MY CAR WAS WRECKED IN AN ACCIDENT? WHO IS GOING TO PAY FOR IT?
Well, that depends. Depends on what, you say? Depends on whose fault the accident is, whether you and/or the other car have collision or property damage insurance, and depends on how quickly you want your money.
The Basics
After an accident, you are required by New York State law to file a report called an MV-104 accident report if anyone was injured in the accident, or if your vehicle caused or sustained over $1,000.00 in damages. It is always best to consult with a lawyer before completing any forms, as an ambiguous word, sentence, or diagram, even written innocently, can affect the whole outcome of a claim.
As a practical matter, you should always take an abundant amount of photographs of your vehicle. Not only the damaged part, but other parts as well as the inside of the vehicle and the odometer (mileage). This will help document the overall condition of the vehicle, not only the damaged part. In the old days when you would have to pay for film, film development, and printing, photos were taken sparingly. However, everyone has a cell phone these days and it's best to take photos and videos right at the scene if possible, and the more the better. Better to have too many than too little. You never know what is going to show in those photos.
Always report the accident to your insurance company, as your insurance agreement requires you to do so. We usually prefer to report the accident for our clients if they hire us soon after the accident. This ensures that a claim number is issued, the facts of the accident are accurately conveyed, medical payments are made and we set up the property damage claim. We also report the accident to the other insurance company and set up the claim accurately with them as well.
But How About the Property Damage Claim?
Should you make the claim for damage to your vehicle against ‘your’ car insurance company or the ‘other cars’ insurance company?
There are several things to consider. Let us start off with the claim against your own insurance company.
1. Whose fault was the accident? If the accident was your fault, you almost certainly would want to make the property damage (vehicle damage) claim against your own company? Why? Because the insurer for the other vehicle will only be willing to pay for their client’s proportional share (fault) for the accident. If the other car was not at fault at all, their insurance company is likely not going to make an offer to settle your property damage claim. If their driver was partially at fault, let’s say 25%, they will only want to pay 25% of your property damage claim. If your car was towed and is in storage, they would likely only pay 25% of that bill as well. As an example, let's say that you made a left-hand turn in front of an oncoming vehicle and failed to yield the right on way and struck the driver's side door of the oncoming vehicle. Their insurer might say that you were 100% at fault for not yielding the right of way and would pay you nothing, or might agree that their client was 25% at fault while assessing 75% of the fault against you, and offer only 25% of your damages. Even if the accident was equally the fault of both drivers, 50%-50%, they would only offer you 50% of your property damage and so you will be out 50% of the cost of the damages.
So in this case you would likely want to get your property damages (vehicle damage) paid by your own insurance company. So what are the advantages and disadvantages of going through your own company (often called ‘first party’ benefits)? Well, the first thing you have to determine is whether you have the type of coverage which would enable you to make the property damage claim against your own insurance company. If you have a new or fairly new car, or a car under a current lease, then you almost certainly do have the coverage. This coverage is called ‘collision’ coverage and enables you to receive the entire amount of your vehicle damage up to your coverage limit (of course there is an exception which will be discussed shortly), minus the amount of your deductible. The advantage is that your percentage of fault, even if it's 50%, 90%, or even 100% will not be taken into consideration by your own insurance company.
Deductibles: Most “collision” coverage policies have a deductible, often $500.00, $1,000.00, or more. This means that if your car repairs will cost, for example, $8,000.00 and you have a $1,000.00 deductible, your insurance company will pay $7,000.00 towards the property damage claim and you will have to lay out the $1,000.00 difference. There is good news, however. If you are not totally at fault, your insurance company will make a claim for you against the other cars insurance company for your deductible and if they recover all or part of your deductible (often through what is called ‘subrogation’ and ‘inter-company arbitration’), you will receive a check or a credit (depending on the company) for the amount they recovered from the other insurance company.
Another advantage of going through your own company is time. After an accident, you want to get your vehicle damage claim resolved as soon as possible. The insurer for the other car is usually not in a big rush. They have to obtain the police report, speak with their driver and any passengers in their car, and witnesses listed on the police report, and then have to schedule an appraiser to come to see your car. Once all of that is done, they calculate a percentage that they are willing to pay the settle your property damage claim. If the other car is 100% at fault for the accident, then pursuing the claim against the other insurance company might actually be better and this will be discussed later. In this case though, where the other car is NOT 100% at fault, you can usually get your vehicle damage claim resolved quicker by going through your own company, which does not need to do an investigation, and only needs an appraisal before resolving your claim. In fact, New York Insurance Regulation 64 was designed to assure a prompt and fair settlement of your vehicle damage claim. It requires your insurance company to:
Inspect your vehicle and make a ‘good faith’ offer within six (6) business days of receiving notification of the accident;
Promptly give you a detailed estimate of the cost of repairs;
Provide you with a local shop that will perform and guarantee the work and cost of the repairs if you request this;
Make a payment to you within five (5) upon the agreed vehicle damage settlement.
