Property Damage Resolution After an Automobile Accident

You have just been involved in an automobile accident, and your car is all banged up. Several concerns jump out immediately.

• Who is going to pay for the repair? Can it be repaired? What if it can't be repaired?

• Where am I allowed to have it repaired? Can I use my dealer to do that?

• Will the repair parts be new?

• I just spent a bundle on fix-ups, will this be included if it can't be repaired?

• What about a rental car while I'm waiting for the repairs?

This article will answer all of these questions for you. Please read on.

I know this is aggravating. Be patient, be persistent, and things will work out.

Situation #1: Other guy's fault, he has insurance, car can be repaired.

The other guy's insurance will repair your car, once they accept that the other guy was responsible for the accident. This is important to understand. The insurance company is allowed to take a reasonable time, and to investigate the accident, no matter how clear-cut it may be to you, to determine both "coverage" issues (that they do insure the vehicle and the driver who caused the accident) and "liability" issues. Often, coverage issues can present problems, as for instance, in the case of an "excluded" driver using the car, or its use by someone not authorized by the owner. Liability decisions can sometimes be delayed because the insurer wants to talk to the driver to find out their version of what happened.

VERY IMPORTANT: If the insurance company is stalling or delaying accepting responsibility for any reason, it is your job to make sure the car is removed from a storage lot if it was taken there, so it does not build up storage charges. This means you will have to pay to get your car out of the lot, which includes the towing bill and the storage charges to date. You cannot sit back day after day, while $20 - $25 per day charges accrue, and say they're at fault, it's their problem. You will get the money back, once the insurer accepts responsibility. So keep your receipt! My advice is to wait no longer than 3 or 4 days to remove your car.

Once you get to that stage where the insurance company agrees to repair your car, they will normally send someone out to appraise the damage. If this takes place early on, they will send their appraiser to the storage lot, and then they will require that you authorize them to move it to a repair facility. You can specify where it should be repaired, including your dealership. If you have already removed the vehicle, you must advise the insurer where the car is located (your home?) so they can appraise it.

If the cost to repair the vehicle, according to the insurance appraiser, is less than what the repair shop says it will take to repair, don't worry. The repair shop will call the appraiser, and they will resolve the discrepancy.

During the period your car is being repaired, you have the right to a replacement rental car. You have this right immediately after the accident if your car is not driveable, or if it is unsafe to drive. The insurer will reimburse you for the rental, and in some cases they will arrange for what is referred to as a "direct bill", such that they contact the rental car company and advise that they'll pay for the rental directly. Even in that situation, you will need to show the rental car company a charge card. Your card will not be billed in a direct rental situation. If a direct rental isn't arranged, you are allowed minimum industry charges, typically from $18.00 to $25.00 per day.

If you are under the age of 25, many rental car companies will not rent a car to you, regardless of who is paying for it. You should thus arrange to have someone 25 or older rent it for you, and make sure you are on the rental car contract as an additional driver.

VERY IMPORTANT: If you have automobile insurance, DO NOT agree to pay for the physical damage on the rental car contract. You should sign the "waiver", which indicates you DO NOT WANT to pay the $6.00 - $9.00 per day charge to protect you in the event something happens to the rental car. Your insurance will cover you in this event. Now, if you don't have insurance, you will have to pay for that daily charge, and the at fault party's insurance will not reimburse you. Sounds unfair, but the at fault party is not responsible to "improve" your situation by giving you insurance you did not have.

Repairs can be made with other than completely new parts, so long as they are mechanically sound and aesthetically acceptable.

If the insurer doesn't initially agree to repair your car, due to any number of possible reasons, you can have it fixed yourself. If you have automobile insurance, you will most certainly have to pay the deductible. Thereafter, your insurance company will pursue the at fault party's insurance company for reimbursement of the money they paid to the repair shop, and they will also look to recover your deductible and return that money to you.

Situation #2: other guy's fault, he doesn't have insurance, car can be repaired.

If you have insurance, you can use the Uninsured Motorist provisions of your policy to have your insurance company repair your car, and you DO NOT pay any deductible. The same things discussed above for all issues apply here, with the one exception being that now your insurance company is paying for everything. Do not be concerned about your insurance premium being increased. An insurer CANNOT increase your premium because you made a claim under the Uninsured Motorist benefits. They also CANNOT cancel your coverage for this reason.

VERY IMPORTANT: Remember to get your car out of storage if it isn't otherwise arranged with the insurance company within 3 - 4 days.

Situation #3: other guy's fault, he has insurance, car cannot be repaired.

If the car is in a storage lot, go there and get your personal belongings out. If the insurance company is delaying, as discussed above, you move the car (have it towed), pay the initial towing and storage charges, and pay for the tow to your house (or where you'll keep it). Keep receipts and you'll be reimbursed once the insurance accepts responsibility.

Repairing a vehicle must make financial sense. If the value of a car is very low, and there is extensive damage, it doesn't make sense to repair it. The car is then called a "total loss". The industry standard is to declare a car a total loss if the cost of the repairs equals or exceeds 70 -80% of the car's value. Assume that the car has a value (as determined again by industry standards, using sources such as the Kelly Blue Book or the N.A.D.A. appraisal guides) of $1,000.00. If the repair cost is $700.00, it is likely the insurer will declare the car a total loss.

In this event, you will be presented with two choices.

#1 - Give the insurance company the car, sign over the title to them, and they will pay you the value (see above), plus the cost of tags, title and taxes; or

#2 - You keep the car, and they pay you the value, minus the "salvage" value of the car. The salvage value is the amount that the car can bring for its scrap and parts. Typically, this amount is about 10% of the car's total value.

If, prior to the accident, you recently spent some money repairing your car, you should show the receipt to the insurance company. Some of the repairs you made may allow the "value" of your car to be increased. Routine maintenance costs will not be added, even if they occurred one day before the accident. New tires will be reimbursed, but not necessarily at 100% of the cost of what you paid. The concept is similar to trying to sell your car in a normal case. Would those repairs or improvements add to the car's value such that a buyer would pay more? If the answer is no, then the insurance company probably won't pay more either.

Rental car issues: You will be entitled to a rental car until you are paid for your car, plus, maybe, one or two more days. This means that if your car is destroyed, you need to be out looking for another car soon. The insurance will not let you keep a rental car until you decide you want to get another car.

Situation #4, same as #3, but the at fault party has no insurance.

Your insurance pays for the total loss. You pay no deductible. Your insurance can't raise your rates. Rental car concerns are the same as in #3.

Good luck to you. Keep your cool. No matter what happened, appreciate that the car is just that, a car, and you've probably had others, and you will have others in the future.