Property Damage. How To Handle It


How To Handle A Property Damage Claim

It takes hard work, time, and money to buy a vehicle. It is important that you be compensated for any damage to it. Until someone has actually been in an accident, there is no way they can understand how upsetting and frustrating it is to see a vehicle that you have worked hard to buy become damaged by the carelessness of another person.

The purpose of this memo is to explain some of the ways your property damage can be handled in the event you find yourself in that situation.

Property and Injury Claims Are Separate

First, you need to understand that there are usually 2 separate claims which arise from a collision.

1) The property damage claim; and
2) The personal injury claim.

The law regarding property damage is tilted in favor of the insurance companies. This is because local governments want to encourage insurance companies to bring their business here.

What If Your Vehicle is “Totaled”

If the cost to repair the vehicle exceeds its “fair market value”, the insurance company can “total” it. This means that instead of repairing it, the insurance company can pay you its “fair market value”.

But HOW do they determine what the “fair market value” is?

The guiding authority on “fair market value” is the NADA “Blue Book”. However, the insurance company may calculate the “fair market value” in a way that is more favorable to them.

Challenging Insurance Company’s Valuation

If you feel that the value they have offered you of your vehicle is too low, here are some things you can do.

  • You must demonstrate why the value of the vehicle is more than they have offered. (Note: If you are offered “Blue Book”, the court will probably say that is fair.)

The best way to prove its value is to look in newspapers and auto sales magazines to find the same vehicle in the same condition selling for the amount you believe to be fair.

If you are able to collect several advertisements showing the same vehicle, in the same condition, selling for more than the insurance company has offered, submit them to the insurance carrier.

Incorporate into this any additional arguments, such as the ones listed below:

  • The condition that the vehicle was in prior to the accident.
  • Any new purchases or recent ad-ons to the car which increase its  value     (such as a CD player, new tires, etc…)
  • Any recent major repairs (such as a new transmission).
  • Low mileage, if applicable.

Minimize Costs To The Insurance Company

The law states that you must “mitigate” your damages. This means you must make EVERY effort to minimize the costs charged to the insurance company in resolving the property damage.

If you can go through your own insurance company (through either “collision” coverage or “rental” coverage), do so promptly.

– This should not increase your premiums, since the damage was not your fault. Your insurance company is therefore not going to view you as a risky driver, and no adjustment to your premium will be necessary.

You may have to pay a deductible. However, your deductible can be refunded to you when your insurance company is paid by the defendant’s insurance company. (Remember, this can take months).

Please be sure to tell us about any deductible you have had to pay.

If Your Vehicle Is In Storage

If your vehicle is in storage, you must get it out of storage as fast as possible. Every day it is in storage, it incurs additional storage fees.

Because you are obligated to “mitigate” your damages, and try to minimize the costs to the insurance company, you may be charged with some of the storage fees if the vehicle stays in storage an unreasonable amount of time.

And if the insurance company says the accident was not their fault, they most likely will refuse to pay for any storage charges. However, if we later prove that it was their fault, we can recover your storage costs, if you got the vehicle out of storage quickly.

If the insurance company is going to “total” it, make sure they know the vehicle is in storage, (if it is).

If the insurance company is going to repair it, make sure they remember the vehicle is incurring storage costs (if it is). This can be very helpful in getting your car repaired faster. (Why? If the insurance company realizes it is incurring storage charges, they will want to get the car fixed as soon as possible to minimize storage fees.)

Rental Cars

Are you entitled to a rental car? You are usually entitled to a rental (if there is applicable insurance) in the following situations: Where the vehicle is
– not drivable, or
– unsafe to drive, or
– if the vehicle is in the repair shop.

If you get a rental

Remember, the insurance company is only obligated to provide you with basic transportation (four wheels and an engine). You may not go out and rent the finest vehicle of your choice.

However, you can ask for a rental that is similar to the one damaged. If the insurance company will not provide you with the same type of vehicle that was damaged, point out to them any of the following issues that may apply:
– The car is critical to a job (i.e., a real estate agent needs to able to make a nice presentation).
– The number of children in the family requires a larger car.
– You participate in a carpool which requires a larger vehicle.

Rentals If Your Vehicle Is Totaled

Once the insurance company makes an offer to settle the property damage on a “totaled” vehicle, they are no longer obligated to keep you in a rental car.

You may try to negotiate a deal with the insurance company where they will keep you in a rental car for three days or so after the property damage check is received. Argue that once you get the money, you still need time to go buy another car.

If the insurance company offers an unfairly low amount to settle the claim, you can make a choice whether or not to take it.

What if you refuse the property settlement on the vehicle, and stay in the rental while trying to get a fairer offer?

– If it is found that the insurance company’s offer was too low, then they will be responsible for the cost of the additional rental car period.

– If it is found that the insurance company’s offer was fair and reasonable, then you may be held responsible for the cost of the additional rental car period.

Situations Where No Rental May Be Available

What if you do NOT have rental coverage on your automobile policy?

In that situation, you will need to rely on the defendant’s insurance policy to provide you with a rental car.

– The defendant’s insurance company is under no obligation to pay in advance for the car. (That is called direct billing).
– They can require you to pay for it first, and reimburse you later.

When insurance refuses to pay for your rental up front, they are refusing to accept “direct billing” on it. If the insurance company refuses to pay for your rental up front, then the only way for you to get a rental car will be for you to;

– Pay for one yourself, and
– Send the receipt to our office so that we can submit it to the carrier at the end of the case.

Remember, the defendant’s insurance company wants to make this very unpleasant for you.

– They want you frustrated and upset.
– They want to make you angry with your lawyer, angry with the person who hit you, and angry at the system.

Why? The insurance company hopes that you will get so frustrated that you will just give up on the entire case.

– If you give up, the insurance company gets to keep the money you are entitled to. They win.

If Your Car Is Safe To Drive

If your car is safe to drive, then you should take your vehicle to two reputable car dealerships and have two separate estimates done. We recommend that you go to an actual dealer of the type of vehicle you drive.

The reason to get these estimates is to combat the insurance company’s own estimate.
– The insurance company may make an artificially low estimate.
– The reason they may give you an artificially low estimate is because it makes the force of your collision appear less than it actually was.

If they say that you only had $900 of damage to the vehicle, where the damage was actually $1,400, they have just tried to make the violent force of the collision seem less than it was.

By having 2 other estimates (or at least one), your lawyer is now positioned to be able to rebut this devious tactic.

Used Parts

Unfortunately, the law allows the insurance company to install “used parts” to repair your vehicle, as long as the parts are of “like kind and quality”. If your vehicle is new, argue that you should get new parts.

If you have questions regarding this or any other aspect of a personal injury case, call attorney Bruce Blaylock. You can reach us at 301-951-1800, or toll free at 888-215-2968.

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Bethesda, Maryland 20815

Phone:  301.951.1800

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