Your rights and options

1. Who will pay for my damage?
2. How much will be paid?
3. How many estimates must I get?
4. Must I accept used parts?
5. What if additional damage is found during repairs?
6. Is frame damage reparable?
7. Which shop should I choose?
8. Do I get substitute transportation?
9. Will my repaired vehicle be worth what it was before the accident?
10. How are Total Loss settlements figured?
11. What if I do not agree with the settlement being offered?

Who will pay for my damage?

A simple question that can have a simple answer. If you have Collision Coverage or Comprehensive Coverage on your own Auto Policy (depending on the cause of damage), your insurance company will pay for the damage to your vehicle regardless of who may have been at fault in the accident or incident (assuming you have not intentionally caused the damage yourself). Collision and Comprehensive Coverage covers damages sustained by your vehicle. This is the coverage that would be required by your lender if you have a lien on your vehicle. If you have a lien on your vehicle but do not have Collision and Comprehensive Coverage on your own policy, the lender will probably have purchased VSI (Vendor's Single Interest) coverage. In effect, this is Collision and Comprehensive Coverage that protects the interests of the lender only . . . not the owner/borrower. The most that would be paid out on VSI coverage is the lesser of either the cost of repair, the ACV (Actual Cash Value) or the remaining balance owed on the loan. Any equity you may have in you vehicle is not insured by VSI coverage. In order to protect your equity interest in your vehicle, you should have Collision and Comprehensive Coverage on your own auto insurance policy.

If you do not have Collision and/or Comprehensive Coverage on your own policy and the damage is the result of negligence of another, your only remaining option is to collect from the negligent party who caused the damage. Hopefully, that party will have Liability Insurance that will pay you on behalf of their insured. If another party is responsible for your damage but does not have insurance, your only remaining option is to pursue your claim against the negligent party personally.

If the responsible party does not voluntarily pay for your damages, you may have to pursue legal action against them. If your total damage is $5,000.00 or less (contact Justice Court or Small Claims Court in your area to verify their authority limit), you can utilize the services of Justice Court. A Justice Court action can be rather quick (less than 3 months), is relatively simple and can be pursued at a minimum of cost. If your damage is over the limit of Justice Court, you will have to bring your action in Superior Court which will be much slower and probably much more expensive (legal representation is recommended). The moral here is simple: if you can not afford to do without it . . . insure it!

If you are fortunate enough to have the option of collecting for your vehicle damage from either your own insurance company or the other party's insurance company, we recommend you utilize your own coverage. We make this recommendation for three reasons . . .

1. In most states, your insurance company can not increase your future auto insurance policy premiums for claims submitted which did Not involve negligence on your part.
   
   
2. Your own auto insurance policy affords you Rights that you do Not have in your dealings with they other party's insurance company. Chief among those rights is your access to a quick and cost effective process for resolving disputes. This will be discussed in greater detail in question #11.
   
   
3. In the event your vehicle is a legitimate candidate for a Post-Repair Diminished Resale Claim, you do not want to exhaust the coverage limits of the other party's insurance just for repairing your vehicle. Post-Repair Diminished Resale Claims are discussed further in question #9. If the repair of your vehicle even begins to approach $10,000.00, use your own Collision Coverage.

Using your own Collision Coverage may mean an investment on your part in an amount equal to your policy deductible. However, the other party's insurance company will probably be happy to pay you your deductible . . . up front! That would minimize the need for capital commitment on your part while still leaving your options open. Now that we have dealt with the "who" . . . let us now address the question of "How much".
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How much will be paid?

Generally speaking, the maximum that will be paid for damage to your vehicle will be the amount necessary to replace your vehicle with a comparable used vehicle (plus sales tax, title and registration fees). This is referred to as the vehicle's ACV (Actual Cash Value). An exception to this rule would be if you had purchased an RCV (Replacement Cost Value) endorsement as part of the Collision and Comprehensive Coverage on your own insurance policy. That would raise the maximum collectable to an amount necessary to replace your vehicle with a comparable new vehicle. These amounts would be collectable if your vehicle claim were to be resolved on a Total Loss basis.

