More Than You Ever Wanted to Know About Property Damage

If you've ever been involved in a car accident, you know that the battle with the insurance adjuster is often fought on two separate fronts.  Unless you've gotten really lucky, you have the personal injury side of things, however you're almost always going to have the property damage to your car to consider, as well.  I base the bulk of my practice on Personal Injury claims, but I'll typically advise my clients to handle the Property Damage side on their own.  The question I always get asked is, why don't I handle Property Damage?

Well, technically I can handle Property Damage, and sometimes I do.  But there are three primary reasons why I think it's typically better for the client to handle that claim on their own.  First, Property Damage claims are normally far more straightforward than Personal Injury claims.  You don't have to deal with liens, subrogation, or causation in most settings.  Second, damages calculations in Property Damage claims aren't nearly as dynamic as they are in Personal Injury.  You're more or less dealing with a set amount that the damage is worth, and you're not getting into general damages like pain and suffering the way you would in Personal Injury.  If I'm handling Property Damage at our normal contingent rate, that will often result in the client paying me money that he or she needs in order to repair the car; that's something I want to avoid whenever possible.  Finally, adjusters tend to be more relaxed and less guarded when they're dealing with a layperson as opposed to an attorney.  Once I make that first call or send my Letter of Representation, the adjuster is going to get more cautious and a whole lot less expeditious in handling the claim.  

Given that most folks have no experience dealing with insurance adjusters, it's common that clients get intimidated at the prospect of handling their own property damage claims.  So!  I thought it might be helpful to go over some of the common problems that arise in Property Damage claims, as well as a few tips for resolving these issues.  Ready?  Here we go!

1. The settlement offer is insufficient to pay off your loan.  I unfortunately see this one a lot.  The Actual Cash Value (ACV) of your car is $14,000, but you owe $18,000.  Since your car was totaled, the insurance company is using the ACV to calculate what your car was worth, which leaves you owing another $4,000 for a car that you can no longer drive.  Doesn't seem fair, right?  You might be surprised and disappointed to learn that this late in the game, there's really nothing you can do.  The one protective measure that you can take is to purchase GAP insurance, which pays the difference between the ACV and the balance of the outstanding car loan.  However, you have to purchase GAP insurance before a loss occurs, meaning that if you don't have it when your car is totaled, then you're too late.  Moral of the story?  Purchase GAP insurance when you initially finance the car.

2.  The adjuster Is telling you which repair shop to go to.  You've been going to Kermit's Body Shop for years, but the adjuster is insisting that you have your car repaired at Ms. Piggy's.  Are you obligated to comply?  The short answer is no.  You can go to whichever body shop that you want to.  The flip side of the coin, however, is that the insurance company is only obligated to pay the reasonable cost of repairs.  Their suggested body shop is probably going to be less expensive than yours, and the rates of that body shop are probably going to drive the insurance company's idea of reasonableness.  So you can get your car repaired by Kermit's for $500, but if Ms. Piggy's charges $400 for the same repairs, the insurance company is most likely going to offer you $400 and tell you to eat the other $100.

3.  Your car is racking up storage fees.  If your car is seriously damaged, it might be sitting in someone's storage lot somewhere, and chances are that storage isn't free.  You don't want to pay out of pocket, so can you let the car sit in storage until the insurance company pays out?  Maybe, but I wouldn't recommend it.  Whenever damages have been suffered (whether we're talking about a car wreck, a breached contract, or anything else) the plaintiff has an implied duty to mitigate damages.  That means that if there's anything you can reasonably do to minimize or prevent damages, you're obligated to do it.  So if you're able to get the car out of storage after two days, but don't do it for two weeks, you'll probably end up on the hook for those extra twelve days worth of storage fees.

4.  The insurance company wants your rental car returned before the repairs to your car are complete.  Or worse, the other driver's insurance is "contesting liability" and refusing to put you in a rental car at all.  This is probably the toughest issue that I see with any regularity in regard to property damage.  If the adjuster is denying or contesting liability, it's possible that your insurance might put you in a car and then try to work with the other driver's insurance to get compensated.  If liability is clear, but the adjuster is demanding that you return the car before repairs are completed, then the question really turns out who the adjuster is.  In a lot of situations, persistence can pay off.  You know how the squeaky wheel gets the grease?  Make sure to explain yourself and humanize the situation as much as you can.  Adjusters are people too, and most of them will have some sympathy if you're really in a bind.

5.  The insurance company is stalling on sending you a check.  In most cases, this happens when the car is (i) financed and (ii) totaled.  In this situation, the insurance company is essentially purchasing your totaled car from the entity that you've financed the car through.  In order to finalize the purchase, the insurance company needs to have the title transferred over to them, and they won't disburse your check until that's done.  Since transferring title isn't always the fastest process, sometimes getting a check can take a couple of days.

If you didn't know it already, reading this article should drive home that handling a property damage can be a pain in the neck.  Most of the time it's a fairly straightforward process, but at times it can get really aggravating.  If you have questions, then give us a call.  We're happy to help out any way we can.