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June
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I need some information about what to do about my damaged car?
If your car was damaged or “totaled” in a car accident that was not your fault, here’s how the process works:
In a perfect world, the at-fault driver’s insurance would quickly accept liability and make you whole again (putting you in the same position you were in before the accident) by paying for: a replacement car if yours was totaled or repair costs if it was only damaged, and covering all rental car costs while you’re without a car. Unfortunately, sometimes that doesn’t happen and this process may be delayed for numerous reasons such as a fight with your insurance company over liability or a coverage dispute with their insured. If the process is moving too slow with the at-fault driver’s insurance company, in most instances you can turn to your own insurance for swift payment and let your insurance seek reimbursement from the at-fault driver’s insurance company when things are sorted out.
Replacing a Totaled Car.
A vehicle is typically deemed to be “totaled” once the cost to repair it exceeds ~70% of the value of the car. There are two main methods that your insurance company may use to calculate the amount it will pay you for replacing your totaled vehicle. These two methods are referred to as “actual cash value” and “replacement value” and are discussed below. The method that your insurance company uses will depend on the type and terms of your auto insurance coverage. After your insurance company determines the amount you’re entitled to, they will write you a check, less what is owed on your car loan (your lender is on the title to your car also).
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What is Replacement Cost?
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This method is most favorable to you. It requires that your insurance company compensate you for what it actually costs to replace your car with another similar car of the same year, make, and model.
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What is Actual Cash Value?
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This method is the most favorable to your insurance company. Your insurance will compensate you for the replacement cost minus any depreciation. This is also referred to as market value; it represents what you could expect to receive if you had sold your car prior to the damage.
Repairing a Damaged Car:
If your car was not deemed “totaled” then you will need to have it repaired. Depending on your coverage, you may be able to choose the repair shop, however contact your insurance first as your policy might give them the choice. It is always best to deal with your own insurance company regardless of who was at fault for the accident. If the other party caused the accident your insurance company will seek reimbursement from the other insurance company.