Most of our clients handle their property damage and losses without our assistance. However, at the Law Office of D.J. Banovitz, as a courtesy to our clients we never charge a fee for helping settle property damage claims. Property damage claims are not limited to the damage to your car but to anything in the car that was damaged or ruined. The insurance companies in nearly every case try to take advantage and pay less than what they owe or what is fair. This information below will help guide you through this process and hopefully minimize your frustration.
RENTAL CARS AND TRUCKS
The accident wasn’t your fault, the other drive was ticketed, and yet the wrongdoer’s insurer is dragging their heels and refusing to accept liability until they finish their investigation. The result – they won’t pay for a rental car. We understand this can be maddening. You have two options at this point, get a rental car under your own policy or pay out of pocket and get reimbursed by the wrongdoer’s insurer later.
You are entitled to rent and get reimbursement for a vehicle comparable to the one that was damaged or needs replacement. Likewise, the insurance company should provide something similar to the vehicle that was damaged. If you were driving an SUV or a pickup you may rent or the insurance company should furnish an SUV or a truck. It is not acceptable or reasonable to put you into a compact car that doesn’t suit your needs.
You can keep the rental until your vehicle is repaired or until you get payment for your total loss. You have an obligation to ‘mitigate your damages’. That is, you must do what you can to get your car repaired or settle on the totaled value as soon as possible. Sometimes circumstances occur that create delays. In that case the insurer usually agrees to reasonably extend your time in the rental.
TOTALED CARS AND TRUCKS
Your car or truck is “totaled”. This happens in two circumstances. The first is when the cost to repair is close to or greater than the fair market value of the car. Sometimes this can occur even without extensive damage such as when your car is older. The second instance is when your car or truck simply can’t be repaired safely.
In the first instance, you may decide to buy back your car for salvage value and continue driving the car. Folks with older reliable cars with cosmetic damage may decide to go that route. You will get to keep the difference between the fair market value and salvage value.
How is fair market value determined?
This is a negotiation that you must be prepared for. When properly prepared, you can prevent the insurance company from taking advantage of you. Fair market value is determined by the value of your pre-accident vehicle in the area where you live. The insurance company may try to tell you your vehicle is worth less than one in similar condition, year and mileage, by showing you one from a different state. If they play that game tell them to go purchase the car just like yours from (insert state here) and have it delivered to you. They will decline every time. There are several ways to get at fair value and the internet is a great resource. You can check autotrader.com and Kelley Blue Book (kbb.com) or check out the NADA consumer guides available at most bookstores or from a helpful car dealership. Your starting point for negotiations is the full retail value of your vehicle. If you purchased your car at a dealership or would only replace it with one bought from a dealership than retail is what the insurance company should pay. They may try to get you to accept private party value. This may or may not be acceptable depending on your particular circumstances. Always push for retail. Be advised that trade in value is the same as wholesale and this is never appropriate.
What if I owe more than my vehicle is worth?
You are either entitled to the cost of getting your car fixed or fair market value. You are not entitled to replacement value. This might seem unfair but that is the law in Colorado and most states. If you owe more than your car is worth, hopefully you purchased GAP insurance. GAP will cover the difference between fair market value and what is owed. For example, your car has a $7,000 fair market value and you still owe $10,000. Gap will pay the $3,000 difference. If you don’t have GAP you will owe the finance company the difference. You might be able to get a car dealership to help you finance this “negative equity” into another car deal.
You can have your vehicle repaired where you choose. You do not have to use the other driver’s ‘approved’ repair shop. These shops often work at a discount for the insurance company which is how they achieve their ‘approved’ status. This isn’t necessarily bad but you should do some homework to make sure it’s a decent shop. Check out the shop with car dealerships. If retailers refer to the shop then that is a good indicator that they do quality repairs. What if the repair shop wants to utilize used parts? They can do this as long as they are the same ‘like and kind’. This means they must be the same or similar quality to what you had in your car before. You should ask what used parts they might use in the repair, then make certain that they are at least as good as the original parts. You do not need to pick the shop with the lowest estimate. However, the shop you choose should have an estimate that is more or less in line with others. If repairs exceed the estimate or once your vehicle is taken apart the damage is more extensive than thought, the repair shop will deal directly with the insurance company to get approval.
Get your car, totaled or not, out of storage as soon as possible. Storage fees can be steep and you can’t let your vehicle sit waiting for the wrongdoer’s insurer to assume responsibility. Find out if the driver’s insurer or a repair shop will allow the vehicle to be stored without additional storage charges until arrangements to repair or total the vehicle have been made. As stated above, you have a duty to mitigate your damages and allowing your vehicle to sit and accumulate huge storage fees is inappropriate.
OTHER PROPERTY DAMAGE
Take pictures of your damaged personal items in the car. Contact the adjuster(s) and advise them that you have done so and offer to have them come and inspect the damaged personal items at once. Get the name and contact information of the tow truck driver or person(s) at the storage yard to witness the extent of the damaged property. Remove your valuables from the car so they don’t get stolen. The insurance companies will not accept responsibility for criminal acts. Get estimates to repair or replace the damaged items or produce the original receipts. Be a tough negotiator and insist on full compensation for your property damages. You have the ability to decline their offer and make a claim for property damage in your injury case.