Overview of Property Damage
No one wants to damage or lose their car in an accident.
But there is a way for you to get reimbursed for the value of your car or its repairs.
The steps are to assess the damage, find out how much it will cost to repair your car, and if your car is deemed a total loss, negotiate a fair market value for your car so you can get paid by the insurance company.
Assess the Damage
Aside from getting medical attention, one of your first priorities after an accident is to assess the damage on your car.
Taking photos of the damage will strengthen your case for a successful property damage settlement. Note any dents, scratches, broken glass, damage to car doors and other car parts, damage to the frame and whether the airbags had gone off.
Is the car undriveable, or somehow unsafe to drive? Does it need to be towed to an auto body shop?
Know the Cost of Repairs
Once your car is at the auto shop, a full damage assessment will begin. The shop will tally up all the required repairs. The insurer will compare the cost of repairs with the cash value of your car.
If your accident was caused by someone else’s negligence, the at-fault driver has to compensate you for the cost to repair your car. Usually the at-fault driver’s insurance company will cover those repairs.
But if the at-fault driver is uninsured or underinsured, your own insurance company will be paying for all or part of the repairs or replacement. In this case, you probably have an appraisal clause in your auto policy.
However, if repair costs are close to or greater than the car’s value, your car will be deemed a total loss.
My Car Was Totaled. Now What?
Most auto insurance companies will consider your car a total loss if the cost of repairs is 75%-85% of the value of the car.
If your car has been totaled, the other driver’s insurance company must pay you the “actual cash value” (ACV) of your car just prior to the accident.
The cash value is based on what similar vehicles are selling for in your area.
In theory, you should be able to take the money you’re given in an insurance settlement and buy another car similar to what you had before.
Accepting a Cash Offer From the Insurer
Most people take the first offer from the insurer after their car was totaled. It’s tempting to just keep your mouth shut and take the money.
But you don’t have to accept the first offer you get.
You can do your own research to determine the true value of your car. Use the Kelley Blue Book to look up prices of cars with the same make, model, year and condition. If the KBB values your car higher than what insurance offered, you can argue that they should increase their offer.
You can also see what local used car dealers are asking for similar vehicles and check car sale prices online. Keep in mind, however, that the offer price is not necessarily the sales price.
You may also be able to argue that your car is worth more than average for the make, model and year.
If the other driver doesn’t have enough insurance, and you and your insurance company can’t agree on the cash value of your car, you can submit the dispute to binding arbitration.
Little Known Secret: Upgrades Increase the Value of Your Car
According to the Specialty Equipment Market Association, the average consumer spends about $2000 on options or modifications during the first year after purchase. You can try to recover at least part of this investment.
If you’ve recently added vehicle upgrades like new rims, a custom paint job or in-car accessories, these do increase the value of your car and can be used to argue for a higher offer.
However, you will need proof that you paid for these additions, as long as none of these are aftermarket parts. You can try to get compensation by including receipts or invoices in your claim.
If you can recover 50% of these costs, you’re doing well.
You can also get compensated for any recent major repair or maintenance jobs on your car. But you’re probably not going to get insurance to pay for that oil change you had last week.
What If the Cash Offer Is Not Enough to Pay Off My Car Loan?
If you have an outstanding car note, you can use the insurance payout to settle your loan.
But if the loan balance is more than the insurance payout, gap insurance can help you cover this shortfall. This can protect you financially if you are still making car payments on it.
Here’s how it works: if your car is totaled and you owe more on the car than it’s worth, gap insurance will pay you the difference between the actual cash value of your car and the outstanding balance on your car loan.
However, if you do not have gap insurance, you are responsible for paying the difference out of your pocket.
Get Compensation for a Total Loss
If you’ve been involved in an accident in the Phoenix area due to by someone else’s negligence, the Thompson Law Firm can help you seek compensation for your car or its repairs.
You do not need to pay us because we work on a contingency basis. Only when you get paid, do we also get paid.
When you’re ready to move forward with your property damage claim, please contact our office to arrange a free initial consultation.