General Discussion. When an accident is caused by somebody else, then they are legally responsible for the consequences (which are usually handled and paid by their insurance company). Those consequences can include: bodily injuries, medical expenses, lost wages, as well as the cost to fix your vehicle, rental car reimbursement, deductible reimbursement, and lost use of your vehicle (and sometimes Diminution in Value).
Deductible. After an accident, your own insurance company may pay to repair your vehicle, minus however much your deductible was. You will need to contact the other person’s insurance company and demand reimbursement of your deductible, unless you have a deductible waiver from your insurance company.
Rental Expenses/Loss of Use. While your vehicle is in the shop being fixed, you may be in a rental car. The other party’s insurance company is legally responsible to reimburse you for the reasonable rental expenses that you’ve incurred (or your insurance company is, if you purchased that coverage with them). But please remember, if you have a Yugo being repaired, don’t go out and rent a Lexis. The owned and rented vehicles need to be somewhat similar. Once your repair is complete, you should promptly return the rental car, and then forward the rental bill to the other person’s insurance company (or yours if you have the coverage) for payment/reimbursement. Note: if you purchase the extra insurance from the rental car company, the other person’s (or your own) insurance company won’t reimburse you for that part of the bill, since you have a pre-existing duty in California to provide your own auto liability insurance coverage. Your own personal auto insurance may cover you for liability while you’re in the rental car, but check with your agent first. Also, if there was a time you were without your vehicle, and not in a rental, then you can demand that the other insurance company compensate you for the Lost Use of your vehicle (which would be an equivalent of the daily rental expense.) See our Loss of Use and Rental Expense Reimbursement letters.
Cost of Repair v. Fair Market Value (Total Loss Analysis). In California, insurance companies need only pay the lesser of: Fair Market Value (one second before the crash) v. Cost of Repair. Essentially, if the vehicle will cost more to fix than it was worth right before the accident, then they only pay you its market value (less the current “salvage value” of the vehicle if you keep it). If, however, it costs less to fix it than it was worth, then they pay to repair it. Although not generally considered by insurance companies in valuing vehicles, you can Look to Kelley Blue Book at www.kbb.com to get a general idea of what your vehicle’s approximate value is. But remember, there are problems using the Blue Book figures to set the value of your vehicle. This is only meant to give you a ball-park idea of market value. For a specific valuation of your vehicle, in your geographic region, you may need to employ an appraiser, and we can help you find one if you contact us. You can look at the repair estimate and compare it to your vehicle’s value to see whether it will likely be considered a “total loss” or whether it will be fixed.
Insurance companies frequently utilize a handful of companies to determine “market value.” However, in my experience, their values are generally low and favor the insurance companies. When an insurance company makes an offer for your vehicle’s value, demand a copy of their valuation report. Because time is generally important in collision damage claims (for several reasons), the adjuster can fax or email you a copy of the report. The report is only an opinion of your vehicle’s value; it is not fact. If you feel the offer for your vehicle is low, then question the basis for their offer: the valuation report. An opinion is only as good as the basis for it. And if the data the report is based on (the comparable vehicles contained in the report) is flawed, then so is the report’s conclusion of your vehicle’s value. These reports almost always have flawed bases. For example, they frequently list vehicles like yours as selling for a particular price, but when you call the supplier of information you find that sometimes the vehicle hasn’t even sold and is sitting on the used car dealer’s lot. Other times the comparable vehicle in the report sold for a completely different price. There are other inaccuracies in the insurance company’s valuation reports, but my point is that if you disagree with the insurance company’s offer, then you can question its accuracy. You can also look for other vehicles like yours that sold recently in your area and use those as your “comps.” Feel free to disagree with the insurance company, and if they continue to be unreasonable, then contact us and we may be able to help.
Diminution in Value Claim. In California, if your vehicle sustains damage approaching it’s market value, then you may have a Diminution in Value Claim. The idea is that even though your vehicle is repairable (meaning, that it’s going to cost less to fix it than it’s worth), simply by virtue of it needing so much repair, it’s actual post-repair value is less than what it was before the accident (or repair). In this day and age of sophisticated car buyers, with sites like Carfacts.com available (where people can check out the accident history of a vehicle), when you go to sell your car after it’s fixed, somebody might not pay you as much as they would have paid you had the accident (and resulting repair) not even happened. That difference is called “Diminution in Value.” This is another item of compensation you should consider in resolving your collision damage claim.
Release of Claims. After the insurance company pays you, they may ask you to sign a Release of Claims. That is your promise not to sue them or their insured (the driver or owner of the at fault vehicle) in exchange for them giving you money (or paying your bills, etc.). You should talk to a lawyer before you sign anything to understand the implications of the document. We will give you a free evaluation. If the Insurance Adjuster has you sign a general release of claims, then YOUR CASE IS OVER AND THEY WON’T PAY YOU ANYTHING ELSE, EVER! Do not sign anything that you do not completely understand, and if you have any questions at all about the document you are signing contact a lawyer to discuss it immediately! This point can’t be emphasized strongly enough.