KNOW YOUR RIGHTS – KNOW YOUR OPTIONS
Over the last 26 years, I have had thousands of clients come to me for help following a car accident. Our first conversation usually starts something like this:
Client: I was in a wreck yesterday. The other guy ran a red light and hit me. I am injured and my car needs to be fixed, so what do I need to do?
Me: Bradley Law Group will represent you on your claim for personal injuries. We will make sure you get the treatment that you need, and we will maximize your settlement.
Client: What about the claim for damage to my car?
Me: You don’t want to pay me to handle your property damage claim. You can most likely get the same results yourself.
When you hire a law firm, you are expecting better results than you could get on your own. Right? Why else would you want to hire a law firm? Personal injury claims are complex and the damages are very subjective. An experienced law firm can make a BIG difference in how much you recover for your personal injuries. By contrast, property damage claims are fairly simple and the damages are objective. There is not a lot of “wiggle room”.
When I explain to clients that they can handle their own property damage claim, I make it a point to explain the basics and answer questions. Here are some of the most common questions that I get.
QUESTION: WHAT IS THE DIFFERENCE BETWEEN PERSONAL INJURY AND PROPERTY DAMAGE?
Answer: “Property damage” refers to damage done to your vehicle and its contents. “Personal Injury” refers to your bodily injuries, medical expenses, prescription expenses, permanent scarring, disability, etc.
QUESTION: WHOSE INSURANCE COMPANY DO I NEED TO CALL TO GET MY CAR FIXED?
Answer: This depends on the facts of your case:
If the other driver was 100% at-fault, then you have a choice. You can contact the other driver’s insurance company and they should work with you to get your car inspected and repaired. If the other driver’s insurance company is dragging its feet, then you also have the option of contacting your own auto insurance company. If you have collision coverage on your policy, then your car insurance company will work with you to get your car inspected and repaired.
If your insurance company pays for the repairs, you may have a DEDUCTIBLE that you will be responsible for. This is typically about $500. If your insurance company pays for your repairs, then they have the option to pursue the other driver’s insurance company to get their money back. If they succeed, they will send you a reimbursement for your deductible. I always advise my clients in this situation to try working with the other driver’s insurance company first. If that isn’t working, then look to your own insurance company.
If you are at-fault for causing the accident, you need to contact your own insurance company. The other vehicle’s insurance company will not have any responsibility to you. If you are partially at-fault for causing the accident, you can try contacting the other driver’s insurance company, but they may deny your claim based on your “contributory negligence” in causing the accident. If this happens, contact your own insurance company.
QUESTION: HOW DO I GET MY CAR FIXED? DO I GET A RENTAL CAR?
Answer: If the other driver was 100% responsible for causing the accident, then their insurance company should set up a damage appraisal. If your car can be driven safely, they may ask you to take it to one of their locations. If your car cannot be driven, they should send someone to your car to complete the damage appraisal. If the amount of damage to your car does not exceed 75% of the value of the vehicle (just before the wreck) then the insurance company should pay “reasonable value” to have your car repaired.
The insurance company should provide you with a rental vehicle once they have accepted responsibility for the crash. You will generally be allowed to retain the rental until your car is repaired. However, if you or your auto repair garage drag your feet, the insurance company will stop paying for your rental.
Remember, you have the right to pick which auto repair garage will fix your car, but the insurance company is only responsible to pay for the “reasonable” expenses involved in the repair. If your garage charges more than others, you will be responsible for the difference. I always tell my clients to have the garage and the insurance adjuster speak BEFORE REPAIRS ARE STARTED to make sure that you don’t get stuck with a bill at the end of the repairs!
QUESTION: WHAT HAPPENS IF MY CAR IS A TOTAL LOSS?
Answer: If the cost of the repairs will exceed 75% of the value of your car, then it will be deemed a “total loss”. If this happens, the insurance company will not repair your vehicle. Instead, they will determine the value of your vehicle just before it was hit. Once you have agreed on the vehicle’s value (be sure to look at Kelly Blue Book and NADA guides) the insurance company will then pay out that sum of money in exchange for the title to your car.