If the damage is not severe enough to "total" your vehicle, you are owed whatever amount is required to return your vehicle to it's pre-loss condition. WARNING: If your vehicle is reparable, you need to be aware of DRP (Direct Referral Program) shops and "economy" (after-market imitation) body parts. DRP Shops have usually entered into an agreement with an insurance company whereby the shop will have agreed to 1) provide substantial discounts to the insurance company, 2) limit the scope of repairs as defined by an insurance company representative (sometimes hidden damage is left un-repaired) , 3) utilize parts and materials as dictated by the insurance company, and 4) back the insurance company in the event a dispute develops between the vehicle owner and the insurance company. In return for these concessions and support the insurance company "directs" repairs to that shop. We are not saying that DRP shops will do inferior repairs. We just want you to be aware of the underlying motives of an insurance company "referring" you to a specific shop or group of shops. Economy parts is a euphemism for after-market or imitation body parts. There is extensive evidence to show that these "economy parts" are substantially inferior in fit, finish, corrosion resistance and crash integrity. It would not be an exaggeration to say the future safety of your vehicle's occupants could be compromised if economy parts are used to repair your current damage. We strongly recommend against the use of economy parts. The use of economy parts are usually incorporated into the DRP shop agreements we referenced above. More potential problems will be discussed in question 7.
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How many estimates must I get?

The short answer is one (1). As you are the owner of the damaged vehicle, you have the right to select what shop will be making the repairs. In point of fact, you will probably not even have to get any repair estimates as most insurance companies have their own appraisers to evaluate the damage to your vehicle. What you need to do is make sure you have chosen a quality repair facility to do the work on your vehicle and then just let that shop deal with the insurance company.
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Must I accept used parts?

In short . . . yes! However, do not stop here. Read on to understand the "why", "when" and "what" that put limitations on used parts. Virtually every auto insurance policy I've ever read had an "LKQ" clause. L.K.Q. stands for Like Kind & Quality. While this means that insurance companies can pay for used parts in repairing your vehicle , this does NOT mean JUNK parts. If your four year old vehicle needs to have a door replaced that was in good condition prior to the accident, it would only be reasonable to replace the damaged door with an identical door in good condition. The operative word in the LKQ clause (for this discussion) is "quality". If your damaged door had soft, pliable and in-tact weather-strips, so should also the "used" door. If your damaged door had never been repaired before, you should not have to accept a used door that requires any repair to be usable. If an insurance company makes an allowance to replace your front end sheet metal with an "LKQ" assembly, an allowance should also be made for servicing the radiator, a/c condenser and replace the dryer and/or expansion valve so as to restore the functional reliability of these components. Used parts have a legitimate place in the repair of your damaged vehicle. JUNK parts have NO place in the repair of your damaged vehicle.

Junk parts have always been plentiful. However, the availability of good quality used parts has been unpredictable. This sporadic availability of acceptable used parts gave birth to a whole new option for insurance companies to save money versus having to pay for OEM (Original Equipment Manufacturer) replacement body parts. Now comes the "economy parts" industry. Economy parts are replacement body parts that are manufactured by someone other than the manufacturer of your vehicle. They are generally referred to as "imitation" body parts. They are of inferior quality and pose a potential hazard for future occupants of your repaired vehicle. These parts may be of like "kind" but are clearly not of like "quality" and you are not obliged to accept these parts (unless your policy gives decision making authority to the insurance company).

WARNING: some insurance companies have now begun to re-write their policies so as to give the insurance company the right to select the repair shop and dictate what parts will be used in the repair of their insured's vehicles. This is not usually disclosed when you purchase or renew your auto insurance. Be aware of this potential problem and review it with your agent. Read your policy. Don't find out too late that you have waived your rights and surrendered control to your insurance company.
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What if additional damage is found during repairs?

