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What Do I Do if My Vehicle is Damaged in an Automobile Accident?

Steven Kluender
Written by: Steven Kluender

Q:        Can I get a rental vehicle while my automobile is being repaired?

credit: AdobeWe always try to get the insurance company to pay the cost of a rental vehicle while yours is being repaired.  The problem is that the other driver’s insurance company is not going to accept payment for a rental car until they are convinced that their insured is at fault, and that may be a time-consuming process.  You have the option to pay out-of-pocket for your rental, and then seek reimbursement from the opposing insurance company if you are not at fault.  But until liability is determined, the other driver’s insurance company will not agree to reimburse you for a rental vehicle.  With that in mind, you may want to purchase rental coverage as part of your own auto insurance policy.  Virtually every insurance company offers it for a fairly small premium.  Often the simplest way to obtain a rental vehicle is to use your own insurance policy.

You still have to keep in mind that whichever insurance company pays for the rental as they will only cover it for a specified time period.  Typically, you are allowed to rent a vehicle until your car is repaired, or until the insurance company issues you payment in the event your car is declared a total loss.  Once the insurance company pays for the total loss of your vehicle, your entitlement to a rental car is over, whether you found a replacement car, or not.  If you get a rental under your own policy, you could inquire about a reasonable extension of the rental if you foresee a delay.

 

Q:        What if I owe more on my loan than my car is worth?

Tough problem.  The insurance company is only required to repair your vehicle, or in the event your car is declared a total loss, it must offer what is known as fair market value.  The fair market value for your car is the amount of money you would receive for your car in the open market, not necessarily what you owe on it.  In many circumstances, unless you made a big down payment when you bought your car, the fair market value will be less than what you owe on your loan because of depreciation.

You frequently have the option of purchasing gap insurance as part of your vehicle insurance policy, which is designed to cover the difference between what you owe on your car and the declared fair market value.  Without gap coverage, you may find that you will still owe money on a vehicle even after it has been towed to a junk yard.  This area of the law is not favorable to accident victims and may seem unfair.

Q:        Should I take my car to the insurance company’s repair facility to get it fixed?

You are free to have your car repaired anywhere you choose. But, although you are not required to use the insurance company’s repair facility, you may find that a pre-approved location will streamline and expedite the process of repairing your vehicle. Keep in mind that an insurance company is only legally obligated to pay for repairs that are reasonable.  In situations where the repairs actually exceed the estimate, you will have a lot easier time getting those extra costs paid for if the repairs are being performed at the insurance company’s own facility.

Q:        Am I responsible for storage charges?

Typically, yes.  As I suggested earlier, it may take days, or even weeks, before the insurance companies complete their investigations to determine who is at fault.  If your car is taken to a municipal storage lot, storage fees begin accruing immediately, and they are costly.  For that reason, it is critical that either you, or a person you authorize, retrieve your vehicle and personal items from storage as soon as practicable.  Even if the other driver’s insurance company accepts responsibility for the accident, it won’t automatically assume all storage costs, particularly those costs that could have been avoided with prompt attention.

If you have collision coverage through your own insurance policy, you can authorize your insurance company to move your vehicle to a location that doesn’t charge fees.  But if your car has been sitting in storage for awhile, your insurance company will need to pay the existing storage fees in order to have your car released.  If you transfer the vehicle yourself instead of having the insurer tow it, you can request that your insurance company reimburse you for the storage costs.

As a practical matter, if your car is taken to a repair facility that ultimately performs the repairs, the facility will often waive its storage fees since they will be able to make money on the repair services.  The possible downside, though, is if your vehicle is determined to be a total loss and not repairable, the repair facility will likely want compensation for storing the vehicle until the time it is removed.

Q:        Will I need to transfer my auto title to the insurance company if my vehicle is considered a total loss?

Yes.  With its payment to you for the total loss of your vehicle, the insurance company is buying your damaged vehicle from you. You will need to transfer the title to the insurance company so it can auction off the vehicle for salvage value.

If you still owe payments on your vehicle, your vehicle finance company must also release its interest in your car, which will require either you or the insurance company to pay off the balance owed.  If the balance owed is less than the fair market value of your car, the insurer will pay off the finance company and you will receive any money that remains.

Q:        Will I lose my insurance deductible?

If you use your own insurance company to pay for the damages to your car, your insurer will attempt to get reimbursed from the opposing insurance company, including your deductible. But you won’t see your deductible until your insurance company is able to recover those funds from the opposing at-fault insurance company.

In situations where the property damage aspect of your case is not resolved amicably between the insurance companies, we will include your deductible in the overall damages related to your case.

Q:  Should I take my car to the insurance company’s repair facility to get it fixed?

You are free to have your car repaired anywhere you choose. But, although you are not required to use the insurance company’s repair facility, you may find that a pre-approved location will streamline and expedite the process of repairing your vehicle. Keep in mind that an insurance company is only legally obligated to pay for repairs that are reasonable.  In situations where the repairs actually exceed the estimate, you will have a lot easier time getting those extra costs paid for if the repairs are being performed at the insurance company’s own facility.

Q:        Am I responsible for storage charges while I’m waiting to learn whether my vehicle can be repaired?

Typically, yes.  The other driver’s insurance company is not going to accept responsibility for any payments until they are convinced that their insured is at fault, and it may take days, or even weeks, before the insurance companies complete their investigations to determine who is at fault.

If your car is taken to a municipal storage lot, storage fees begin accruing immediately, and they are costly.  For that reason, it is critical that either you, or a person you authorize, retrieve your vehicle and personal items from storage as soon as practicable.  Even if the other driver’s insurance company ultimately accepts responsibility for the accident, it won’t automatically assume all storage costs, particularly those costs that could have been avoided with prompt attention.

If you have collision coverage through your own insurance policy, you can authorize your insurance company to move your vehicle to a location that doesn’t charge fees.  But if your car has been sitting in storage for awhile, your insurance company will need to pay the existing storage fees in order to have your car released.  If you transfer the vehicle yourself instead of having the insurer tow it, you can request that your insurance company reimburse you for the storage costs.

As a practical matter, if your car is taken to a repair facility that ultimately performs the repairs, the facility will often waive its storage fees since they will be able to make money on the repair services.  The possible down side, though, is if your vehicle is determined to be a total loss and not repairable, the repair facility will likely want compensation for storing the vehicle until the time it is removed.

Q:        Will I need to transfer my auto title to the insurance company if my vehicle is considered a total loss?

Yes.  With its payment to you for the total loss of your vehicle, the insurance company is buying your damaged vehicle from you. You will need to transfer the title to the insurance company so it can auction off the vehicle for salvage value.

If you still owe payments on your vehicle, your vehicle finance company must also release its interest in your car, which will require either you or the insurance company to pay off the balance owed.  If the balance owed is less than the fair market value of your car, the insurer will pay off the finance company and you will receive any money that remains.

Q:        Will I lose my insurance deductible?

If you use your own insurance company to pay for the damages to your car, your insurer will attempt to get reimbursed from the opposing insurance company, including your deductible. But you won’t see your deductible until your insurance company is able to recover those funds from the opposing at-fault insurance company.

In situations where the property damage aspect of your case is not resolved amicably between the insurance companies, we will include your deductible in the overall damages related to your cases.

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