The Six Steps You Need to Take After A Car Accident
STEP 3: What Should I Do If My Car Has Property Damage from the Accident?
The second most asked about topic of Georgia car accident victims is what about their car or property that was damaged. There are certain tricks that the insurance company will try to pull, so we have provided important information and suggestions on how you can recover all that you are entitled to. Read more below.
What Does It Mean If My Car is Totaled in an Accident?
Your car will be “TOTALED” if it costs more to repair your car than what your car is worth. When this happens, the insurance company will total it out and pay you the fair market value.
Example: If it costs $4,000 to repair your car, but your car is only worth $3,500, the insurance company probably won’t fix your car. They will “total it” and pay you the worth of the car, $3,500.
How Does the Insurance Company Determine the Prices of Repair and the Worth of My Car?
Usually, you have to wait to get a copy of the police report to find out the other driver’s insurance coverage information. Once you have the report, you can make a claim with the other driver’s insurance. If the other driver has not reported the accident to his/her own insurance company, you will have to set up a new claim. This can take a while. Once the claim is made, the other driver’s insurance company will send a property damage adjuster to look at your vehicle and determine if the vehicle is totaled or repairable. They will estimate the amount it will cost to repair your car and compare it to your car’s worth.
- IMPORTANT TIP: I recommend getting your own property damage estimate of the vehicle’s repair cost from a local body shop. Usually, estimates from these shops are free. It’s important to do this because you want to document all the damage caused to your car by the accident. You can also submit this information to the insurance company to compare against their own damage estimate. Sometimes, the at-fault insurance company may not take into account all of the damage from the accident.
Once you have your property damage estimate, you’ll want to compare the cost to repair your car versus its fair market value, or worth.
- IMPORTANT TIP: You can get an idea of your car’s value is by checking sites like KellyBlueBook.com or NADA.com.
If the cost to repair your vehicle is higher than the car’s value, the insurance company will total it out and pay you the fair market value. Having a good understanding of your car’s fair market value and the cost of repair will help you not be taken advantage of by the insurance company. Insurance companies will always look for a way to pay you the least amount of money.
How Much Should the Insurance Company Pay Me for My Totaled Out Vehicle?
Are you wondering what the totaled-out value, or fair market value, of your vehicle, is? Or how much the insurance company should pay you for it?
If the insurance company decides to total out your car instead of fixing it, they will make an offer for the loss of your vehicle. They will base their offer on the current fair market value, or your vehicle’s worth. The insurance company may use sources such as kbb.com (Kelley Blue Book) or NADA.com (National Automobile Dealers Association). You should check these websites too, get an idea of what your vehicle is worth, and offer a fair amount to total your car.
Using K.B.B. or NADA: Try to find a vehicle that matches your make and model of yours, which has similar features and mileage, and see what prices they are listed at. Those prices can give you a gauge of what the fair value of your vehicle is. You can submit these examples to the insurance company if they are trying to low-ball you with less than your car’s value.
WARNING – Before Your Cash that Check! Sometimes, the insurance company will try to lump together your property damage claim and your injury claim into one check, without you knowing the extent of your injuries or if you are ready to settle your injury claim. You should double-check the documentation before signing or cashing anything to ensure you aren’t closing out both claims. During a free consultation, you can get an accident attorney near you to look at the documents and check before you cash the money, to make sure you are not closing both claims on accident.
What If I Owe Money On My Car, but It’s Totaled?
It’s always frightening to clients when their vehicle is totaled out, and they still owe money on the car. However, as far as the at-fault driver’s insurance company is concerned, their only legal obligation is to pay the lesser of the cost to repair your vehicle or its fair market value (totaled out value). If your car is totaled and you owe money on your car to a finance company, the at-fault insurance company will pay the fair market value to the finance company. If the amount they pay is over what you owe, you will get back the difference. However, if the amount they pay when they total out your vehicle is not enough to pay off your car, you will owe the remaining balance owed to the finance company. This can be very disappointing news to clients, especially when they are driving a nice, newer model car, and their vehicle is totaled from the actions of another reckless driver. The only real way to protect yourself from this is to buy G.A.P. insurance when you finance the car.
