Car Accident Property Damage Settlement Guide
Your car, your motorcycle, and your bicycle all have monetary value. Not just in terms of dollars, or what you’ve paid for it. Much of the value in your property lies in its utility, convenience, and means to earn wages or equity. Car accident property damage after an accident isn’t just “dollars gone”- it is potentially the loss of your mode of transportation.
In a sprawling city like Phoenix and its outlying suburbs of the East and West Valley, your ability to earn wages, run errands, pick up your kids from school, and activities centers around your car. It’s natural to feel attached to it.
When you first bought your car, you spent hours searching for the perfect car for you and your family. At the dealership, you slowly ambled a lap around the car, sliding your fingers on its gleaming smooth surface. As you took it for a test drive — savoring the new car smell — you decided it would be the centerpiece of your life and family. You may also have chosen your motorcycle for its convenience and efficiency in Phoenix’s heavy traffic or your bicycle for its environmental and cost efficiencies.
After months or years of driving your car, you feel you know your car — and your car knows you. You feel the same way if your motorcycle or bicycle is also your “daily driver”, your grocery-getter, and your transportation to and from work.
And then the unthinkable happens. You and your car get mangled in a wreck. You can no longer drive it. The insurance companies call it “car accident property damage” but it is so much more than that.
The bad news is the things we usually take for granted — the convenience, ease of getting around, transportation to and from work, shuttling your kids from one activity to another — are suddenly gone.
The good news, however, is there are steps to mitigate the disruption in your life caused by losing your car to an accident — one of which is to submit a car accident property damage claim to insurance.
What Is Car Accident Property Damage?
Covered by most auto insurance policies, physical damage to your vehicle is considered car accident property damage. Getting your car accident property damage claim opened does one of three things:
- Pay you for the cost of your car repairs; or
- Reimburse you for the cash value of the car if it cannot be fully repaired; or
- Pay you for the loss of its use while you are without it.
If your car was involved in an accident caused by someone else’s negligence, the at-fault driver has to compensate you for the repairs, pay you or provide you a rental car for the time you are unable to use it, and/or pay you the cash value of your car.
Aside from getting immediate medical attention after an accident, one of your priorities is to assess the car accident property damage.
Evaluating Car Accident Property Damage Extent
A strong way to prove your car accident property damage claim is to take photos of the car at the scene of the accident. Photos show the actual car accident property damage and indicate whether airbags had gone off and show any broken glass and other damaged car parts.
Determine whether you can still drive the car after the accident. Is the car accident property damaged badly enough that it is not drivable? Does it need to be towed to an auto body shop?
How to Choose an Auto Body Repair Shop?
Fortunately, you can get your car repaired anywhere you want provided they are licensed and their work is guaranteed for 90 days—and the insurer will stand behind the repair shop’s guarantee. If you don’t know which body shop to use, you can also request the insurer recommend a qualified repair shop convenient to your location.
The insurance company does need to agree on pricing with the shop of your choice. If they cannot agree, they will give you a list of licensed shops that can do the repairs for the price the insurer has set. If you are not satisfied with the repairs, you are entitled to bring your vehicle back to the auto shop and have it inspected within these 90 days.
Keep in mind that after a grace period, you may need to pay storage fees to an auto body shop or a storage facility. While your insurance company initially pays these costs on your behalf, they must give you three working days’ notice before they stop paying for storage.
Determining Car Accident Property Damage Repairability
After evaluating the car accident property damage to your vehicle, the insurance company has the option of repairing your vehicle, replacing your vehicle, or reimbursing you for the vehicle’s actual cash value (ACV). Actual cash value is the amount your vehicle would have sold for on the date of the accident.
If the cost of repairs is substantially less than the ACV of the car, the at-fault driver’s insurance will cover those repairs. However, if repair costs are close to or greater than the car’s value, the insurer will not repair your car. They will elect to replace your vehicle or reimburse you for the ACV in those instances where the vehicle is economically impractical to repair. This is called a totaled car.
Motor Vehicle regulations stipulate that a vehicle is considered economically impractical to repair if the cost to repair the vehicle equals or exceeds the vehicle’s ACV.
In most cases, an insurer will deem your car a “total loss” if the cost of repairs is more than 70% of the value of your car. The reason for this is when the shop starts repairing your car, additional hidden damages are often found. Such extra damages would render the vehicle a total loss by definition.
Insurance Coverage of New Parts for Car Accident Property Damage Repair
No. The insurer is only obligated to restore your vehicle to the same condition as it was before the accident.
Sometimes they use original equipment manufacturer (OEM) parts and other times they use aftermarket parts—parts made by a manufacturer other than the original manufacturer.
If your vehicle is being repaired with newer parts, the company doesn’t have to pay for this “improvement.” For example, if your car’s transmission is five years old, the insurer only needs to replace it with a five-year-old transmission. If a five-year-old transmission can’t be found, the repair shop could use a new transmission, but you’d have to pay the difference between the value of a five-year-old transmission and a new transmission.
Do I Have to Accept Non-OEM Parts?
No. Although Arizona regulations do allow aftermarket parts as long as they are warranted by the manufacturer to be of like kind and quality as OEM parts, you don’t have to accept them.
The final choice is yours. But if the insurer wants to use non-OEM parts and you decide to use more expensive OEM parts, you may have to pay the cost difference.
The regulations also require the insurer to indicate on the appraisal which parts are aftermarket parts and pay for any modifications necessary.
Dealing with Car Accident Property Damage When Your Car is Totaled
If your car has been totaled–or deemed a “total loss”–the other driver’s insurance company must pay you the “actual cash value” (ACV) of the car before the accident. The ACV is based on what comparable vehicles are selling for in the Chandler 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.
