WHO DECIDES WHETHER TO REPAIR OR REPLACE MY CAR?
The insurance company typically has the option of deciding whether to repair or replace your vehicle, depending on whether the cost of repairs would exceed the value of the vehicle. If the cost of repairs will exceed the vehicle’s value, the insurance company will declare the vehicle as a “total loss” and will purchase your car for its fair market value, as determined below.
HOW IS THE VALUE OF MY VEHICLE DETERMINED BY THE INSURANCE COMPANY?
You are entitled to recover the “fair market value” or the “actual cash value” of your vehicle immediately before the accident. One common source used to estimate fair market value is the Kelley Blue Book. Other sources of information are the local newspaper or the Auto Trader, which may list the for-sale price of cars of the same make, model, and year as yours. If the vehicle is exotic or rare, an expert vehicle appraiser may be necessary to establish the value of your vehicle.
WHAT HAPPENS IF I OWE MORE ON MY AUTO LOAN THAN THE FAIR MARKET VALUE OF MY CAR?
Unfortunately, the insurance company is only obligated to pay you the fair market value of your car, even if the amount of your auto loan exceeds the fair market value of your car.
WHAT IF MY VEHICLE HAD PRIOR DAMAGE BEFORE THE ACCIDENT?
If your vehicle had some damage prior to the accident, it may be difficult to establish what portion of the damage is related to the accident itself. Mechanics and auto collision repair experts can assist in proving the age of the body damage or determining when a mechanical failure occurred. They can assist in establishing that the damage was caused by the accident.
WHAT HAPPENS TO THE LICENSE AND REGISTRATION FEES PAID FOR THE CAR?
You are entitled to be reimbursed for the prorated amount of the license and registration fees for the car that are unused. The insurance company should also reimburse you for tag transfer fees and, in some cases, a prorated amount of sales tax on the actual cash value of the car at the time of the accident.
AM I ENTITLED TO A RENTAL CAR WHILE MY CAR IS BEING REPAIRED?
If you are at fault in causing the accident, or if it is unclear who is at fault, then you must either pay for the rental car yourself or seek coverage under your own insurance policy if rental coverage is available. Many insurance contracts do not provide for rental coverage, so you should contact your insurance agent to determine what coverage exists. If the other driver is at fault, you may demand that the insurance company for the person who caused the accident provide you with a rental car for the time needed to repair your vehicle. You may be required to pay the rental car bill first, with reimbursement coming from the insurance company later.
WHAT TYPE OF RENTAL CAR AM I ENTITLED TO?
The insurance company must pay for the reasonable cost of a substitute vehicle. What qualifies as a “substitute vehicle” is often a source of dispute, but generally it is considered to be a vehicle of similar quality to your vehicle, within the confines of what is generally available for rent.
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