cancel your coverage at any time by notifying the company in writing of the date of termination. However, most people assume that if they decide to terminate the policy at the end of the coverage period, all they have to do is ignore the bill. The insurance companies don't see it that way. They will send you another bill for the next premium payment, and when you don't pay it, the company will cancel you for nonpayment. That goes on your credit record.
Tip: Call your insurance agent or the company and let him know you are canceling your policy. Give a specific date, or you may end up uninsured for a period of time. The company will send you a cancellation request. Most often, the form is already filled out and all it requires is your signature. Make sure you read it to check for errors. You may have to prove to your former insurance company that you have new coverage. And if you've financed your car through a dealership, update the dealer on your new insurance information, because purchase contracts often require proof of coverage.

Sell vs. Trade

Sometimes the toughest part of buying a new or used car is figuring out what to do with your present one.

Trading In Your Vehicle

Selling Your Vehicle Yourself

Donate Your Vehicle to Charity

Trading your car in to the dealer is usually the most convenient way to go. Buying a used car almost always means selling one, too—your own. If you're shopping at a dealer, trading-in your present car as part of the transaction is certainly the easiest strategy, but is it always the smartest? And what if you're negotiating a private-party sale where a dealer is not involved? RFM reviews the three most common options for you.  Comparing these options should help you find the one that works best for you.

Trading In Your Car
Trading in your old car is the easiest way to cope. In fact, because even dealers of used cars generally want your trade-in, they make the procedure as easy as possible. Trading in a car is usually a same-day transaction with minimal fuss and bother. The dealer assesses the condition of your car, its age, and other factors and determines its trade-in value. You can bargain over the trade-in value if you like, or simply accept the dealer's value. In the end, the amount the dealer gives you for your trade-in is deducted from the amount you pay for your new vehicle.
Trade-in value is generally lower than the amount you could sell the car for yourself in a private-party sale, but by trading in you avoid significant pitfalls. You save time, effort and potential post-sale headaches. Trading in is about convenience—there are no advertisements to place, no test drives to arrange, and no legal battles to fight if your recently-sold car breaks down. For those people without the time or inclination to sell a car on their own, trading in makes sense. Once a car is in the dealer's hands, it's the dealer's responsibility to prepare it and handle the resale. Trading-in may also offer a tax advantage if you are buying a vehicle at the same time. In most states, when your car is taken in trade you only pay sales tax on the difference in cost between its trade-in value and the price of the new car. For example, if a dealer gives you $10,000 on your trade-in and the purchase price of the car you are buying is $25,000, you'll only be required to pay sales tax on the $15,000 difference between the two amounts. In states with a high sales tax, this benefit can help narrow the difference between trade-in value and private party price.

Selling Your Car Yourself
Selling a car on your own is good insurance that you'll obtain top dollar, and it may be your only option if you are buying your next vehicle through a private-party sale. But be aware of the work involved. Prepping your vehicle for sale will take time, and depending on its condition may also cost you some money. Honestly assess the car's condition, and then decide how much you want to spend on minor repairs, always remembering the liability involved with a private-party sale. Be sure to fix things well enough to avoid running into possible legal troubles farther down the road. Once the vehicle has been cleaned and repaired, you'll need to determine what it's worth. Most dealers will encourage the use of Kelley Blue Book to help access a starting point for the value of your vehicle. By looking at both the trade-in and suggested retail values listed by Kelley for your car, you can determine an asking price somewhere between them  The next step is to advertise and field phone calls. Since most private party vehicles are sold through local classifieds or used-car publications, start by placing ads in those but be prepared to advertise in multiple sources. Remember to calculate the costs involved. If the car doesn't sell right away, make sure you can afford to run ads for an extended period of time if necessary. After the ads have been placed, remember to set aside time to answer phone calls and meet interested parties for test drives. Prepare yourself for possible scheduling hassles like multiple buyers wanting to see the car at the same time, and for negotiating in general. How low a price will you really accept? How will you handle competing offers and other dilemmas? When you finally find a buyer and have the money in hand, the last step is to transfer the title and registration, and cancel your insurance on the vehicle.

Donating Your Car to Charity
Another way to get rid of your used car is to donate it to charity. An attractive alternative to many people just on principle, some also find the greatest advantage of donating a car is the ease with which it takes off their hands a low-value, hard-to-sell vehicle.