G.A.P. insurance is just that: It pays the “gap,” which is the difference between the vehicle’s totaled-out value and the additional amount owed on the car. So, in essence, your vehicle is paid off. Although this type of insurance can be expensive, it can provide critical protection if your car is totaled. I would recommend that if you have a large loan on your car, it makes sense to have G.A.P. insurance to protect you.
If the Accident Wasn’t My Fault, Who Will Pay for My Property Damage?
If another driver hits your vehicle, causing damage, and that driver is at fault, his/her liability insurance coverage is generally responsible for repairing your automobile’s damage. Unfortunately, there are specific challenges that people face when this occurs. The number one problem people face is the lengthy amount of time it takes to get the other driver’s insurance company to compensate you for your car or have your damages repaired.
The first thing you have to do is wait for the police report. Generally, in Georgia, it takes a police department three to five days to issue the statement. The police report contains essential information about the other driver and his/her liability insurance information. Often, people do not report accidents that they cause to their own insurance company. This is probably because most folks hope that the other driver might repair their vehicle or go through their own collision coverage.
When most of my clients get their police report and contact the at-fault driver’s insurance, it is often the first time the other driver’s insurance has heard about the accident. The other driver’s insurance then has to set up a claim, which takes time. They also have to contact their own insured, who caused the accident, to confirm what happened.
Guess what? Often, their own insured will not call them back or take many days before calling their insurance company back. Then, guess what? Sometimes, they lie and say that the accident was not their fault, even though the police report has their driver listed as the at-fault driver. These delays can go on for a long time, even if it’s very clear from the police report that another driver caused your vehicle damage.
Why Should I Use My Own Car Insurance First to Fix My Property Damage?
You may be wondering why a lawyer would tell you to go through your own insurance first to fix your property damage, especially when the accident wasn’t your fault. Let me explain:
I would advise going through your own insurance to fix your car damage, but only if you have collision coverage. Collision coverage will repair your vehicle, irrespective of who is at fault in causing damage to it. The primary benefit of going through your collision coverage is that you can have the repairs made quickly through your insurance. Your insurance company can then go after the other driver’s insurance for reimbursement on the repair cost. This should not affect your insurance rates, because you were not at-fault in causing the accident and your insurance company is getting reimbursed from the other driver’s insurance company. This may take a while, but you do not have to wait on the other driver’s insurance to repair your vehicle. Of course, this only works if you have collision coverage to pay for your vehicle’s repair.
What Should I Do If the Other Driver’s Insurance Company Won’t Call Me Back About Fixing My Car?
This is one of the most frustrating things that folks have to deal with after an accident. You have been trying to contact the other driver’s insurance company, but they will not call you back. We see this quite often; insurance companies delay in contacting you to avoid paying on your claim. Maybe they think you will give up, as some people do.
Fortunately, under Georgia law, there is a provision, O.C.G.A. §33-4-7, which provides penalties against an insurance company if they stubbornly refuse to repair your vehicle when it is evident from the police report that their driver is responsible for causing damage to your car. We usually send a letter by certified mail to guarantee that the insurance company receives it. This is the remedy that you have when the insurance company stubbornly refuses to repair your vehicle. Unfortunately, sometimes you just have to take them to court.
If another driver caused the accident, can I get a rental car?
The general answer to this question is “yes”. The period that it takes to repair your vehicle is called “loss of use.” The insurance company of the driver who is at-fault in causing your accident is responsible for your “loss of use”.
There are two things that you can do while your car is being worked on:
- You can rent a car yourself and save the receipt for reimbursement from the at-fault driver’s insurance company.
- You can contact the at-fault driver’s insurance company and ask if they will provide a rental car for you. Insurance companies can generally get a rental car at a discounted rate since they rent so many of them. They may provide one for you.
If the insurance company thinks that you will not rent a car by yourself, they may not provide a rental car for you. They may believe that if you do not rent a car, they will not be held responsible for your “loss of use”. Of course, if you do rent a car on your own, they are responsible for reimbursing you for the full cost of renting a vehicle while yours is being repaired.
