More on Property Damage: Total Loss

Property Damage: Total Loss

Where do I start?

If your vehicle is damaged in a collision which is caused by someone else's fault then you should contact the liability insurance company for the wrongdoer if you haven't heard from the liability insurance company within 2-3 days from the date of the accident. You will know the name of the liability insurance company from the 'exchange slip' provided to you by the investigating officer at the scene. You should contact the liability carrier by telephone and then follow up with a written notice of your claim telling it the time and place of the collision along with a description of your vehicle. If you send a written notice to the liability insurance carrier then you can expect a written denial or acceptance of the claim. There is no harm in speaking with the adjuster but if the claim is denied ask for the denial in writing. The liability insurance company is then obligated to confirm to you the specific reason for the denial.

If your property claim is accepted then you should negotiate with the adjuster. If you are satisfied with the offer then you should settle the property claim. Even if you are injured it is completely safe to settle the property claim and leave open the personal injury claim for later settlement. In other words, the liability insurance company is prohibited from forcing you to settle your personal injury claim at the same time you settle the property damage claim. If you do not agree with the settlement offered by the adjuster you have the right to request that the adjuster send to you in writing the amount of the offer along with the specific policy provisions the adjuster is relying on in support of the offer. 11 North Carolina Administrative Code (NCAC) 4.0117

Who pays for towing and storage charges?

The liability insurance company is responsible for all reasonable towing and storage charges until three days after you and the storage facility are notified in writing that the insurance company will no longer reimburse the owner or storage facility for storage charges. The written notification must contain the name, address and phone number of the facility storing the vehicle. 11 NCAC 4.0418(6).

Am I entitled to a rental vehicle when I have a total loss?

You are entitled to a rental vehicle from the time of the collision if the vehicle is disabled until you receive an offer from the liability insurance carrier. The moment the offer is made (assuming the offer is reasonable) the liability insurance company is not responsible for a rental vehicle. Sometimes a liability insurance company will allow you a few more days if you have had trouble buying a replacement vehicle, but, if that occurs it is voluntary on the insurance company's part.

Generally, you should be provided with a vehicle comparable to the vehicle which was damaged. Thus, if you were driving a compact car you should be able to rent another compact car. If you were driving a four door sedan then you should have a comparable four door sedan. Most insurance companies have arrangements with automobile rental companies whereby a call from the liability company to the rental company will produce a vehicle to you at fairly modest cost which the liability insurance company will pay. The arrangement with rental agencies is the reason why you should contact the liability insurance company as soon as possible. However, some liability insurance companies will not honor a claim called in by you because they have internal policies which provide that no claim is recognized until its insured calls and reports the claim. In those instances when an insurance company will not provide a vehicle because the insured has not reported the claim you should rent a vehicle at prevailing market prices and then when the liability company adjuster contacts you ask what to do about continuing with the rental. Probably you will be told to turn the rental in and rent a vehicle from the contact rental agencies. In such a case the liability insurance company should be liable for the initial rental cost at the prevailing rates until you are placed in a lower rate vehicle. By the way, mileage and gas are not paid for by the liability insurance company, just the daily rental cost of the vehicle.

What if my vehicle can be repaired?

A motor vehicle is repairable if the cost of repairs is less than 75% of the preaccident cash value (FMV). 11 NCAC 4.0418(5).

Must I use the drive-in facility of the Insurance Company?

Many insurance companies have 'drive-in' claim service facilities. However, no insurance company can require you to use a drive-in claim service operated by it. If you voluntarily utilize the drive-in claim service this will not prejudice your right to obtain independent appraisals and negotiate settlement on the basis of such appraisals. 11 NCAC 4.0417.

How many estimates should I get?

You should get two estimates of repair. If the adjuster insists that more than two estimates be obtained then the insurance company must pay for such estimate. 11 NCAC 4.0149(1).

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. 11 NCAC 4.0419(2).

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 and to include in writing any and all other oral agreements you and the adjuster have agreed upon. 11 NCAC 4.0420(a)(b).

Am I entitled to depreciation value?

Depreciation value is that sum of money which accounts for the decrease in the fair market value of your motor vehicle as the direct result of having been damaged in a collision even taking into consideration that your vehicle is repairable or is repaired. It is a recognition that a vehicle which has been in a collision and is repaired is of less value than a similar vehicle which has never been damaged. In other words, it is a value of loss over and above the repair costs. Depreciation is a very nebulous and gray area. The amount of depreciation will also depend on the severity of the damage. If there is minor damage there probably is no depreciation. On the other hand, the more severe the damage the more likely depreciation is present.

When negotiating with the adjuster you should demand that you get depreciation. Fact is the value of a vehicle can be greatly reduced just because it was in a wreck. Most adjusters will not volunteer depreciation value, therefore, you should raise the issue. On the other hand, some liability carriers will volunteer this information if your vehicle is no more than five years old and damage amounts to 25% or more of the fair market value. There is no computer formula which will account for depreciation. We have heard that some insurance companies will pay between 10% and 20% of the repair bill for depreciation.

You should be aware that if your vehicle is less than five years old and the damage to the vehicle exceeds 25% of its fair market value, you must disclose that fact to any subsequent buyer. This disclosure will certainly effect the amount anyone would be willing to pay or allow for trade in allowance for the vehicle.

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 that repair service and the adjuster is obligated to tell you that you do not have to use the repair service recommended and you may use the repair service of your choice. 11 NCAC 4.0423(c).

Suppose something goes wrong after the repairs are made?

If 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 which was unknown to you or the adjuster at the time you signed the release if the discovered damage was caused by the collision and which damage could not be determined or known until the repair or attempted repair of your vehicle. You have thirty days after the repair to assert the claim for additional damages. 11 NCAC 4.0421(4)

If you sign a release involving a repair to your vehicle that release does not bar you from later asserting a claim for diminished value (depreciation) of your vehicle which diminishment was directly caused by the collision. You have up to 30 days after repair to make claim for diminished value. 11 NCAC 4.0421(5).

Who gets the repair check?

If your car is financed the insurance company will write the check in your name and the name of the repair facility. This is so 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.

When am I entitled to a rental vehicle during repairs?

You are entitled to a rental vehicle from the time of the collision if the vehicle is disabled until the repairs are finished. If your vehicle is not disabled you are entitled to a rental vehicle from the time your vehicle goes into the repair shop until the time it is repaired.

If things don't work out to whom do I complain?

If you have a complaint about an insurance company and the way in which it is handling your claim you may call or write the Consumer Insurance Information Division of the North Carolina Department of Insurance. The toll-free telephone number is 800-662-7777. The mailing address is North Carolina Department of Insurance, Consumers Services Division, P.O. Box 26387, Raleigh, NC 27611.

When a complaint is received the Consumer Services Division will take information from you and then an analyst from the Division will request information from the insurance company, agent or adjuster. If the analyst finds that there is just cause for the complaint a recommendation will be made to both sides as to how to settle the situation. If this does not resolve the problem a deputy commissioner may arrange a conference with the insurance company involved to resolve the problem. If the conference does not resolve the disputed issue the deputy commissioner may recommend to the commissioner that appropriate legal action be taken including a public hearing or the filing of a lawsuit. (The Division will not investigate a complaint which is also the subject matter of a lawsuit. If a lawsuit has not been filed but you have an attorney the Division will investigate only with the attorney's consent). 11 North Carolina Administrative Code (NCAC) 4.0115.