But you don’t have to accept the first offer you get from an insurance company based on its calculation of the ACV. Instead, you can do your research using Edmunds or Kelley Blue Book. If the KBB values your car higher than what insurance offered, you can make the case that your car is worth more than the 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.
Vehicle Upgrades Cost Recovery in Car Accident Property Damage Settlement
Possibly. You may have added upgrades to your vehicle such as brand-new wheels, tinted windows, a custom paint job, an upgraded stereo, a built-in DVD, Bluetooth, GPS, etc. All these upgrades add value to your car. For example, the following features add value to your car:
- Brand-new or high-end tires
- Custom wheels and rims (such as alloy wheels)
- Custom paint or trim (or a new paint job)
- An upgraded stereo system
- Satellite radio
- In-car GPS
- In-car Bluetooth
- In-car DVD
- Back-up cameras
- Leather upholstery or trim
- Heated or air-conditioned seats
- Upholstery that’s been kept covered and is like new
- New headlights
- Tinted windows
- Performance suspension packages
- Sunroof/moonroof
- For trucks, things like bed liners and tow kits
However, there is an important caveat. You will have to provide proof that you paid for these modifications. You can try to get compensation by including receipts or invoices in your claim.
Unfortunately, aftermarket parts on a vehicle do not necessarily increase the overall value of the vehicle. Thus, an insurance company may initially offer you zero.
If you can produce a receipt or invoice that’s less than a year old, you improve your odds of recovering at least part of your upgrade expenses. If you can recover 50% of these costs, you’re doing well.
According to the Specialty Equipment Market Association, the average consumer spends about $2,000 on options or modifications during the first year after purchase. You can try to recover at least part of this investment.
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.
Securing Additional Compensation for Car Accident Property Damage
Getting your car accident property damage claim fulfilled doesn’t stop at simply reimbursing you for the value of your car or its repairs. You are entitled to additional compensation for those extra costs you had to pay as a result of losing your car for a while.
If the accident wasn’t your fault, the other driver should compensate you for:
- The cost of a rental car for you to drive while your car is being repaired or replaced.
- The cost of towing your car away from the accident scene.
- The cost of storing your car until it can be repaired or disposed of.
- Other car accident property damage to personal property in or on your vehicle (such as a bike in a bike rack).
- The value your car lost because of the accident.
The costs of the first four bullets above are easy to calculate, or simply a matter of digging up your receipts or invoices. But the last point about the lost (diminished) value of your car is understandably vague, so we’ll expand on that below.
Handling Car Accident Property Damage When Another Driver is Uninsured or Underinsured
If you’re dealing with an uninsured or underinsured driver, 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.
You should get an appraiser to determine the true value of your car. It would be best if you hire your appraiser from a third party rather than using the appraiser suggested by your insurance company. This way you will take comfort in knowing the appraisal will not be biased in favor of your insurance company.
According to the appraisal clause, if you and your insurance company can’t agree on the fair market value of your car, you can always submit the dispute to binding arbitration.
Reclaiming a Totaled Car and Understanding Car Accident Property Damage
You may request to get the car back even after it has been totaled, but the insurer may not grant your request.
Once the total loss is settled, the insurance company assumes the rights to your car and can dispose of it however they wish, including selling it or its parts for salvage. They can, at their discretion, let you keep the car and let you try to salvage it yourself. If the insurer lets you keep your car, they will deduct its salvage value from your total loss settlement. In this case, you have the option to restore and/or sell it.
However, by Arizona law, any car that had been deemed a total loss by an insurance company must have a salvage title. You can get a salvage certificate from the Arizona Motor Vehicle Department (MVD) and register your car as a salvaged vehicle.
Once the necessary repairs are complete, the car would need to be presented to the MVC for a special inspection before it can be deemed fit to drive on public roads.
Keep in mind that some insurance companies may offer limited or no insurance for a car with a salvage title.
Addressing Car Accident Property Damage in Totaled Vehicle Loan Balance Scenarios
You can use the insurance cash payout to pay down the balance of your loan.
If the cash value of your car is more than the balance of your loan, you can fully pay off your car note once insurance sends you a check for the fair market value of your car. Unfortunately, in some cases, especially if your car is new, the loan balance will be higher than the insurance payout. In these scenarios, gap insurance can help you cover this shortfall.
Gap insurance is also known as loan-payoff coverage, which can protect you financially, particularly if your car is new and you are making car payments on it. If a total loss occurs, gap insurance will pay you the difference between the actual cash value of your car and the outstanding balance on your car loan.
For example, in a total loss situation, if the insurance pays you an actual cash value that is less than what you own on the car loan, you’re left with a financial shortfall—or a “gap”—in the amount that you still owe.
Gap insurance protects you from this financial shortfall.
For example, if your totaled vehicle was worth $18,000 at the time of the accident, but you still owe $20,000 on the loan, your gap insurance will pay you $2,000 to cover this “gap.”
Get Compensation for your Car Accident Property Damage
At Phoenix Accident and Injury Law Firm near you, we have more than 15 years of experience helping clients obtain compensation for their personal injuries and car accident property damage in the Phoenix area. When you’re ready to talk, please contact our office to arrange a free initial consultation by phone or at our Chandler office, conveniently located near you.
If you have been in an auto accident and need help reclaiming your car accident property damage costs, contact Phoenix Accident and Injury Law Firm in nearby Chandler, AZ to speak with an experienced personal injury attorney. We provide personal injury legal services to clients in your area including Chandler, Gilbert, Mesa, Scottsdale, Tempe, and Peoria.