This is not an unusual situation and does not usually pose a problem. Quite often additional damage is found when the vehicle opened up. In this situation, the repairing shop will simply notify the insurance company who will probably send their appraiser back out to the shop to re-inspect the vehicle and reach an agreed price increase to repair this now disclosed damage. As long as your vehicle is being repaired by a shop whose ethics and reputation you can trust . . . you will not have a problem!
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Is frame damage reparable?

In a word . . . yes! Some frame damage is reparable. The operative word here is "some"! However, with the advent of "unibody" proliferation and HSLA (High Strength Low Alloy) steel, frame repair and frame component replacement has become a field of specialization. We now have very sophisticated diagnostic and repair equipment requiring specially trained technicians.

WARNING: If the repair to your vehicle involves frame damage, make sure the repairing shop has a dedicated bench , a MIG welder and a technician who is certified by "I-CAR" in frame repair and welding. The technicians certificate should be on file at the repair shop and available for your inspection.
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Which shop should I choose?

If you have been reading all the text that has appeared above, you are just beginning to understand how critical shop selection can be. You have the right to select the shop that will be repairing your vehicle. With that right comes responsibility. Do some homework! Remember, you are going to be driving your repaired vehicle . . . not the insurance company. Here are some things to consider when choosing a repair shop . . .

1. Shop should provide written warranty
2. Shop should not use "economy" parts
3. Ask to see "I-CAR" training certificates of technicians
4. Shop should have MIG welders
5. Shop should use "Weld-Through" primer
6. Shop should have a "dedicated bench"
7. Verify shop status with your State Chapter of the Collision Craftsman's Assoc.
8. Verify shop status with the Better Business Bureau
9. Tour the shop - check finished jobs and jobs in progress
10. Visit our Local Expert page.

Choosing the right repair facility will be critical to your safety, satisfaction and peace of mind when you get your repaired vehicle back. Take the time necessary to make the right decision.
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Do I get substitute transportation?

If you have Rental Reimbursement coverage on your own policy the answer is yes, regardless of who may have been at fault in the accident. If you do not have Rental Reimbursement coverage and the accident was your fault, the answer is no. If you do not have Rental Reimbursement coverage and the accident was the other party's fault and they have liability insurance, the answer is probably! You may have to front the rental expense on your credit card and then submit receipts for reimbursement. For add'l information on this subject, go to our Personal Injury Claims page and review "Resolving Your Rental Car Claim". If the accident was the other party's fault and they had liability insurance but you did not incur a rental vehicle expense, this does not mean their insurance company just saved some money. There is such a thing known as a "Loss-of-Use Allowance" whereby the insurance will pay you (typically $15.00 per day) for each day you had lost the use of your damaged vehicle.
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Will my repaired vehicle be worth what it was before the accident?

Probably not ! If your vehicle was substantially damaged in the current accident and has no history of significant collision involvement, you probably have sustained a post-repair reduction in the resale value of your vehicle. In most states you are entitled to be compensated, by the other party's insurance company (if the other party were at fault), for any reduction in the resale value of your repaired vehicle. In some states, you can even collect for this damage from your own collision carrier.

Generally speaking, there are three categories of Diminished Value that may affect the resale value of your collision repaired vehicle:

1. Inherent Diminished Value
   This is the minimum Diminished Value that would occur simply because your vehicle now has a significant collision history. This would apply even if optimum repair results had been achieved.
2. Insurance Related Diminished Value
   This form of Diminished Value would be in addition to Inherent Diminished Value. This would apply if and when an insurance company has mandated the use of inferior replacement parts and/or inappropriate procedural techniques in the repair of your vehicle. In most cases, the savings realized by short-cutting the repairs to your vehicle are more than lost by having to pay for Insurance Related Diminished Value claims.
3. Repair Related Diminished Value
   This happens when the repairing facility fails to meet even the minimum standards of repair quality for which they have been paid. Repair Related Diminished Value is owed to you by the repairing shop.

