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Ten Things You Must Know to Have Insurance Pay For Your Car Repair After an Accident

Damage PhotoIn this article, we discuss property damage that is the result of an automobile collision, and answer some of the most common questions people have relating to their vehicle’s repair.

1. Do I need an attorney?

The answer depends on whether there are injuries involved. Generally speaking however, if there are only issues of damage to your car as a result of the collision, you do not need an attorney. Furthermore, an attorney will probably not take the case if the only damages are those to property.

2. What about insurance?

One of the reasons we pay for insurance is so we do not have to come out of pocket when accidents happen. In the event of an accident you will want to use either your insurance or the other party’s insurance. Your policy likely has a deductible. This may vary from $500 to $5,000. Typically the lower the deductible, the cheaper the premium for the policy. In the event you decide to use your insurance, you will be responsible for your deductible. Any check you receive for the repair will be less your deductible. If you choose to use your insurance and pay the deductible, your insurance company will bring a claim against the third party’s insurance or directly against the third party if they did not have insurance. This is called “subrogation”. Once the two parties settle, you will receive back the deductible amount that you paid up front.

3. What about the inspection of my vehicle?

First, you will want to take the information that you received from the third party involved in the accident and call to confirm the their insurance. Most companies have an “800” number to which you can report the claim. Always request a claim number. An adjuster will be assigned to handle your property damage claim. Be patient, nothing happens fast, but it shouldn’t take more than one week to have an adjuster assigned to your claim.

The inspection can take place at your home or the repair shop of your choice. You have no obligation to take it to the body shop that the insurance company recommends. Once the inspection is complete, ask for a price estimate of repairs. Make sure that any supplemental repairs will also be covered once the damaged area is torn down to inspect for any additional damage.

4. What about rental car coverage?

You will likely need a rental car while your vehicle is in the shop. Check your insurance to see if you have rental car coverage. If you don’t, have it added.

Usually, insurance will pay no more than $25 per day for a rental car. Insurance will only pay for a rental from the time your vehicle enters the shop until the time you receive a check. They will not pay for insurance on the rental vehicle, nor will they pay for gas. So call your insurance company and see if you are covered under your policy with them for any damage to the rental car in the event of an accident. If you need a truck or similar work vehicle, then you are entitled to a similar vehicle.

You are also entitled to an amount for “loss of use” of your vehicle from the time of the collision until you receive your vehicle until you receive your vehicle back from the shop. To claim $25 per day for loss of use is not unreasonable.

5. What about towing costs?

After a collision, your vehicle may be towed to the tow company’s storage facility. In the event this happens, get it out as quickly as possible or it will be accumulating storage charges up to $100 per day. You will not be able to get your car out of the tow yard until the storage fees are paid. Your insurance company will pay the towing costs if you immediately report the location of the car to them. If the vehicle is not taken out of the tow yard in a timely manner, it will be legally sold for salvage to cover the costs of the storage fees.

6. What about the repairs at the body shop?

What if you don’t like the repair job that the body shop did on your vehicle? Your recourse will depend on who chose the shop. If the insurance carrier chose the shop and referred you there, you may be able to insist on a better repair. If you chose the shop, you will be stuck with the job they did.

Sometimes there may be an issue involving the body shop repairing your vehicle with used parts. Again, this will depend on whether you are going through the at-fault party’s insurance or your own.

If you are going through the at-fault party’s insurance, their policy is required to put your car back into the same condition it was in prior to their policyholder crashing into you. Since your car had used parts on it prior to the collision, it is acceptable for the shop to use used parts in the repair of your vehicle.

If you are using your own insurance policy for the repairs, however, there is likely a provision in your policy that “like kind and quality” parts be used. This means that they should use OEM (Original Equipment Manufacturer) parts. You should insist upon this in your repair. If your insurance company will not pay for the OEM parts, and instead insist on using “aftermarket” (made by a different manufacturer) parts, you should obtain from your insurance company a written warranty of those parts for the duration of the time that you own your vehicle.

You may also come across an issue relating to supplemental repairs. In this situation, the insurance carrier is also responsible for payment of supplemental estimates or repairs that are found once the car is dismantled.

7. What about payment for the repairs?

The insurance company will normally send the check to the body shop for repairs to your vehicle. The body shop will not release your car until the bill is paid. Remember that any delay by the insurance company in paying for the repairs adds to your loss-of-use claim.

8. What if my vehicle is deemed a “total loss”?

A “total loss” estimate occurs when the cost to repair the vehicle is more than the fair market value of the car. When this occurs, the insurance company must pay the fair market value of the car only. They are not liable for any loss of value due to the vehicle being in a collision.

If you are making payments on the car, then the bank has a lien on the vehicle and they are entitled to be paid the balance you owe on the car directly from the insurance company. If you own the vehicle outright, however, you are entitled to payment of the fair market value of the car directly from the insurance company.

In this era of instant access to information, the value of a car is easily determined in the open marketplace. The year, make, model, and features of the car are simply put into a computer program where every similar car offered for sale in the area can be easily ascertained.

If you have extra features or additions on your car, for example oversized tires or custom wheels, you may be entitled to the value of these aftermarket parts, but you should have a receipt or credit card statement to prove what you paid.

It is difficult nowadays to negotiate much on value, but do your homework and always try to negotiate for more than the insurance company is offering.

9. What if I owe more on the car than it is worth? (Gap Insurance)

Gap insurance pays for the difference in depreciation of the car and what is owed to the bank. For example, if the fair market value of the car is $18,000 and you owe $25,000 on the loan, the at-fault party’s insurance is only obligated to pay for the then fair market value of the vehicle. You would still be responsible to the bank for the $7,000 difference. If you have gap insurance, however, your insurance company will cover that difference to the bank. If you don’t have gap insurance, add it to your policy. It is cheap and a good value.

10. Final Thoughts

You are not required to use  the body shop recommended by the insurance company to fix your car. Insurance Code Section 758.5 (d)(2) states that an insurer who suggests or recommends that your car be repaired by a specific shop cannot limit or discount the repair costs based on charges that would have been incurred had the vehicle been repaired by the insurance company’s chosen shop. In short, if you take it to your body shop, the insurance company still must pay all reasonable costs of repair. See Carsen v. Mercury, 210 CA 4th 409.

Also, the body shop may repair your car with used parts as long as it is restored to its pre-accident condition, both mechanically and cosmetically. Ray v. Farmers Insurance Exchange (1988) 200 Cal App 3d 144.