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 When you have been involved in an automobile accident, there are usually 2 issues. First is the bodily injury claim, which involves claims for injuries sustained to your body. Second is the property damage claim, which consists of getting paid for damage to your vehicle. Property damage claims may be handled in several different ways. These are the answers to some general questions you might have.
WHO’S FAULT WAS THE ACCIDENT?
If the accident is your fault, the claim must  be resolved with your insurance company. Most likely, you will have to pay a deductible. The amount of the deductible will be stated in your insurance policy.
If the accident is someone else’s fault, the claim may be handled by your insurance company (with you paying the deductible) or by the at-fault party’s insurance company (liability carrier). It is the responsibility of the liability carrier to cover your property damage since their insured caused the accident. However, if the liability carrier is delaying the process, you may choose to have your insurance company cover the damage to your vehicle.
IS MY CAR TOTALED OR CAN IT BE FIXED?
An insurance company will either pay for your vehicle to be fixed or will declare it a "total loss." Generally, the insurance company, whether it is your insurance company or the liability carrier, will pay the lesser of two amounts: (a) the cost of repairing your vehicle or (b) the fair market value of your vehicle if it is a "total loss". If the cost of the repairs exceeds 75% of the fair market value of your vehicle, then your vehicle would be considered a "total loss". With a "total loss" vehicle, there is a secondary issue of the salvage value of the wrecked vehicle. Even a completely totaled vehicle will have some salvage value. If you keep the total loss vehicle, the insurance company will deduct the "salvage value" from the fair market value in payment to you. Generally the "salvage value" will be anywhere from 20% to 30% of the fair market value of the vehicle. However, if the insurance company takes possession of the totaled vehicle, you are entitled to the whole fair market of the vehicle plus sales tax.
CAN I GET PAID SINCE MY CAR IS WORTH LESS BECAUSE OF THE WRECK?
It is generally accepted that, all other factors being equal, a vehicle that has been in an accident is worth less than a vehicle which has not been in an accident. The term used for this difference is "diminished value." You are entitled to be compensated for this difference in value to your vehicle. If your vehicle is deemed a total loss, you do not have a claim for diminished value, but you do have such a claim if your car is being repaired. There are several factors to consider when determining if you have a viable diminished value claim. Some of these factors are the year, make and model of your vehicle, the amount of property damage and the actual cash value of your vehicle on the date of the loss, before the wreck. Different insurance companies use different formulas to determine what, if anything, is owed for diminished value. Unfortunately, most people do not know how to calculate the diminished value for their particular vehicle and probably do not get a fair offer from the insurance company. If necessary, our firm has access to an automotive industry professional, who can provide an opinion as to the diminished value of your vehicle.
WHAT IF I STILL OWE MONEY FOR MY CAR?
Insurance companies are only required to pay the fair market value of your vehicle. They are not required to payoff any loans which you may have on your vehicle. Unfortunately, sometimes people are "top-heavy" on their car notes and owe more than their cars are worth. If your vehicle is a total loss, the lien holder (bank through which you got your car loan) to your vehicle’s title will receive payment first. Then, if any more money is to be paid out to equal the fair market value of your vehicle, you will receive a check. Any insurance company paying a total loss claim and keeping the salvage will require that the vehicle’s title be surrendered to them.
You may always negotiate with your lien holder to see if they will accept the insurance company’s payment as "payment in full" for the outstanding loan. Remember, the bank is not required to negotiate this amount with you. Some people may have "gap coverage insurance," which will payoff car notes in the event a vehicle is rendered a total loss in an accident. If you are a good customer, the lien holder may work with you in securing another vehicle and rolling the outstanding balance of your current loan into a new loan.
HOW MUCH IS MY CAR WORTH?
It is important to educate yourself of the fair market value of your vehicle. You can do this in several ways:
1. Look through the Sunday newspaper and "Auto-Trader"-type publications.
2. Check with local car dealers.
3. Research on the internet. Check these sites:
http://kbb.com and http://nadaguides.com. Look up the Make, Model and Year of your vehicle. Generally, you will get more than one value. A good practice is to average all the values to determine the fair market value of your vehicle.
When comparing vehicle values, you need to find vehicles similar to yours in make, model, condition, mileage and options. After checking these sources, you will have a good idea of the true value of your vehicle and be in a better position to negotiate with the insurance company.
WHAT IF I NEED A RENTAL CAR?
If you carry rental coverage on your insurance policy, it is generally a limited amount. Typically, your insurance carrier will allow you a specific per day allowance for rental up to a maximum amount. If your vehicle is not safe to drive following an accident, the liability carrier is required to provide you with a rental vehicle until one of two events occur: (a) the repairs to your vehicle have been concluded or (b) your vehicle is determined to be a total loss. Usually, the liability carrier will allow a few extra days of rental for necessary paperwork to be completed for a total loss. You should ask the body shop if your vehicle is driveable or not.
HOW LONG CAN I LEAVE MY TOTALED VEHICLE AT THE TOW YARD?
You have a duty to "mitigate" your damages. That means that you should not incur unnecessary expenses or unreasonably prolong the resolution of your property damage claim. If your vehicle was towed to a wrecker yard or repair shop, it is probably incurring daily storage fees. The insurance company has a "reasonable" amount of time to investigate a claim against them. In the event, the liability carrier does not accept liability within a few days of the auto accident, you should remove your damaged vehicle from the tow yard.
If you have towing coverage with your insurance carrier, you can submit the towing bill to your insurance carrier. The liability insurance carrier is responsible for towing charges and "reasonable" storage fees. "Reasonable" would generally include storage fees until the vehicle is repaired or deemed a total loss. If you vehicle is determined to be a total loss, permission should be given to the appropriate insurance carrier to allow your vehicle to be moved to a "storage-free" facility, such as SADYSCO or VeraStar. Make sure you remove all personal items from your vehicle before it is moved.
WHAT DOCUMENTATION DO I NEED TO SETTLE MY PROPERTY DAMAGE CLAIM?
You are undoubtably familiar with the old adage, "a picture is worth a thousand words." This is definitely the case when presenting a property damage claim at trial. Your description of the damage sustained to your vehicle should be very precise. No description will have the impact of a photograph. ALWAYS take photographs and/or a video of all damage sustained to your vehicle. While it is important to photograph the obvious damage, such as crushed panels, broken windows, crumpled bumpers, airbag deployment, etc., it is also important to document the less obvious damage such as alignment deviation in door frames, trunks and hoods. Following a significant impact, you may find that it is difficult to open or close doors, trunks or hoods.
WE ARE HERE TO HELP
If you are unable to reach a reasonable resolution to your property damage claim or have a question regarding your specific property damage claim, McMahan Law Firm will be glad to assist you. If you were injured in the accident, and our firm handles your personal injury claim, we will assist you in the resolving your property damage claim at a reduced fee. If we are able to resolve the property damage claim through negotiations, rather than through litigation, we will not charge any additional fee.
Our firm handles personal injury claims arising from automobile and work-related accidents. We also handle medical negligence, nursing home abuse and Social Security Disability cases. Please feel free to contact us if we can assist you in any of these matters.
This information is provided for informational purposes only. You should contact and consult an attorney for specific legal advice.
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