HANDLING YOUR “PROPERTY DAMAGE” CLAIM (WITH AN INSURANCE COMPANY)
This resource, provided by the Parnall Law Firm, is intended to provide you with information that you may find helpful in maximizing the money you receive for damages associated with your car following a car, truck, or motorcycle accident. This primer is not intended to provide legal advice about any specific situation, since each case turns upon its own particular facts.
PLEASE NOTE: WHEN YOU SPEAK TO THE ADJUSTER, SPEAK ONLY ABOUT PROPERTY DAMAGE – NOT THE WRECK, INJURIES, OR TREATMENT.
I. Is Your Car a “Total Loss,” or is it worth repairing?
In dealing with the insurance adjuster regarding damage to your car, it is important to know certain terms used in the insurance industry. One such term is a “total loss.” “Total loss” typically means that the damage to your car is significant enough that to repair the car would require repair dollars equal to or more than 70 – 75 % of the car’s value. This percentage varies from company to company. In other words, it is “not worth it” to repair your car. This situation usually arises either when the damage to the car is very significant, the car is very old, or both. If a car worth $10,000 needs $8,000 in repairs, it will likely be a “total loss.”
II. Handling Your “Total Loss” Claim
If your car is a “total loss”, the insurance company typically owes you the fair market value of your car immediately prior to the accident. Put another way, the insurance company owes you what your car was worth (not what you paid for it). The insurance company may do a “market survey” to determine this amount. This basically amounts to finding out what cars like yours (same year, make, model, mileage, condition, and accessories) are selling for in your area. One way for you to do your own “market survey” is to check your local paper for similar cars for sale, and check car valuating services like:
- Kelley’s Blue Book, or kbb.com
- N.A.D.A., or nada.com
- For a fee, you can also get an expert opinion.
You can negotiate with the insurance company based on what your “survey” revealed, if it is higher than theirs. Some adjusters will be willing to pay you more for your car if you can provide support for your valuation. Remember also to tell the insurance adjuster if your car recently had new parts added or service performed. This may add value to the car.
If the insurance adjuster has a lower evaluation, ask for their basis. If the basis is a “CCC” report, ask for a copy. Examine it carefully to determine whether the cars in that report are truly accurate reflections of the value of your car. You can call the owners of the car in the CCC report to determine flaws that create a lower value, and then tell the insurance adjuster about those flaws and to run another report.
The insurance adjuster will usually make two offers: The entire value of the car, where you will be expected to “sell” the damaged car to the insurance company; and the value of the car, minus the salvage value (usually $500 to $1500) where you wish to keep the damaged car to make your own repairs.
Most car owners value their vehicle more highly than your ordinary buyer in the market. We all have the best knowledge of the car’s maintenance, and even, at times, some degree of attachment to our cars. Unfortunately, the jury instruction is clear – only “fair market value” can be awarded. In this respect, you must try to demonstrate the most accurate and favorable value of your car you possibly can, through the use of the websites mentioned above.
At the end of the day, the insurance company may not be reasonable about the value. It is difficult to decide whether to file a lawsuit over a difference of a few hundred dollars. Lawsuits take time, and money, to resolve, and may or may not be worth filing only over the property damage. In the meantime, of course you need a car. If the decision is difficult, please give us a call. We may be able to include a property claim in a lawsuit for personal injury – but it will take months, if not years, to resolve.
III. Handling Your “Repairable Damage” Claim
Many of the same principles mentioned above are applicable here. You may drive or tow your car to a body shop of your choice, for an independent estimate of the repair cost. You may also allow the insurance adjuster to inspect your car to perform his/her estimate. You may do both of the above.
Most shops will agree to repair your car for the amount of the insurance adjuster’s estimate/check. If the shop finds further damage to your car than originally estimated, the shop usually calls the insurance company for you and tells them it will take more money to repair.
- If the damage to be repaired is not significant, you may choose to simply live with the damage to your car, and cash the insurance adjuster’s check for the repair. (If the damage presents a safety issue, the insurance company may require that you complete the repair.) The insurance company still owes you for the amount it would take to repair the damage. If you do not agree with the insurance company damage estimate, you are free to get your own estimates and negotiate with the insurance company from there.