Exceptions
So here are some exceptions:
Well, first of all, you can only make this claim against your own insurance company for the vehicle damage if you have “collision” damage coverage on your vehicle. As discussed earlier, if you have a new or fairly new car, or a car under a current lease, then you surely do have the coverage. However, if your car is eight, ten or fifteen years old or older, as an example, you might not have this coverage and if you don’t have any such coverage, you can only make the claim against the other cars insurance company and then, as previously discussed, will need to fight or negotiate with the other insurance company for a settlement, taking into consideration your percentage of fault versus the fault of the other vehicle.
Another exception, irrespective of which company you make the claim against, is the cost of the repairs, as weighed against the actual cash value of your vehicle. An insurance company is only obligated to pay the lesser of the cost of repairs versus the actual cash value (retail value plus sales tax, subject to depreciation value). So for example, if you have a 2012 vehicle worth $11,500.00, but the cost of repairs would be $14,000.00, the insurance company can ‘total’ your car, declaring it a ‘total loss’ and base their payment on the lower, value of the car. Very often a person will have a 20-year-old car, which runs nicely and is the only means of transportation for a family. The car may only be worth about $3,500.00 but means the world to them. After an accident, the cost of repairs would far exceed the value of the vehicle and so the insurance company will declare it a ‘total loss’ and pay only $3,500.00 (or less if the claim is against the other insurance company and there are split percentages of fault). Since there is no way to get a comparable car for that amount, you lose out big time.
A third, and worse case exception is if the other car has no insurance at all, and you have no ‘collision’ coverage either. In New York, there is a mandatory requirement of insurance and this would include mandatory property damage insurance to cover damage to another car or property (like hitting a light pole). However, not everyone follows the law and people continue to drive even after canceling or having their policies terminated. If you are the unfortunate victim of such a vehicle, and if you do not have your own ‘collision’ coverage, you will not have any recourse against an insurance company and could only hope to sue and recover your vehicle damage from the actual other individual involved in the accident. If he or she is not wise enough to keep insurance on their car, there is a chance that they would not have the money to pay for your vehicle damages even if you win a lawsuit against them. As an aside, this would NOT affect your ability to pursue a personal injury claim if you were injured, even if the other vehicle had no insurance, as there are other sources of compensation for personal injuries even if the other car has no insurance.
So when do you make the claim for property damage against the other car's insurance company?
If the other car is 100% at fault for the accident, then it makes sense to make the claim against the other car’s insurance company because there are issues no which would slow down the claim or prevent the other insurance company from paying you 100% of your claim. They will still appraise the car, and determine whether the cost of repairs is higher than the actual cash value of the car and they will still pay you the lesser of the two. However, the other vehicle's insurer does not consider the deductible at all and so they will pay 100%. They will also usually pay 100% of the cost of your towing and 100% of the cost of the storage at the body shop until they appraise the car. So our general rule of thumb is that if the accident was 100% the fault of the other vehicle, and they have insurance coverage, it's usually best to make the claim against the other insurance company.
So after all of this, why do you need a lawyer?
As you can see, there are different issues and different policies and coverages to consider. If you’ve been injured in a motor vehicle accident and if you retain our firm, we gladly take all actions to resolve your vehicle damage claim. We will contact both insurance companies, find out the policy particulars and limits, help arrange for a rental car if needed, get the car appraised, negotiate the percentages of liability to get you the best property damage settlement and the fastest property damage settlement possible, and arrange for you to get your check—and best of all, in our non-litigation cases, this is all FREE, as a courtesy to our clients. We don’t charge our clients the usual “one-third” fee for resolving the property damage claim unless the claim results in court litigation, or unusual complications, which are extremely rare.
Our office, The Law Office of Steven R. Smith has been representing injured people in New York State for over 30 years. We take every case personally and give our fullest attention to every detail of the claim and every need of our client. Whether it's medical treatment cost, lost earnings, vehicle damage, transportation costs to the doctor, or prescription medication, we assist our clients in getting every benefit that they deserve. And of course, we have a track record of getting maximum results for our clients. If you have a case for us to handle for you now, or if you would like to discuss or get more information about the subject of this article, please feel free to call us or email us to get more information. We hope this article was informative and useful.