WHAT ABOUT MY CAR?
What you should know before settling your property damage claim.
- Who pays for my car damage?
If you are involved in an accident and the other driver is at fault, usually the other driver’s insurance company pays for your car damage. The company will assign an adjuster to inspect your car and authorize payment to get it fixed.
If you cannot reach agreement with the adjuster and you have collision coverage, you can request your insurance company to pay for the damage, less your deductible. You can then recover your deductible from the person who collided with you.
- What if my car is totalled?
If your car is obviously totalled, you may not be given a rental car at all. If the car might be repairable, the adjuster will usually authorize a rental until the insurance company decides to total the car. If it is totalled, the adjuster will request you return the rental car when the insurance company makes its first offer.
If your car is totalled, you are entitled to receive the fair market value of the car. The Blue Book value may not be the actual market value. The insurance company usually offers Blue Book value, which may be significantly less than the fair market value.
To get a better estimate of fair market value, check car ads in newspapers and visit used car lots to ask dealers for value quotes. A quote signed by the salesman on the back of a business card will do. With these quotes, you will obtain a range of higher values as an alternative to the adjuster’s low bid.
- What about salvage?
If your car is totalled, you may keep the car by paying the salvage value to the insurance company. Your settlement check will then be reduced by the car’s salvage value. This value might be a percentage of the car’s value or an actual bid from a salvage lot.
- How do I get a rental car?
While your car is being repaired you should be able to obtain a rental car at the expense of the other insurance company. The insurance company will normally authorize a rental for a certain period, and any extension must also be authorized by the adjuster. If you obtain a rental car without prior authorization, the insurance company might not agree to pay for it. You can usually keep the rental until the car is repaired.
- What about storage and the towbill?
The insurance company should pay the storage and towbill fees. You should be aware that some storage lots, like service stations and body shops, charge fees ranging from $10 to $20 a day for storage. If your car is an older vehicle, this storage fee can rapidly eat away at your car’s value. The best advice is to move the car as soon as possible.
- What about my car loan?
If your car is totalled and money is still owed on your car, you will need to pay off the loan. The property settlement will usually be used to pay this loan. If the settlement is less than the loan balance, then you will need to pay, or renegotiate, the balance. The insurance company is buying your car and will insist upon receiving the title to the vehicle, and the lien holder will not release the title unless it gets paid.
- What if the adjuster won’t total the car?
Normally, an adjuster will total a car if its repair cost exceeds 70% of its value. Generally, you do not have a legal right to insist upon the car being totalled if it is actually repairable, even though you feel the car cannot be returned to its former condition. If it is a newer car, you might be entitled to additional damages for depreciation of value. Similarly, you do not have the legal right to insist on repair when the repair cost exceeds the fair market value of the car.