To collect for this damage will require a detailed report addressing each of the Diminished Value categories outlined above. Said report should be from a recognized authority who understands appropriate collision repair techniques and is familiar with vehicle values in your local market area. Letters from Used Car Dealers are not usually sufficient. The Consumer Advocates listed in the "Auto Damage Claims Help" category, of our Local Experts page, are qualified to provide this service.
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How are Total Loss settlements figured?

In insurance terms, the expression "Total Loss" simply means the cost of repair + projected supplements + projected diminished resale value + projected Rental Reimbursement expense exceeds the cost of buying the damaged vehicle at its pre-accident value minus the projected proceeds of selling the damaged vehicle for salvage. This is the definition of an "Economic Total Loss". There is also what is known as a "Constructive Total Loss". No mathematics required here. If a car drives off a bridge, gets hit by a speeding train and then catches fire, that is a "Constructive Total Loss".

Whether the Total Loss was "Economic" or "Constructive", most all Total Loss Settlements are based upon the pre-loss ACV or depreciated value of the vehicle as explained in question #2 of this text. In order to define a realistic ACV it is necessary to find vehicles comparable to the Total Loss vehicle and see how much those "Comps" are being sold for. To that amount the insurance company should add sales tax, title and registration fees. Here is where there seems to be a wide disparage of opinions. The ACV of your Total Loss vehicle could vary dramatically based upon the motivation of the appraiser locating the "Comp" vehicles. As a matter of practical application, most insurance companies use an independent automated market survey service to locate "Comps" and make a value recommendation for the Total Loss vehicle. As there are more than one such automated services competing for work from various insurance companies, there is an implied incentive to have a service provide lower priced Comps which will save insurance companies money and theoretically encourage an insurance company to use that service again in the future. All too often it seems that the true market value of a given vehicle becomes a secondary consideration in these relationships. It is for this reason that more and more consumers are exercising their right to appraisal as outlined in their own insurance policy. Explanation of the appraisal process is discussed next.
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What if I do not agree with the settlement being offered?

What you are about to read here is yet another reason why we recommend you include Collision, Comprehensive and Rental Reimbursement Coverage on your own auto insurance policy. Incorporated into your own auto insurance policy is what is generally referred to as an Appraisal Clause. Loosely translated, that means arbitration. If you and your insurance company do not agree as to the settlement value of your auto damage claim, either you or the company may invoke the Appraisal Clause. That means you would hire an appraiser to represent your interests, the insurance company would hire an appraiser to represent their interests and those two [2] would hire a third appraiser to act as "umpire" or "Referee". In the event the first two appraisers fail to reach an agreement as to a reasonable settlement value, they would each submit their respective work product to the third appraiser for determination. If either of the first two appraisers agrees with the determination of the third appraiser, the settlement amount has been resolved and is binding on the insurance company. In this process, the insured pays the fee of their appraiser. The insurance company pays the fee of their appraiser. The insured and insurance company split the fee of the third appraiser.

The appraisal process typically takes 2-6 weeks. However, most insured need not forego receiving any settlement during this process. In most cases, you are entitled to receive the last existing offer (the "undisputed" amount) promptly. Failure of the insurance company to pay you amounts to bad faith. For more information on bad faith go to our Home Claims page and read the "In Conclusion" text.

Submitting your claim settlement value dispute to appraisal can be quick, cost effective and (more often than not) will result in a settlement increase. Unfortunately, your right to appraisal exists only in matters of dispute between you and your own insurance company. You have no right to appraisal in matters of dispute between you and the other party's insurance company. If the other party's insurance company does not agree to submit your dispute to appraisal, your only remaining option would then be litigation. That option is discussed further in question #1 of this text.

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The truths shared with you here have been provided in the hopes of making you a more informed consumer and thus, a better negotiator. If you would like to discuss your options in greater detail we suggest you contact local help.