Most cars involved in an auto collision are damaged. Some cars are totaled, and some are repairable. In either case, it is important to know your rights so you are not cheated or taken advantage of by the insurance industry.
1) WHICH INSURANCE COMPANY SHOULD I USE?
If you are in an accident and your car has had substantial damage, you have the problem of dealing with insurance companies on either repairing your car or, in the worst-case scenario, paying for its value as a totaled car. If the accident was the fault of another driver, then you have several possible solutions to this dilemma.
Option 1: Collision Coverage
If you have collision coverage with your own insurance company, you can ask them to repair your car or pay for its value if it is totaled. Typically, if you are going through your own insurance company, you have to pay the “deductible” on your collision coverage. If you use your insurance company, you recover this amount from the at-fault driver’s insurance. Sometimes, your own insurance company will collect the deductible from the at-fault driver’s insurance.
Option 2: The At-Fault’s Insurer Pays
The other option is to have the at-fault driver’s insurance pay to either repair or replace your vehicle. The advantage of this is that you do not have to deal with the deductible issue. By having the at-fault driver’s insurance pay for your car damage, you do not have to present a claim to your own company.
Note: If you did not have collision coverage on your car, your only option is to seek repair or replacement from the at-fault driver’s policy.
2) WILL MY CAR BE REPAIRED OR TOTALED?
In some cases, whether your car is repairable or is totaled becomes a substantial problem. Most insurance companies will want to consider the car “totaled” if the repair cost approaches the value of the car. For instance, it would not make sense to pay $8,000 to repair a car that is only worth $6,000. However, many cases are not that simple.
There are two factors that go into deciding if a car is going to be considered “totaled” or repairable:
The value of the car
The repair costs
Both of these values can be subject to negotiation and dispute.
For example, an insurance company may want to assign a low value to your car so they can total it, rather than repair it. The reason they may do this is a body shop might discover hidden damage during the repair. Hidden damage will result in higher costs as supplemental damage estimates are added to the total repair costs.
Even if the car isn’t totaled, it’s not uncommon for the insurance company’s repair estimate to be too low. If you feel this is the case, you don’t have to accept the insurance company’s repair estimate. You’re entitled to visit other mechanics and obtain your own estimate. However, as in any negotiation process, the insurance company may require you to fulfill certain requirements, such as obtaining more than one alternative estimate.
3) WHAT IS THE VALUE OF MY TOTALED CAR?
Insurance companies are required to pay for the fair market value of your totaled car. This is the amount you could have sold your car for on the used car market the day before the accident.
Keep in mind that the value the insurance company assigns to your car may not necessarily be an accurate estimate of its fair market value. Insurance companies hire third-party computer vendors to calculate the value of cars. These computer vendors do not always take into account all of the factors that add value to cars. This can sometimes result in an underestimate of fair market value.
If you think the insurance company’s offer is too low, you can try one or both of the following.
Option 1: Research
You should fight the insurance company’s estimate of the fair market value if you believe their offer is too low. To determine if the insurance company’s estimate is too low, you can research comparable vehicles in the area. You can also check online resources for cars similar to yours that are at the top end of the price range. You can go to a local used car lot, or a new car lot that sells used cars, and get them to give you a written value of your car prior to the accident in the local market. This information will give you a range of values that will help you determine what the fair market value is. All of this information should be provided to the claims adjuster to support any counter offers you make.
Option 2: Consult the At-Fault Insurer
Depending on the circumstances, you may want to get an offer from both the at-fault driver’s insurance company and your insurance company. Insurance companies use different evaluation services that can result in competing offers. We routinely see insurance companies increase their offers for totaled vehicles after they are presented with comparable cars that are available for sale on the used car market at a higher price than they are offering.
4) WHAT IF I CAN NOT REACH A SETTLEMENT?
Oregon law allows someone to agree to disagree with the insurance company’s valuation of your totaled car. Under the law, you can accept what the insurance company is offering for your car but continue the fight over what the value of your vehicle really was. The insurance company will pay you the amount they are offering and you can fight them over the difference in court.
If you wish to do this, you need to be careful not to sign a complete release. We strongly recommend talking with a personal injury attorney before attempting to do this on your own.
5) CAN I GET A RENTAL CAR?
When you are without the use of your car, you have a claim for the reasonable value of the lost use of your vehicle. The lost use-value is typically the rental value of a comparable vehicle. Therefore, when your car is being repaired, you may be entitled to a rental car paid for by the at-fault driver’s insurance company.
At-fault insurance companies will usually pay for a rental car until your car is repaired, as long as it is repaired within a reasonable period of time. Your own insurance company will only pay for a rental car if you have paid extra for that coverage on your policy.
If your car is totaled, you may be entitled to a rental car until such time that the responsible insurance company makes you a reasonable offer for the value of your totaled car. At the point that they make you a reasonable offer, they are no longer obligated to pay for a rental car.
What if I don’t want the rental car?
Some people opt not to get a rental car, but to make a claim for the value of the lost use of the vehicle. If you have another car available that you could use without cost, it may make more sense to simply pocket the amount paid for the days you are without the damaged car.
When in Doubt, Talk to An Attorney
As you can see, something as simple as getting your car repaired or getting your totaled car paid for can be a very complicated insurance issue. Our attorneys often guide people through the process if they wish to do it themselves. There is no charge to call and ask us questions about how to deal with your damaged or totaled car.