So, the key thing to remember in all of this is to try to make the insurance company think that you will rent a car on your own right away if they don’t rent one for you. They will usually provide you with one pretty quickly if they know their driver is at-fault in the accident because they don’t want you to run up a huge rental car bill.
Whose insurance do I use to rent a car after an accident that was not my fault?
It’s bad enough that someone has wrecked your car and it’s not available to you because it is being repaired, or even worse, it’s totaled out! If you do not have another available vehicle, you may need to rent a comparable vehicle. For some folks, the big problem is that they don’t have a credit card or some other restriction (under age 21) that prevents them from renting a car in their own name.
My first piece of advice is to try to rent a car if you can. The “at-fault” insurance company will have to reimburse you for the reasonable cost of renting a comparable vehicle for your vehicle being repaired. If your car is totaled, you can use a rental car until the time that they pay you for the totaled-out price of your car. Sometimes, this can take a while. So, make sure that you keep proof, whether it be receipts or a credit card statement showing the costs incurred for having to rent a vehicle.
Many clients ask the question, “Do I use my insurance or the other driver’s insurance for my rental car?” My advice to people is that sometimes, the other driver’s insurance will help you obtain a rental car. Still, the problem with this is that often you have to wait for the police report to prove to the other driver’s insurance company that their driver is responsible. This can take several days. That is why I advise that if you can get a rental car on your own, it is better to do it right away. You can get reimbursed for it at a later time.
Sometimes, folks have rental car coverage on their own vehicle. By all means, if you have this coverage- you should use it. Your insurance company can always get reimbursed from the other driver’s insurance company to pay for your rental car.
One common question is, “Do I have to pay a deposit or other additional insurance on the vehicle that I am renting?” Generally, your liability coverage with your own insurance company will cover you if you are liable or at fault in causing an accident when you rent a car. There may be additional coverage that the rental car company will offer to you, but the “at fault” insurance company may not reimburse you for this additional coverage that you purchase.
Sometimes, a car rental company may make you put down a deposit when renting a car. If the deposit is returned to you when you return the car, it’s probably not something the “at fault” insurance company will reimburse you for. However, if the deposit is not refundable to you, then you might have the argument that the deposit was a reasonable and necessary cost for renting the vehicle and should be reimbursable to you from the “at fault” insurance company.
Why do I have to pay a deposit on a rental car?
It’s very frustrating for folks that have been in an accident caused by another driver to have to pay any money out-of-pocket for anything. Unfortunately, sometimes it takes a while to set up an insurance claim or talk to an adjuster about reimbursement for your losses. If you do not have rental car coverage on your vehicle, you may have to pay some upfront costs, which may include a deposit for a rental car. Some folks put the deposit on their credit card. The important thing is to keep receipts of all your expenses related to an accident that is not your fault.
You can seek reasonable reimbursement for all your financial losses. These financial losses include reimbursement for reasonable expenses for renting a car while yours is being repaired. They also include other reasonable expenses related to the property damage of your vehicle. Sometimes it is helpful to contact an attorney with specific questions about your rights with respect to property damage or reimbursement for a rental car.
Why Do I Have To File a Claim on My Car Insurance?
When we start representing a client against another driver who has caused injuries to our client as a result of an auto accident, we immediately send a letter out to the at-fault driver’s insurance company. In the letter, we ask the insurance company for a declaration page of the at-fault driver’s insurance (O.C.G.A. § 33-3-28).
This is important because it tells us pretty quickly if the at-fault driver has valid insurance coverage on the vehicle that caused our client’s injury. The insurance company is also supposed to provide us with the amount of liability coverage that their insured has on the vehicle they are driving.
This information is very important because it immediately notifies us if there is valid insurance coverage and the amount. Most times, we receive a response from the insurance company that their driver does have valid coverage, but often the liability coverage is only $25,000.
Unfortunately, sometimes $25,000 in liability coverage is not sufficient to cover the medical bills and pain and suffering that someone suffers as a result of an auto accident.
