If your vehicle is damaged because of someone else's negligence, then you should know that you have rights under North Carolina law as well as under the rules and regulations of the North Carolina Department of Insurance.
In almost all instances, our attorneys will be dealing with the other person's liability insurance company through their adjuster. Even if the personnel at The Law Offices of Lyndon R. Helton, PLLC, assists you in the handling of your property damage claim, you may still need to have some contact with the insurance adjuster.
Reminder: Always limit your conversations with the adjuster to property damage issues only. Do not give any statements to anyone about the facts of the collision or about your injuries.
Can I Handle A Claim On My Own?
Even though it may not be cost-effective to hire a lawyer to pursue a property damage claim, it may be necessary in some cases. The information we provide below has been prepared by The Law Offices of Lyndon R. Helton, PLLC, to assist in negotiations with an insurance adjuster. We are unable to represent individuals in property damage claims if they are not clients of our office.
If you are a client of ours, we will help you handle your property damage claim as a courtesy. Though this is true, it is still your duty to mitigate your loss by taking prompt action on your property damage settlement. Failing to do so can result in unnecessary storage fees, depreciation of car value and increased repair costs, which may give the insurance company an excuse not to pay for the entire vehicle damage claim.
How Do I Start My Property Damage Claim?
If your car or vehicle was damaged in a crash and the collision was due to negligence or reckless driving, your first step should be to try to contact the at-fault driver's insurance company. Once enough information has been obtained and you have reported your claim, we will then need to wait for the insurance company to assign your claim to an adjuster. If you have any information that might aid our office, please contact us immediately.
The typical wait time after your claim has been assigned to an adjuster is two to three days. Most insurance companies will request you to wait for this amount of time. This is because two adjusters generally will be assigned to your claim. One will typically handle the property damage portion of your claim while the other will deal with your injury claim.
You can help our office obtain the name of the insurance company from the "exchange slip" provided to you by the investigating officer at the scene of the collision. After we contact the liability carrier by telephone, we always follow up with a written notice of your claim. Once we send a written notice to the liability insurance carrier, the insurance company starts its investigation.
The adjuster assigned to your claim must complete their investigation of your claim before they accept or deny it. Unfortunately, our office has limited control over the amount of time involved before the insurance company makes a liability decision.
If your claim is denied or if it appears as if the investigation is taking longer than you expected to recover damages, our office may suggest that you file a claim with your own insurance company. In the meantime, we can continue working on the liability issue for your personal injury claim. Once the insurance company accepts liability, it will usually pay back your insurance company. This "payback" provision is handled by your insurance company under subrogation.
If you agree to the offer, then we can settle your claim. This will only settle the property damage portion of your claim. If you are injured, this claim remains open until the claim is resolved by settlement or further legal action. In essence, an insurance company may not ask you to settle your personal injury claim while also settling your damage claim.
Never feel like you have to accept the offer given to you by the insurance adjuster. If you disagree with the amount made in the offer, you have the right to reject it. This does not guarantee, however, that we will necessarily be able to recover any more monies on your vehicle. We will always request that the adjuster tell us the specific offer along with the precise policy provisions and factual documentation the adjuster is relying on in support of the offer. 11 NCAC § 4.0117. If they are unreasonable, we can file a lawsuit. The jury will get the final say and last word on the insurance company.
Is My Vehicle A Total Loss?
Your vehicle will be considered a total loss if the amount needed for repairs (including supplemental claims such as projected rental during the period of repair) equals or exceeds 75 percent of the pre-accident cash value, which is sometimes referred to as the vehicle's "fair market value" (FMV). 11 NCAC § 4.0418 (5).
Generally speaking, the insurance company is required to pay the fair market value (FMV), or pre-accident cash value, of the vehicle prior to its involvement in the crash. In other words, the FMV is the value a seller and a buyer in your community might agree upon if the vehicle were not damaged or neither party was rushed into the decision.
Insurance adjusters generally have a book value they use to arrive at FMV. They may have some "wiggle" room based on the condition of the vehicle, but there is generally little room for negotiation. Book value is considered FMV and as such, this gives both sides little leeway to negotiate.
Many insurance companies use the National Automobile Dealers Association (NADA) publication entitled "Official Used Car Guide," which is published monthly. Some liability insurance companies have their own methods to arrive at valuations. Some insurance companies consider their system superior to the NADA Book commonly used. Notwithstanding, no publication is completely accurate and they should and are indeed only "guides." As such there is usually some basis to negotiate in most cases.
Important Note: North Carolina law does not require an insurance provider to pay more than the FMV, even if the cost of repairs totals more than what the vehicle is worth or more than what is owed on the vehicle.
