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Solomon Law SC

III. REPAIRING A VEHICLE

WHAT IF MY VEHICLE CAN BE REPAIRED?

A motor vehicle is repairable if the cost of repairs and supplemental claims are less than 75% of the pre-accident fair market value.

MUST I USE THE DRIVE-IN FACILITY OF THE INSURANCE COMPANY?

Many insurance companies have “drive-in” claim service facilities. However, they cannot require you to use their facilities. If you voluntarily utilize their drive-in claim service this will not prejudice your right to obtain independent appraisals and negotiate settlement on the basis of such appraisals.

HOW MANY ESTIMATES SHOULD I GET?

You should get two repair estimates. If the adjuster insists that you obtain more than two, then the insurance company must pay for the others.

Sometimes adjusters will have you obtain estimates and then make an offer over the phone. If you do not agree with the phone offer, and if the adjuster has never seen the damaged vehicle, you can require that the adjuster or the insurance company’s appraiser personally inspect the damaged vehicle.

If the adjuster accepts liability and advises you to have your vehicle repaired with the understanding that the insurance company will reimburse you, then you should request from the adjuster a statement in writing to that effect along with any and all other verbal agreements you and the adjuster have agreed on.

AM I ENTITLED TO DEPRECIATION IN VALUE OF MY VEHICLE?

Everyone would agree that a wrecked and repaired vehicle is worth more than the same vehicle if it had not been wrecked and repaired. The difference between these two situations is called Depreciation or Diminished Value. Depreciation value is the amount of money that considers the reduction in your car’s fair market value caused by it being damaged in a collision, even if it’s fixable or has been repaired. It reflects the lower value of a repaired car compared to a similar one that hasn’t been damaged. In simple terms, it’s the loss in value on top of the repair costs.

Depreciation is a bit tricky and not straightforward. The extent of depreciation depends on how severe the damage is. Minor damage might not result in depreciation, but the more serious the damage, the more likely there will be depreciation. When talking with the adjuster, it’s important to insist on getting depreciation accounted for. The truth is, a car’s value can drop significantly just because it was in a crash. Most adjusters won’t bring up depreciation on their own, so it’s something you should bring to their attention.

In determining the Depreciation Value of your vehicle, it may be helpful to ask a local dealer to give you an opinion, or use an online car buying service that gives an “instant quote” and change the information you input by submitting the vehicle once as having no damage, and a second time as having been in a collision but repaired. But remember, there’s no fixed formula for calculating depreciation, but it typically runs between 10% to 20% of the repair bill.

Here’s something to be aware of: if your car is less than five years old and the damage exceeds 25% of its fair market value, you will be required to disclose this to any future buyer. This disclosure will likely affect how much someone would be willing to pay or offer as a trade-in value for the car, so make sure that the insurance company pays you for depreciation in value.

DO I HAVE A CHOICE OF REPAIR FACILITIES?

Often adjusters will recommend that you use a particular repair service. You are not obligated to use the insurance company’s recommended repair services, and the adjuster is obligated to tell you that. You may use any repair service you choose. However, it is a good idea to make sure the repair service you choose is aware that an insurance company is paying the repair bill in case there is a disagreement on the scope or cost of repairs necessary.

SUPPOSE SOMETHING GOES WRONG AFTER REPAIRS ARE MADE?

IIf you sign a release involving a repair to your vehicle, that release does not bar you from later asserting a claim for damage to the vehicle that was unknown to you or the adjuster at the time you signed the release. As long as the discovered damage was caused by the collision, and this damage could not be determined or known by you or your adjuster until the repair or attempted repair of your vehicle, you may file a claim for additional damage. You will typically have 30 days after the repairs to assert the claim for additional damage. If you discover additional damage to your vehicle after it has been repaired, return to the repair service to advise them of your discovery and they will likely resolve the issue with the insurance company for you.

If you sign a release involving a repair to your vehicle, that release may bar you from later asserting a claim for diminished value (depreciation). Make sure that whatever you sign excludes claims for damages outside of the cost of repair (such as rental reimbursement and depreciation value caused by the collision).

WHO GETS THE REPAIR CHECK?

IIf your car is financed, the insurance company will write the check in your name and the name of the repair facility. This is because the damage to the vehicle reduces the value of the car, which means the finance company’s lien rights are also diminished.

Therefore, the finance company will always require that the damaged vehicle be repaired so its interest in the vehicle remains protected. If your vehicle is not financed you get the entire check, and the decision of whether to actually repair your vehicle is entirely up to you (although your vehicle must be safe to drive on the public roads if you do not get it repaired).

AM I ENTITLED TO A RENTAL VEHICLE DURING REPAIRS?

If your car is inoperable after a crash, you have the right to a rental car from the time of the accident until the vehicle is repaired. Once your vehicle is repaired, the insurance company is no longer responsible for your rental.

Typically, the insurance carrier will provide you with a rental vehicle that is similar to your damaged car. If you had a compact car, you will likely get another compact car. If you drive a four-door sedan, you should get a similar sedan. Many insurance companies have partnerships with rental companies, making it easy for them to arrange a car for you at a reasonable cost, which they’ll cover. The insurance company will cover the daily rental fee but won’t include additional insurance, mileage, or gas (anything that would normally be your responsibility anyway). This might be an issue since rental companies typically require your debit/credit card information as collateral for you renting the vehicle.

It is crucial to contact the insurance company promptly so that you are not without a vehicle any longer than necessary. However, some insurance companies won’t honor your claim unless their insured (the at-fault driver) reports it first. If they won’t provide a rental, you might have to rent a car at the regular market rate. Make sure to keep your receipts for reimbursement. When the insurance adjuster contacts you, ask what to do about continuing with the rental. You might be instructed to return the rental and get one from the company they usually work with. In this case, the insurance company should cover the initial rental cost until you’re in a more affordable car.

If the insurance company won’t provide a rental car and you can’t afford a rental car, keep a log of how you had to be transported (taxi, Lyft, or Uber) and if other people transported you and whether you had to pay them. However, the insurance company only has to pay you what is reasonable and necessary as a result of the collision and until your vehicle is repaired and operable.