If you believe the repair was done improperly or inadequately, we recommend you consult with another experienced and independent body shop mechanic to evaluate the repair.
IV. Other Damages You May Be Entitled To
Rental and/or Loss of Use. In most cases, the insurance company will first investigate and determine whether their insured is responsible for the collision. After determining its insured is responsible, the insurance company may provide a rental car, if your car must be evaluated, and/or if it must be repaired. The insurance company will estimate the damage to your car, and should make you an offer within thirty (30) days. You are entitled to a rental car while your vehicle is in the process of being repaired (which sometimes includes the period of time that the insurance adjuster is estimating the repair cost). When you first speak with the adjuster, ask about a rental car if you need one. Ask the adjuster if he/she has any rental car agencies that you should use and how much the adjuster agrees to pay. The insurance company owes you reasonable rental car expenses.
If you do not rent a car during the period of time the car is being repaired, the insurance company still owes you for “loss of use.” “Loss of use” means the reasonable value of a rental car (a model similar to your damaged car), even if you do not rent a car, while your car is being repaired. Typically, this is similar to rental car expenses, so anywhere from $20.00 to $50.00 per day or above.
Currently, under New Mexico law, loss of use damages are available for reparable property but not for completely destroyed property. As unfair as it may seem, if your vehicle is a “total loss,” you will likely not be able to recover lost use damages or a rental car. It will be up to the car owner to replace it, or recover a check for its pre-wreck value, as soon as possible.
Diminished Value. In many situations, the wreck to your car may result in “Diminished Value” of your car. If you sell your car in the future, any potential buyer will likely perceive that the value is lower because of the wreck. This is particularly true when there has been substantial damage, such as frame damage, which obliges you to disclose such damage to potential buyers. If you strongly feel there is substantial damage that would result in diminished value, you have a few options:
1) Compare blue book value of your vehicle model (without damages), to Carmax’s estimate of its value with the repaired damages:
Get the blue book value of your car through Kelley’s Blue Book, or kbb.com; N.A.D.A., or nada.com; Craiglist.com; Autotrader.com; eBay.com.
Take your car to Carmax and ask them for a quote to buy your vehicle. Leave a copy of your repair invoice on the seat. (Do not tell them specifically about the repair or diminished value when you ask to have it valued. Leaving the invoice on the seat will give them the information they would need.)
Subtract the Carmax value from blue book trade-in value (or divide the latter by the former). The difference (or quotient), is one way of showing how much the value has diminished.
2) Pay an expert to give an opinion of “Diminished Value” that can be demanded in an insurance claim. (As with any expert’s opinion, be prepared for an opposing opinion from the defendant’s adjuster or defense counsel.)
3) Use an online service. It will be a bit less expensive, but will not carry quite the same weight since there is no in-person examination of your vehicle.
Four online services are: ICAN2000.com/dvdirect;WreckCheck.org;CollisionClaims.com;CollisionConsulting.com.
V. Storage Fees
If your car is taken to a junkyard or other storage facility after the accident, that facility will be charging storage fees usually by the day. This is something the insurance company usually pays, however, remember IT IS YOUR RESPONSIBILITY to get your car removed from the facility in a reasonable time period. If you allow the car to be stored longer than that, the facility will usually file a lien on the car to pay the storage fees, meaning they will sell your car to pay their own fee. Conversely, if there is no insurance to pay, or the insurance company initially denies responsibility, you should remove the vehicle to be stored for free, or as little as possible, pending further argument about their responsibility to repair or total the vehicle.
Remember when you are dealing with insurance adjusters to ask a lot of questions, especially if you do not know what the terms mean. Ask the insurance adjusters to pay for everything you feel you are entitled to including a rental car or loss of use. Finally, use common sense in what costs you incur after the accident so that those costs will be reasonable and more likely to be reimbursed by the insurance company.
If you have difficulty in negotiating this part of the claim, please let us know. While we do not usually take a fee in handling property damage, we understand that in very troublesome situations, a letter from a lawyer may be necessary. If necessary and pragmatic, we can also include the property damage claim in your lawsuit for personal injuries.
Very truly yours,