Even if your vehicle is totaled, continue making car payments. That's because you are contractually obligated to pay your bank or loan company even though your vehicle is inoperable or a total loss. Things will become more complicated if you are behind on your loan payments. That's because banks typically don't care about the fact that your vehicle is damaged beyond repair. They will still insist on being paid.
What Happens If We Can't Agree On An Evaluation?
If we are unable to reach an agreement as to FMV, then the adjuster will usually base any further settlement offer, not only on published regional average values of similar vehicles but also on the value of the vehicle in the local market. Local FMV must be determined by using either the local market price of a comparable vehicle or, if no comparable vehicle can be found, quotations from at least two qualified dealers within the local market area.
Reminder: Replacing your tires or making other improvements or mechanical repairs does not automatically allow you to recover more for your vehicle if it is damaged. Upkeep of your vehicle helps to maintain the value, not increase it; though, in some cases, a new paint job may become an exception to this rule.
The condition of your vehicle prior to the crash will also be taken into consideration when determining the settlement amount. As the law outlines, a better than average condition vehicle may be valued higher than one that is considered to be in poor condition. 11 NACA § 4.0418 (1).
The adjuster will usually provide substantiation for the FMV of your vehicle (when it is a total loss), including estimates, evaluations and deductions used in calculating the payment as well as stating the source of these values. 11 NACA § 4.0418 (4)
What Does 'Salvage Value' Mean?
A vehicle's salvage value is what the car is worth after it has been stripped down for parts. In a salvage scenario, you will sign over your vehicle's title to the insurance company who will then pay fair market value for the vehicle. If you decide to keep your vehicle in a salvage situation, then the amount you receive for your vehicle will be the fair market value less the salvage value.
In most cases, the expected salvage value will be about 10 to 25 percent of the total loss value.
We generally will ask the adjuster to give us two offers, one if the insurance company takes the vehicle and one if the client keeps the vehicle. The liability insurance company usually will have a salvage dealer who will purchase the salvage for the amount claimed as salvage value by the adjuster. 11 NCAC § 4.0148 (3).
Who Receives A Total Loss Check?
If your vehicle is currently being financed, the liability insurance company must pay the payoff amount to your bank or finance company. They are required to do this by law. If there is any money left after the pay off, they will write you a check for the difference.
If your name and the finance company's name appear on the check, your next step should be to endorse the check before turning it over to the finance company. Your loan will then get paid off by the finance company, which will also refund you any difference in the equity of your vehicle.
What If The Payoff Amount On My Loan Is More Than The Check From The Insurance Company?
If this happens, then the finance company is allowed to keep the whole check. Unless you have bought gap insurance, you are still liable for the remainder of your loan.
What Types Of Optional Insurance Policies Are Helpful In An Accident?
"Gap insurance" is an optional insurance policy that you purchase when you purchase a vehicle. In some cases, it is required on leased vehicles, while in other cases it is needed when a purchase is being financed.
"Repair or replacement" coverage is another type of optional insurance you may purchase when buying a vehicle. This type of policy typically guarantees you the reasonable cost of repairs or the price of a new vehicle, whichever is less, and is paid out by the insurance company.
What Happens If My Car Is Totaled And I Can't Pay Off My Loan?
Even if you don't have additional insurance or the means to pay back the loan on your wrecked vehicle, you may still be able to use collateral as a means of securing another vehicle as well as continue making payments on your loan. This can even happen in situations in which you owe more on your loan than your vehicle was worth.
The process for making a request for substitution of collateral goes like this:
- The insurance company sends a check to the finance company for the fair market value of the vehicle.
- The title of the wrecked car is sent by the finance company to the liability insurance company.
- The remainder of the existing loan is then transferred to a new loan for another vehicle.
This option is considerably more desirable for some people because it provides you with a replacement vehicle while also allowing you to settle your property damage claim. In addition to this, because you will generally buy a replacement vehicle from the same dealer from whom your wrecked vehicle was purchased, you may not be required to make another down payment.
Important Note: In situations where your vehicle was not financed, you have the option of choosing whether or not to get your vehicle repaired after receiving the check from the insurance company.
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 that the insurance company will no longer reimburse the owner or storage facility for storage charges. The notification can be verbal or written. Once you are notified of this situation, you must take all reasonable steps to get the vehicle moved or you will be responsible for the charges. 11 NCAC § 4.0148 (6).
If My Vehicle Is A Total Loss, Am I Entitled To A Rental Car?
You are entitled to a rental vehicle from the time of the collision, if the vehicle is disabled, until the liability insurance company sends you an offer. The liability insurance company is not required to provide a rental vehicle once a reasonable offer has been made, though some insurance providers may give you a few days if you are having difficulties finding a replacement vehicle or have not received your check yet.
