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Property Damage: Overview

When you are involved in a car accident, you can have up to 2 claims – a personal injury claim and a property damage claim (called “PD” in the industry). Property damage refers to the damages to your car, its contents, and other damages that flow out of not having a car to drive.  The property damage claim is the easier of your two claims and can usually be resolved in a couple of weeks.  The claims move very fast compared to personal injury claims in part because insurance companies are paying for you to rent a car and want to get you back in your car as soon as possible.  Most of your PD claim is handled over the phone unlike a PI claim that requires lots of paperwork.  The only paper that will get passed back and forth are things like Repair Estimates, Blue Book quotes, and Appraisals.

Types of Claims For Damage To Your Car

Your property damage claim can actually be one of or a combination of the following:

  1. Collision repair claim – your car was repaired
  2. Diminished value claim  – your car is worth less after an accident
  3. Total loss claim – your car was “totaled out.”

Each type of PD claim has its own page in ClaimClinic.  See the Property Damage Module box on the right to drill down into your type of claim.

Totaled out can mean one of two things.  It can mean your car cannot be physically repaired because of extensive damage or it can mean the cost of repairs exceeds the value of your car.  In either of these two cases your PD settlement will involve arguing with the insurance company on what is the fair market value of your vehicle at the time of the accident, which is what your PD claim is worth.  If your car is declared a total loss by the adjuster, he/she will move the car out of the body shop and to a storage yard for re-sale/salvage purposes.

If your car was repaired, then you may also have a Diminished Value claim (called a “DV claim”). DV is the decrease in your car’s value because it has been in an accident.  When you car is in an accident and/or repaired, it is reported to databases like CarFax.  When you go to sell or trade in your car it will be worth less because the buyer will know it has been in an accident.  If a buyer is looking at two identical cars but one has been in an accident and one has not, the one not in an accident is worth more.  Your DV Claim entitles you to get paid for that decrease in value.  9 times out of 10 the insurance companies will not tell you that you have a right to a DV Claim.  You need to know to ask for it.

What’s Covered In A Property Damage Claim

In addition to either repairing or replacing your car, your Property Damage claim also has several sub-components to it.

Loss Of Use

When you lose the ability to drive your car, you incur certain expenses.  These are called “loss of use” and include the costs of a similar rental car.  If the other driver’s insurance company offers to get you a rental car, then you won’t get additional compensation for this component because the insurance company has paid you for this already.

Personal Property

Your PD claim also includes the loss or damage to your personal property.  This includes such things as sunglasses, computers, iPods, cell phones, and ripped clothing.  You are entitled to the current value of the damaged or lost items.  You can try asking for the replacement value, or the cost to re-buy each thing.  You will need to research the prices and then document each for the adjuster.  The adjuster then will most likely discount each item’s new cost to get its current value.

Which Insurance Company To Use For Property Damage & Diminished Value Claims

Unlike personal injury claims, you usually have options on whose insurance company you want to make your PD claim against.  You can:

  1. Make the claim against the at-fault driver’s insurance company.  This is called a 3rd Party Claim because you are a third party to the insurance contract between the at-fault driver and his/her insurance company, meaning you are not a party to their contract.  To make a 3rd Party claim, the accident must have been the other person’s fault.  If the other party’s insurance company denies its driver was at fault, then you can always turn to your own insurance company under a 1st Party Claim, directly below.
  2. Make a claim against your insurance company for collision coverage.  This is called a 1st Party Claim because you and your automobile insurance company have a contractual relationship together.  You can make a 1st Party Claim regardless of whose fault it is.

Your Insurance Company

There are some advantages to using your own car insurance to pay for damage to your car.

  1. It’s Faster.  Dealing with your own insurance company is usually much faster than working with the other driver’s insurer.  Your  insurer pays on your collision coverage regardless of whether the accident was your fault, so they don’t investigate the claim prior to processing it.  The other driver’s insurer, on the other hand, must investigate liability before accepting your claim because they will only pay if the accident was their driver’s fault.
  2. Good Faith.  Your insurance company generally owes you certain duties and responsibilities such as fairly and quickly processing your claim because they are in an insurance contract with you.  This makes your Insurer move a little faster and take things a little more seriously.  Afterall, you have been paying premiums for this service.

There are also several disadvantages to making a claim through your insurer:

  1. Deductibles.  You may have to pay a deductible under your policy.  You will not have to pay a deductible if you use the at-fault driver’s insurance.  You need to sit down and think about whether not having to pay your deductible is worth having to deal with an adversarial insurance company.  You should know that most of the time your insurance company will act and behave just like the at-fault driver’s insurer so it is usually better to file your claim with the other driver’s insurer and not have to pay your deductible.  Of course, you can only do this if the accident was in fact the other driver’s fault. Also, if your insurer gets reimbursed for your claim they will pay you back your deductible. It will just take some time to get this money back.
  2. Policy Restrictions.  You claim may have certain restrictions as set out in the actually language of your insurance policy, things such as scope of what kinds of personal property they will reimburse.
  3. Car Loan Financial Responsibility clauses.  Your policy may have a clause that gives your car loan lender rights over your settlement.  These clauses essentially protect the bank over you.
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