What Should I Do If My Car Was Damaged In an Accident
If your car was damaged in a car crash, you have certain rights under Utah law. Generally, the insurance company for the person who caused the damage to your car will be responsible for making things right. Your own car insurance is also available as a backup (assuming you have full coverage) if the at-fault insurance company is denying or delaying your property damage claim.
Can I Handle My Property Damage Claim on My Own?
This is what most people will do after they are involved in a car crash. They will typically report the claim to the at-fault insurance company and open a claim for property damage and/or personal injury at the same time. Although aggravating and sometimes frustrating, in most cases the owner of the damaged car is able to work things out with the insurance. This might be where you are.
The reason most people handle their property damage claim on their own is because no one wants to pay an attorney to do it. They may not also be aware of a less frustrating way to do it. At the Kramer Law Group, we offer help with property damage claims if the car owner is one of our personal injury clients (or related to them). If you are not a client of ours, keep reading. Hopefully you’ll find some value in this article.
Time Is Of The Essence
From the date of the crash to the time you resolve your property damage claim, you will want to keep track of where your damaged car is and the mounting storage fees. Some tow yards, for example, will charge $20-$30 a day to keep your car there. This could easily amount to well over $500 a month, possibly more than your monthly car payment! While the insurance company is required to pay for “reasonable” storage fees, they will cut you off at some point if you don’t “mitigate” or reduce your damages or costs by moving the car to a place that doesn’t charge so much. High storage fees by these wrecking yards are a racket as they prey upon innocent consumers who are simply waiting around for the insurance company to make a fair offer on their totaled vehicle. The problem is most prevalent when there is no attorney involved. The insurance company will usually give you notice that they intend to stop paying for storage fees. Make sure they have your correct address or you can miss this letter. They may also tell you over the phone or in a voice mail. Once they give you notice, you will have just a short period of time to move your car.
Opening the Claim With the Insurance Company
At the scene of the crash or shortly thereafter, you were hopefully provided with the insurance information of the person who caused the crash. With this information, the first step is for you to contact the insurance company and open up your property damage claim. (If you were injured, you will want to open up this claim as well.) While on the phone with one of their agents, you will want to have basic information of the crash ready to give to the phone operator, including information on your wrecked car. At the end of the call, the agent will provide you with a claim number that identifies the claim with the insurance company. Keep this number handy, as you will need it when you contact the insurance company in the future. The agent may or may not give you the name of the adjuster at this point. If they don’t, you will likely get a call from them a couple days after you make your claim. If you were also injured in the car crash, you should expect TWO adjusters to be assigned to your claim: one for property damage and one for personal injury.
Pro Tip: When you are talking to the insurance company and their adjusters, be careful to not talk to the agent or adjuster about how the crash happened or about your injuries (if any). Avoid giving recorded statements where they are asking you these questions as your statements could come back to bite you.
Can I Make A Claim With My Own Insurance Company?
If you have “full coverage” car insurance, where your company will cover your property damage whether you or someone else caused the crash, then this is certainly an option for you. There are pros and cons to doing this.
One of the plusses is that going through your own insurance might be a little quicker as your insurance has an obligation to take care of it customers. You potentially could save a few days or even weeks if you do this. They will be quicker to “accept liability,” even when it could be said that you may have contributed to the crash happening. And they won’t pay just a percentage, if this is the case. In terms of values for your totaled car, their offers might be a little fairer as they generally have an obligation to act in good faith and deal fairly with their customers. This might lead to less haggling when it comes time to negotiate.
On the negative, there is the pesky issue of the deductible, which will need to come out of a totaled vehicle claim. Again, if there is any issue of your contribution to the crash, you will probably need to grin and bear it when it comes to the deductible. In the end, though, if you are free of fault in causing the crash, you will be reimbursed for the amount of your deductible. Some insurance companies will even waive the deductible with the expectation that they will later collect it themselves from the at-fault carrier. Another potential downside is not timely getting a rental car or “loss of use” coverage. This can be a big issue if you are out a car and you need to get to your doctor’s appointments, get the kids to school or even get to work. The reality is that most people do not purchase rental car coverage. If this is you, not having prompt access to a rental car could be a real downer. Keep in mind, though, that if you paid for a rental car out-of-pocket, the at-fault insurance will still generally be responsible to pay for this. It just requires you to make and pursue the claim with the insurance company.
