So you have been in a car accident and your car is damaged. What do you do now?
You might be asking yourself “Do I need a lawyer?” If you are injured or might be injured you should definitely talk to a lawyer. Even if you don’t hire a lawyer you should get advice. Our consultations are free. If you are certain you are not injured, you might think about handling the property damage claim yourself. The purpose of this paper is to provide you general information on handling your property damage claim.
1. First Question: “Who was a fault? You or the other driver?”
If the other driver was at fault you need to contact the other driver’s insurance company as quickly as possible to report the claim and schedule a time for the insurance adjuster to look at your vehicle and provide an estimate to repair your vehicle. This will be a claim on the other driver’s insurance policy.
If you were at fault and you have “Comprehensive/Collision” insurance, you should contact your insurance company to schedule a time for them to look at your vehicle and provide a repair estimate. Your insurance company should pay for the loss minus your deductible.
Helpful Note: You should always call the police and obtain an accident report. The accident report should contain a section outlining the officer’s opinion on the cause of the accident. Further, if the other driver was at fault, but does not have liability insurance, you should check on whether you have Uninsured/Underinsured (UM/UIM) insurance coverage on your car. UM/UIM motorist coverage may apply in the following situations: (1) UM/UIM coverage may apply if you are in a vehicle and the other vehicle does not have insurance or sufficient insurance; (2) UM/UIM coverage may apply in a hit and run accident; (3) UM/UIM coverage may apply if you are hit by a motor vehicle as a pedestrian; (4) UM/UIM coverage may apply if you are hit by a car while traveling on a bicycle; (5) UM/UIM coverage may be applicable if you are a passenger in another vehicle and the driver does not have sufficient insurance.
2. Second Question: “Has the insurance adjuster stated your vehicle is TOTALED or REPAIRABLE?”
(a) The insurance adjuster has stated your vehicle is totaled
Generally, your vehicle will be considered “totaled” when the cost to repair the vehicle is higher than the actual cash value of the vehicle. In determining whether your vehicle is totaled, insurance companies will calculate the total loss ratio (cost of repairs/actual cash value) and then compare this ratio to limits set either internally within the company and/or regulated and established by state law. As an example, a damaged 2010 Ford Fusion with 90,000 miles in good condition has an actual cash value of approximately $5,000. Total repair costs are estimated at $3,000, for a damage ratio of 60 percent. This car would not be considered a total loss in Texas where the total loss ratio is 100%.
Keep in mind that the amount you owe on your vehicle, if any, does not matter to the insurance adjuster. If you owe your lender more on your vehicle than its “Market Value” (“upside down”), your only remedy may be “Gap Insurance” through your lender. For example, if you owe $8,000 on your vehicle but the “Market Value” of your vehicle is only $6,000, “Gap Insurance” may help pay off the $2,000 “gap”. However, “Gap Insurance” usually does not cover late fees and other penalties on your loan if they have been incurred.
If the insurance adjuster informs you that your vehicle is totaled, he or she will typically make you a property damage settlement offer. If you do not like the offer, ask the adjuster to send you the “market analysis” of your vehicle. It may be unwise to make a counter offer at this time without looking at the “market analysis.” The “market analysis” is prepared by the insurance company to determine the “market value” of your vehicle. The “market analysis” will also show “comparable” vehicles which are or were recently for sale. Check the “market analysis” for accuracy (i.e. does it have the correct year, make and model of your vehicle, does it have the correct mileage, does it have all the correct features of the vehicle such as navigation system, sunroof, etc.). If your vehicle is not defined accurately in their “market analysis”, let the adjustor know and ask them to have it redone. Let them make the corrections before you make a counter offer.
In order for you to properly negotiate settlement with the adjuster, you will need to find additional “comparable” vehicles with higher values than the “market analysis”. These can be found in local papers and online. Some good websites to find comparable vehicles are www.autotrader.com, www.ebaymotors.com and www.cars.com. When searching for comparable vehicles, make sure you use the correct year model, mileage range and similar options in your search. As you find “comparable” vehicles in the paper or on the internet, be sure to save them, so that you can present them to the adjustor when you make a counter offer. Find as many “comparable” vehicles as you can that have a value higher than what is being offered by the insurance company. I suggest a minimum of three or four “comparable” vehicles but the more the merrier.
After you have reviewed the corrected “market analysis” and are certain that the adjuster has made any necessary changes to the “market analysis” and after you have searched for your own “comparable vehicles”, you should make a counter offer to the insurance adjuster if necessary. If, after your review, you believe the insurance adjuster’s settlement offer is too low, you will need to make a counter offer. The counter offer you make should be based on the value of the “comparable” vehicles you located during your search. Obviously, you are sending the “comparable” list of vehicles to the insurance adjuster to increase the adjuster’s offer so make sure the “comparable” vehicles that you locate are worth more than the original settlement offer from the insurance adjuster. It may take more than one counter offer from you to increase the settlement offer to an amount that is acceptable to you. If this is the case, you should make another counter offer based on any additional “comparable” vehicles you have located in your search.
Further, if your car has been totaled, the insurance company may cover a rental vehicle for a short period of time. Usually, they will stop paying for your rental vehicle very quickly after they have made the first settlement offer. Therefore, time is of the essence. As soon as you receive the “market analysis”, you should be prepared to give them your counter offer which is based on your “comparable vehicles”. Making this counter offer the same day you receive the “market analysis” is a good idea.
(b) The insurance adjuster has said your vehicle is REPAIRABLE but not TOTALED
Take your vehicle to the body shop of your choosing. The insurance company may suggest a repair service but does not have the right to tell you where you have to get your vehicle repaired.
Once you decide who you want to repair your vehicle, take your vehicle and the repair estimate to the repair shop of your choice. If there is any disagreement over the repair estimate, the repair shop and the insurance company can hopefully reach an agreement.
It is possible that the repair shop will find “hidden damage” which is damage that was not detected or visible at the time the repair estimate was written. In such a case, the repair shop will contact the adjuster and deal with them on correcting the repair estimate. In most cases the insurance company will pay for a rental car for a “reasonable” time for repair. If the repair shop takes longer than what the insurance company believes is “reasonable” be prepared for the insurance company to refuse to continue to pay for the rental car.
Third Question: What happens if I do not agree with the insurance company?
There are times when you and the insurance company do not agree. Sometimes the disagreement is over who is at fault. Other times it may be over the value of a totaled vehicle. What do you do then? When that happens your choice is to accept what the insurance company offers or file a lawsuit. If you decide not to accept the offer but file suit, that brings you back to the question “Should I hire a lawyer?” If you choose not to hire a lawyer, you may file suit yourself in Justice of the Peace Court. JP court is designed to allow citizens to try their disputes without lawyers. You can find a JP court near you by looking online or in the yellow pages. Court personnel will help you with the process.