Motor vehicle accidents typically involve two types of damages: Personal Injury, and Property Damage. Property damage claims typically involve one or both cars, but also encompass personal property such as computers, child seats, eyeglasses, and other property that can get damaged in a crash. This article will attempt to provide some guidance on how to navigate such claims.
In every accident, the first issue is fault. The at-fault driver will be responsible for all damages, including both personal and property damage losses. Generally, insurance companies will assign different adjusters to handle property losses than those that handle personal injuries. Even if you are represented by an attorney for your injuries, you may still be able to directly communicate with the property damage adjuster.
If you were not at fault, the other driver’s insurance should pay for the lower of either a) the repair amount, or b) the actual cash value of your car. You aren’t automatically entited to a new car, or even a replacement of the same make, model, and mileage of the vehicle you were driving. Rather, the proper measure of damages is the amount that you would have received if you sold your vehicle in an arms-length transaction before it was damaged in the accident.
In today’s world, many drivers owe more money on their cars than the car is worth. This is referred to as being “upside down” in the loan to value equation. When your car is declared a total loss, the actual cash value may not be enough to pay the lender’s note off. In those circumstances, you will be responsible for the difference. My clients have taken out new loans, worked out payment plans with lenders, or made other arrangements.
Some drivers carry a type of insurance called “Gap Insurance”. Gap insurance is typically sold by dealerships, and in some cases is required by lenders making loans at or greater than the value of a vehicle. If you have gap insurance, it will pay the difference between the Actual Cash Value of your vehicle and the amount you owe. Gap insurance policies contain very specific requirements as to how and when claims must be made, so if you find yourself in that position, carefully review your contract to determine the next steps.
It is also important to note that some insurance policies will not cover all of your damages. For instance, in Colorado, the minimum amount of property damage required by the state is only $15,000. If your care is worth more than that, you may be required to use your own comprehensive coverage to pay the rest of the damage or value of your car.
Fortunately, most cars damaged in crashes are not totaled and will be repaired. It is important to note that the insurance company cannot make you go to a “preferred” shop. It is your choice as to where you get your vehicle repaired. You may want to get multiple estimates and compare different facilities.
Another issue that frequently comes up is whether the insurance company must use original parts, called OEM parts, or may use aftermarket parts. Generally, the cost of non-OEM parts is less than OEM, even though many of the parts are made in the same exact factory. Since the legal standard for the obligation of the insurance company is the “reasonable value” of replacement parts, if you insist upon OEM parts for your car repairs, you may be required to pay for the difference.
Finally, many of my clients have personal property damaged when they are involved in crashes. While the at-fault insurance company will pay for these losses, you will be responsible for proving the value of your items. This may require receipts or even photographs of property before it was destroyed. Two exceptions are child car-seats and motorcycle helmets. Once involved in a crash, even without visual damage, most experts suggest replacement of child seats and helmets. Don’t forget to discuss these items with your adjuster.
Most of the time property damage claims get resolved without the assistance of an attorney. However, if an insurance company fails to properly handle the claim, there may be additional damages available to you in a civil action against the insurance company. If you feel victimized by an insurance company in a property damage claim, contact your attorney of the Colorado Division of Insurance at DORA.