The Insurance Investigation
The next step in the process is the insurance company’s “investigation” into how the crash happened and whether they are responsible for your property damage. I call this the “weasel” period where the insurance company also looks to see if they can get out of paying the full value of your wrecked or totaled car by coming up with excuses for why the other guy is not totally at fault. This is the stage where they will want to take your statement over the phone. This is the internal process they go through before they can “accept” liability for the crash happening.
In my experience, when the crash is clear and the at-fault person is apologizing to you at the scene and accepting responsibility, this can be a quick process. Unfortunately, when the at-fault person makes up a story or embellishes or minimizes their contribution to the crash, you can expect that this stage of the game will take longer. In Utah, insurance companies have 30 days to accept or deny liability. While most decisions will happen quicker, if there’s any kind of disputed liability, you should expect that they may take the full 30 days before they tell you the results of their “investigation.” Even if our office is involved with helping you with your property damage claim, you should expect the possibility that the insurance will still take the full 30 days they have under law.
Occasionally, the insurance may go right up to the end of the 30-day investigation period. This is usually not a good sign and suggests they may be looking to deny the claim or whittle down liability. If this is happening, you may wish to open your property damage claim with your own insurance company. (See above.) Assuming, however, that the at-fault insurance accepts liability, this will open the door to them either paying the body repair shop to fix your car or them making an offer on the value of your totaled car. Regardless of whether you get your car fixed or receive money for a totaled car settlement, your personal injury claim (if you made one) will continue.
What If My Car Needs To Be Repaired?
Do I Have To Use The Insurance-Recommended Body Shop? If your car is going to be repaired, you should know that you have the right to have your car repaired at any facility you wish. I always recommend my clients to use the facility recommended or endorsed by the dealer. It seems that insurance adjusters have been trained to steer the claimant to one of their “approved” shops. What this means is that the shop has some special relationship with the insurance company that, to me, puts their independence into question. Will the shop use manufacturer-recommended parts or cheap Chinese knock offs? Will they replaced damaged components or try to salvage what should be scrapped? These are questions you will want to ask the shop that you choose. If anything, I would say you should avoid the shop that they seem to be pushing you to. At the end of the day, you want a quality shop, with good reviews, that will stand behind their repair.
Is There a Difference Between the Insurance Estimator and an Independent Estimator?
Many insurance companies will send a traveling appraiser to look at your car and give you a preliminary estimate of what the repair will cost. This estimate is invariably lower than what the actual cost of the repair will end up being.
Take your garden variety rear ender, for example. While it may seem obvious that the rear bumper needs to be repaired, what about possible frame damage? What about support and bracket compromise? There are some things you won’t find need repairing until the repair begins and they can start the break down process that will allow a technician to thoroughly inspect the damaged area. Given that a certain percentage of claimants will just pocket the insurance estimate amount and never repair their car, the insurance industry saves a bundle with these low-ball estimates. I recommend getting 2-3 estimates from legitimate shops. If you do get an estimate from the insurance-recommended shop, make sure you get 2 additional estimates for comparison. As I am fond of saying, you will actually maximize the value of the repair job by actually getting the repair done. This way, when additional issues are spotted after tear-down, the shop will work out the additional cost with the insurance company so that all items are covered.
What If My Car is Totaled?
A car will generally be considered “totaled” when the cost to repair it exceeds 70-80% of its values. Under Utah law, the insurance company needs to pay the amount of money that it would take for you to get an identical car to the one that was wrecked, including any amounts for taxes, license, fees, etc. I advise my clients to get on KSL.com to do some research on the “comps,” or cars that are comparable to theirs to see if they can find cars similar in terms of the year, options, mileage, condition, etc. Adjustments are made for comparable cars that are newer or older, more or less mileage, options, condition, etc.
After looking at these comps for a while, you will start to develop an idea of what the car may be worth on the open market. It is that value, plus all the fees mentioned above, that the insurance company should pay you on your wrecked car. You basically want to have a check for the exact amount that it will cost to purchase your car again on the open market in your area. Make sure to print results of your research and/or get screen shots or links to similar cars you see on line as you may need to submit your proof in negotiating the highest value you can get. If the insurance company still refuses to offer fair value, you can always file your claim in district court. This is the nuclear option when they are being completely unreasonable. You need to consider, though, if such an action would be worth it in terms of costs and possible attorney fees.
I Just Spent a Bunch of Money on My Car. Can I Get That Back?
