Damage to Your Vehicle

You are undoubtedly worried about your car, maybe even more than your own injuries. I have an attorney friend that had a client wake up from unconsciousness after days in the hospital. He looked up at his wife, then at his attorney, and then spoke his first words since the accident: “How’s my truck?”Here is some advice from phoenix auto accident attorneys on your vehicle claim.

While scheduling your medical care, the claim for damage to your car must also be started. If your car was towed from the scene of the accident, it was probably taken to a yard owned by the tow truck company. That yard will charge per day for storing the car. To get the car out of the yard will require payment of the towing bill, and any storage charges for the days the car was in the yard. There will also be a charge for towing the car from the yard to its new destination. Obviously, the faster the car is taken out of the yard, the lower the charges will be. If you have a place to put the car (like a body shop that will do the repairs or your back yard), it is a good idea to get the car out of the storage yard as soon as possible. If the claim is proceeding smoothly, the insurance company paying the claim may take care of this directly and you will never be out the money. However, even if you pay these expenses first, they should eventually be covered by the insurance company paying the claim, and you will be reimbursed.

Whether the car is in the storage yard, at the body shop, in your driveway, or even driveable, a property damage claim must be opened with the insurance company paying the claim. The company will assign an adjuster, and than adjuster will probably assign a property damage appraiser. The car damage estimates appraiser will need to schedule with you to see the car and make a preliminary determination about how much it may cost to fix your car, or whether the cost of repair will exceed the car’s value (this is what constitutes a “total loss”). This appraiser may give suggestions on body shops to repair the car, but you are free to take it where you wish, or have Uncle Joey do the repairs. The appraiser’s first estimate may not include all of the damage to the car, because some may be hidden until repairs begin. The body shop will notify the appraiser of any additional findings and the appraiser will approve payment of the additional repairs if he or she believes they are related to the accident. This is an area of potential dispute with the insurance company. Once the car is repaired, the insurance company should pay the body shop, and you get your car back.

If you have collision coverage, you may wish to have your own insurance company pay for the vehicle or the repairs, even if the accident was the other driver’s fault. Your company may get started faster because they do not have to make a determination of who caused the accident before starting. Even if you caused the accident they would have to pay the property damage claim. However, if your accident was the fault of the other driver, your company will get their money, and your deductible, back from the at-fault company through what is called a subrogation claim.

Even if your car is fully repaired, you may believe that it is worth less now than it was before the accident. If so, are you entitled to compensation to make up for that loss? The answer is “yes.” This is called a claim for “diminution of value.” It is logical to assume that if two identical cars are being sold on a lot, one has been in an accident and completely repaired, and one has never been hit, a consumer will not buy the repaired car unless the price is lowered. I have successfully made this claim for clients from time to time. However, some judges have denied this claim because they say the claim is too speculative–there is little way to know exactly how much less the car is worth–so they have not awarded for this part of the claim. The state of the law on this issue is still not perfectly clear.

If the property damage appraiser determines that the cost of repair to the car is greater than the value of the car, he or she will declare it a “totaled” vehicle. The insurance company will use a service to determine what to offer for the vehicle. This is supposed to be the “fair market value” of the car. I have found that both my clients and the insurance companies misinterpret what should be paid for the totaled car. The fair market value of a vehicle is basically what it would actually cost a consumer to buy the same or a very similar car to replace the damaged one. The insurance company often believes they just need to pay the amount that the report from their appraisal service indicates. That may be true, unless the figure their report produced is too low to actually buy a similar vehicle. On the other hand, my clients want the fair market value to be at least what they owe on the car, and any extra maintenance, repairs or improvements. This is also not always the fair market value. As we all know, cars lose value quickly, especially new ones. It is common to buy a car last year for $15,000, still owe $12,000 on it this year, and find that you can buy that exact car used for $10,000. Well, the fair market value is probably $10,000. So, how do you get an idea of your car’s market value? You can run Kelley Blue Book online (www.kbb.com), which is easy to use. Even better, is to use the newspaper classifieds and auto sales magazines. Find five to eight vehicles similar to yours in make, model, year, miles, features and quality. Take an average of the asking prices and reduce that number by about 10% (everyone asks a bit more than they expect to get). This should give you a general range. If the insurance company offer is far off this figure then you or they have missed something. If there is a disagreement that cannot be settled, that issue can be handled in court, usually along with the bodily injury claim.

While your vehicle is being repaired or replaced, are you entitled to a replacement vehicle–a rental? Yes you are. Most insurance companies, once they have accepted liability, will pay directly to the rental car company for your rental car (they will refer to this as “direct billing”). However, this simple issue gets quite tricky. For example, if your car is a Hummer, the insurance company will still try to put you in a Dodge Neon as your rental. It is often possible to get you switched to something more similar to what you were driving, and it is easier if you have a good reason–like your job is conducting military ground invasions and you really need the Hummer. Talk to the adjuster about your vehicle needs.

Another area that can create a gap in rental car coverage is rental car insurance. When you get a rental, they always ask whether you need to elect insurance on the rental. Whether your own insurance will or will not cover certain situations while you are in the rental car is controlled by your insurance policy and often your contract with the rental company. I cannot generically advise you whether or not you need to opt for the rental car insurance coverage. However, I can tell you that the insurance company paying for your accident claim will usually not agree to pay for the extra amount charged for such insurance.

Sometimes there is a delay between the accident and the time that the insurance company accepts responsibility for their insured’s actions. They have a right to do an investigation and determine who was at fault, and to what degree, before they start paying out money for anything. If your vehicle is either sitting in storage or in a body shop being repaired, how do you get a car while the insurance company completes its investigation? The most straightforward answer is that you probably put it on your credit card for now. The insurance company will usually reimburse you once their investigation is complete. There are a limited number of companies that will provide a rental car and place a lien on the case for payment once the property damage claim is paid, but their services are limited and very expensive. Usually the insurance will accept the claim quickly enough that this gap is not significant.

If you do not use a rental car while yours is being repaired or replaced, the insurance company should still compensate you for the time you could not use your car. This is called a loss of use claim. As with many aspects of an auto accident claim, there is no formula or law that says exactly what the reasonable amount for loss of use is. It varies according to the facts of your case. However, the general cost of a replacement vehicle, had you used one, is a reasonable basis for a loss of use claim as an indicator of the daily economic value of the use of your car. If your own company is paying for the repairs, it is not responsible for rental unless you have purchased rental coverage. It is also not responsible for any loss of use claim. You will need to make these claims separately against the at-fault company even if your company paid for the vehicle replacement or repairs.

In summary, the claim for damage to your car, the property damage claim, consists of compensation to you for the repair or replacement of the car, loss of use of the car and/or rental costs, and a diminution of value claim for the decreased value of the car. Each of these claims is a point of potential disagreement with the insurance company. However, the distance between the insurance company offers and my client’s expectations are usually resolvable without full court proceedings. Hopefully, that will also be your experience. I do not charge my clients for the work I do on property damage claims.