In order to protect our client, we always immediately send a letter to our injured client’s auto insurance to notify them that the insurance claim may be an uninsured or underinsured motorist claim. We send this letter immediately for two reasons:
- Most insurance companies in their insurance contract say that you are required to notify them immediately of any potential claims. If they are not notified immediately, they may not have to provide coverage.
- The other reason that we notify the insurance company of a potential claim is that it’s important to know the amount of uninsured motorist coverage that an injured client has available in the event the value of his or her claim exceeds the limits of the at-fault driver.
This information is very important because it lets us know the amount of money potentially available to the injured client and what may be a fair settlement for the client or if the case goes to trial.
So, to answer the question a client has about whether they have to file a claim on their own insurance, it’s important for them to know at the outset of the case -we are writing a letter to their insurance company to notify them of a potential uninsured motorist claim or underinsured motorist claim, but we are not really filing a claim – we are just putting them on notice of a potential claim. It is important to understand the difference, and important to know that putting the insurance company on notice of a potential claim should not cause your insurance rates to go up.
Will My Auto Insurance Premiums Go Up?
Often, when clients come in to see me. they ask if their insurance premiums will go up if they are in a car accident caused by another driver and they report the accident to their (the client’s) insurance company.
In general, your premiums should not go up if another driver caused the accident. The rationale for this is that since you did not cause the accident, you should not be considered any greater risk for causing accidents in the future. Insurance companies are most concerned about risk, so if they see you as a driver who has caused an accident in the past, you are more likely to cause accidents in the future, increasing your premium.
Sometimes, folks are forced to call their own insurance company to have their vehicle repaired or totaled out under their collision coverage, so they can get the money for another vehicle. They do not want to be without a vehicle for any length of time. This is generally okay because your insurance company that pays to repair your vehicle will get reimbursed from the at-fault driver’s insurance. Since there is no financial loss to your insurance company, they should not increase your premium.
However, sometimes insurance companies will use any excuse to increase your premium. So, you should really watch them on this. If they look to increase your premium because of an accident where you are not at fault, it might be time to drop that insurance company. I would strongly suggest that you shop around for insurance coverage. Most car insurance companies will not seek to increase your premiums if you are not at fault in causing an accident. If your insurance company increases your premium because another driver has caused an accident to your vehicle – shop around – you may be able to find cheaper rates elsewhere.
What is Diminished Value?
If the insurance company decides that they will repair your car, you may be entitled to diminished value for your automobile. Diminished value simply means that your car’s value was diminished as a result of being in an accident.
A 2001 case from the Supreme Court of Georgia (State Farm Mutual Automobile Insurance Company vs. Mabry et al., 274 Ga. 498, 556 S.E.2.d 114), ruled that insurance companies who are responsible for paying property damage on a vehicle as a result of an accident are also liable for diminished value. A formula is used by the insurance company to determine the amount of diminished value that they are required to pay.
How do I know the insurance company’s offer for my car’s diminished value is fair?
If the insurance company is offering diminished value for your vehicle, the insurance company has done a calculation of what they believe your diminished value claim is worth. The factors that go into determining diminished value include the make and model of your vehicle, the amount of property damage, and the number of miles on your vehicle.
For this blog’s purpose, I cannot go into the specifics of how much your diminished value claim is worth. If you have received a reduced value check, and have any questions about how it was calculated, I would advise that you call the adjuster who sent you the check, and ask how he or she figured it. You may want to make sure that the information they used to calculate the check is correct. I advise you not to cash the check until you understand how it was calculated.
Should I cash the check the insurance company sent for the diminished value of my car?
The insurance company has done a calculation of what they believe your diminished value claim is worth. If you have questions about how that was calculated, call the adjuster who issued the check, and ask how it was calculated.
Once you cash the check, it is considered an acceptance of the offer made, and your diminished value claim is resolved. There will not be much that you can do about it once you have cashed the check.
Disclaimer: It is important to note that this is general information and should not be considered “legal advice.” I have been handling personal injury cases for many years. I can offer general answers to common questions, but please do not construe anything on this website to be legal advice about YOUR CASE. Each case is different! An attorney can only give legal advice when he or she understands the facts involved in your case.