The short answer is probably not. For example, if you just spent $7,000 on a new engine for your car, you will likely not get that money back. The fact that you spent that money did increase the value of the car, but usually not by the amount of the repair bill. At the same time, you will always want to submit repair bills, invoices for new tires, etc., to the insurance when negotiating a total loss claim as this will help prove that you have recently put money into the car and that has increased its value. A car on the open market, for example, that has a new engine, will generally be worth more money that one that has high miles on it. This all adds to the fair market value of the car, the amount the insurance company is required to pay you.
Should I Continue Making Payments on My Totaled Car?
Yes, don’t stop. The bank is sometimes the last to know that your car is totaled. So if you miss a scheduled payment and go past 30 days, this will adversely affect your credit rating. Although it won’t seem fair that you have to make a payment when you don’t even have a working car, the bank will still expect payments to be made according to the contract you have with them. The idea is that when you negotiate fair market value for your car, you will have money to pay the loan off. Unless of course, you are “upside down” on the loan.
What If I’m Upside Down On My Car Loan?
This happens more often than you would think. It happens most often with new car purchases and less frequently with used car purchases. As they say with new cars, the minute you drive it off the lot, it depreciates by 10-20%. This is why they came out with “gap” insurance. This type of insurance protects you when you can’t or don’t want to make a large down payment. It protects you when you owe more money than your car is worth. If you don’t have gap insurance, though, you are still obligated to satisfy the terms of the loan. So even if you reach a settlement with the insurance for the fair market value of your car, you may still need to continue making payments until the loan is completely paid off.
If you are upside down on your loan and have no gap insurance, you still might be able to work out an arrangement so you don’t have to continue making payments on a car you no longer own or drive. Simply put, you do this by buying a replacement car – new or used. This replacement car is “collateral” for the new car loan as well as the old loan that they roll into the new purchase. This process is referred to as “substitution of collateral.”
The process starts when the lender gets their check from the insurance company and applies the proceeds to your auto loan. Once this happens, there will be a deficit that needs to be satisfied. The following two steps then occur: (1) the lender releases its interest in the car by sending the title of the totaled car to the insurance company; and (2) the deficit amount on the old loan is rolled into a new loan for a replacement car. That’s it. You now have a new car loan with part of your old auto loan attached. While it’s not desirable to be upside down, you should use your predicament with the auto dealer to leverage the best possible discount on your replacement car so you can reduce – or even eliminate – the deficit as much as possible. And if you purchase a car from the same dealership as the one that sold you the totaled car, you may be able to get them to waive any additional down payment.
Who Gets The Check After My Totaled Car Settlement?
If you owned your car free and clear, the check will be made out to you and you can cash it without reservation. When our office helps clients with their property damage claim, we simply pass the check over to our them without any deduction, as this is a value-added service we provide. If the car is financed, however, the insurance company is required to put the name of the lien holder, or bank or credit union that financed your car, on the check, along with your name. You will then endorse the check and send it to your lender. If the check is more than what is owed on the loan, your lender will send you a check for the difference. If you owe MORE than what the check is, or are “upside down,” then you have a couple of options which are discussed below.
What If I Want To Keep My Wrecked Car?
Because it doesn’t take much to total an older car, many people choose to hold on to their car, even if the bumper is pushed in at the back or there is a large dent in the side door. Some think they can make the repairs themselves or plan on having Billy Bob who works out of his garage, do the repair. This is certainly your prerogative. Generally when we get offers from the insurance company for totaled cars, we get two offers: one for what should be fair market value — which requires signing over the car to the insurance company — and one offer for keeping the car. The amount of this “salvage” offer is the fair market value minus the value of your car as a “parts car.” So if your car is worth $10,000 and it’s worth $2,000 as a parts car, you will receive a check for $8,000 and you keep your car.
When you choose to keep your car, however, the title will be changed to reflect that your car is now a “salvage.” This obviously will diminish the value of your car on top of it already being involved in a car crash. One downside to taking the “salvage” value of the car and doing the repairs yourself is underestimating the cost of the repairs themselves. You may not realize, for example, that the transmission was damaged in the crash and get stuck with a repair bill for this. When a car is repaired, the cost of the repair will go beyond the sometimes-superficial evaluation that an insurance adjuster will make on your car.
What If I Still Have Questions About My Property Damage Claim?
I hope this article has answered some of the questions you have on this topic. If you still have questions, please give us a call and ask to speak with one of our property damage experts. We are happy to give you some friendly pointers. And as offered above, if you are a client of ours, then property damage assistance is on the house if you request it.