If you have a lien against your title (if you financed your purchase), then your bank or lender will get paid before you do. If the payment from insurance is larger than your lien amount, you will get the difference paid to you. If your lien is greater than the amount of the insurance payment, this means that you were “upside down” before the crash. Your car was not worth the amount that was owed on the loan. Sadly, this happens all the time as cars often depreciate faster than loan balances are paid down.
When you are “upside down” your lender will look to you for payment on any loan balance not paid by the insurance company. If this happens, I always advise my clients to check for “GAP Insurance”. If you financed your car purchase, there is a good chance that you have GAP insurance. If so, GAP insurance will pay off the remainder of your loan balance after the other driver’s insurance company has made their payment. Contact your lender and the car dealership to see if you purchased GAP insurance when you bought the car.
If you happen to be very handy with car repairs, you might elect to retain your vehicle even though it has been deemed a “total loss.” If you choose to do this, the insurance company will determine the salvage value of the vehicle. This amount will be deducted from the amount the insurance company pays you. For example, if your car was worth $10,000 and you did not have a car loan, you can sign over the title and receive $10,000 from the insurance company. If the salvage value of your vehicle is $2,000, then you can also elect to retain title to your car and receive a payment of $8,000. When you add the value of the salvage vehicle and the payment from insurance, you still get $10,000. If you choose this option, you will have a “salvage” designation on your car’s title.
The at-fault insurance company should provide you with a rental car until your total loss claim is completed. However, if you do not accept their offer in a timely manner, the insurance company will stop paying for your rental car. You can’t drag out the claim just to keep the rental car. If you can’t agree on terms to settle the total loss claim, then you may wish to consult with an attorney.
QUESTION: WHAT IF MY CAR IS WORTH LESS AFTER REPAIRS ARE COMPLETED?
Answer: If your car is worth less after the repairs are completed, you may have a claim for “diminished value.” The measure of a diminished value is the difference of the car’s value before the crash versus after the repairs are completed. For example, let’s say that you have a 2023 Ford F-150. This truck was worth $40,000 right before the wreck. After the wreck, the at-fault insurance company pays for your repairs and the truck looks fine. However, due to the fact that the vehicle was damaged and repaired, now it’s only worth $37,000. If this is the case, you have suffered a diminished value of $3,000. ($40,000 – $37,000 = $3,000)
If a client wants to make a claim for diminished value, I always advise them to go to a dealership and ask for an appraisal showing the “before” and “after” values. The insurance company will not just take your word for how much a diminished value might be. A professional dealer estimate will help you establish your damages. However, the insurance company will still argue with you as to the amount of the loss. The better you can document the diminished value, the stronger your claim will be.
As a general rule, you will have better luck pursuing a diminished value claim on newer and more expensive cars. If you are arguing that repairs to a 2023 Porsche resulted in diminished value, the insurance company will be hard pressed to disagree with you. However, if you are arguing that repairs on your 1979 Ford Pinto Wagon resulted in diminished value, that’s going to be a tough sell.
CLOSING WORDS OF WISDOM
Property damage claims are typically not a big deal for our clients. However, when our clients run into problems, we are always available to answer questions. Remember the following:
- Take lots of photos of your damage, don’t delay in reporting your property damage to the at-fault insurance company.
- When the claim is opened, act in a timely manner to get the damage repaired.
- If you think you have suffered a diminished value on account of the damage to your car, discuss that with the adjuster as soon as possible.
- If your car is a total loss, then make sure to look for GAP insurance.
- If you run into problems, consult an attorney.
****All cases are unique and are evaluated independently. Past results are not a guarantee of future performance. This post does not form an attorney client relationship with the reader nor is it intended as legal advice. State laws are different regarding insurance coverages and their applicability. Bradley Law Group represents people involved in accidents in North Carolina.