Reminder: You are responsible for mitigating your damages after an accident, not the insurance company. If the insurance company does give you access to a rental vehicle after an offer has been made, it has done so voluntarily, though the vehicle should generally be comparable to the one that was damaged.
How Do I Arrange To Get A Rental Vehicle After A Crash?
In many cases, the insurance company will make arrangements with a rental car company with whom they do business. A rental car will then be sent out to you for your use. Initially, this may come at some cost to you but the insurance company will pay you back for this expense.
This arrangement, which is called direct billing, is the reason why we try to contact the insurance company as soon as possible following an accident.
Some liability insurance companies will not honor a claim called in by our office because they have internal policies that state that no claim is recognized until its insured calls and reports the claim. In these instances, when an insurance company will not provide a vehicle because the insured has not reported the claim or some other delay, you can rent a vehicle at prevailing market insurance rate price. We will advise you as to what companies the liability insurance companies will approve.
Reminder: While there is always some risk to renting a vehicle on your own, sometimes this gives the insurance adjuster a little more incentive to handle the property damage claim in a timely manner.
What Rental Costs Are Covered By The Insurance Company?
The only thing the insurance company will cover are the daily rental costs for the vehicle. You will not be reimbursed for gas or mileage.
Also, keep in mind that you may be required to purchase collision coverage before you are allowed to get your rental vehicle. This is another expense the insurance company is not required to cover. If you already have collision coverage, your policy should cover rental car costs, which means you do not have to purchase additional coverage when obtaining a rental vehicle.
What Happens If It's Possible To Repair My Vehicle?
A motor vehicle is repairable if the cost of repairs is less than 75 percent of the pre-accident cash value FMV. 11 NCAC § 4.0148 (5). Do not have your car fixed without first allowing the insurance company an opportunity to see the damage and authorize the repairs. It will usually take at least three days to several weeks before the car is appraised, depending on the insurance company, when the accident was reported and if liability has been accepted.
Do I Have To Use The Drive-In Facility At The Insurance Company?
There are a lot of insurance companies that offer "drive-in" claim service facilities that can speed up the property damage claim process. However, you are not required to use such services. In fact, even if you choose to use the drive-in claim service, you still have the right to seek independent appraisals as well as negotiate a settlement based on those appraisals. The fact that you used the drive-in service should not affect your right to do this.
Important Note: The adjuster will need to inspect your vehicle before authorizing any repairs.
In some cases, you may notice that the amount quoted by an independent appraiser is higher than the amount quoted by the insurance adjuster. This is common as an adjuster is typically looking out for the best interests of the insurance company and its bottom line. You always have the choice of where to go for vehicle repairs.
If the repair estimate you have differs from the one provided by the adjuster, make sure the repair shop you choose has both estimates. They will need these in order to come to an agreement regarding compensation for repair costs. Your vehicle should be restored to the condition it was in prior to the accident.
How Many Estimates Should I Get?
You should get two estimates of repairs. If the adjuster insists that more than two estimates be obtained, then the insurance company must pay for each additional estimate. 11 NCAC § 4.0149 (1).
Am I Entitled To Depreciation Value?
The depreciation value is the amount of money associated with a vehicle that has been involved in an accident. The depreciation value takes into account whether a vehicle is repairable or has been repaired as well as the natural depreciation of fair market value because the vehicle was involved in a crash.
The amount is basically the recognition that a vehicle, which was repaired after a collision is of less value than a similar vehicle that has never been damaged in an accident.
Depreciation can be very uncertain 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 we will try to get depreciation. The value of a vehicle can be reduced just because it was in a wreck. Most adjusters will not volunteer depreciation value, therefore, we will raise the issue if you have asked that we do so on your behalf. Generally, we will not be able to make a claim unless you have secured a written statement that indicates that the vehicle has depreciated.
Important Note: The estimator does not need to indicate the actual depreciation amount because industry standards allow for a 5 to 10 percent buffer for repairs. Even if the vehicle has been adequately repaired, it has still depreciated, which is something to keep in mind.
Most insurance companies will not allow depreciation recovery unless your vehicle is no more than three years old and damage amounts to 25 percent or more of the FMV. There is no computer formula that will account for depreciation.
Can I Choose My Own Repair Facility Or Will One Be Chosen For Me?
Even though an adjuster will typically recommend a repair shop to you, they are obligated to explain that you do not have to go with this repair service and may instead choose your own repair shop. 11 NCAC § 4.0423 (c).
Unless your vehicle is completely new, it will be assumed that your vehicle is made up of used parts. This means, of course, that you will not have a choice in what parts are used to repair your vehicle. In most cases, the replacement parts will be in the approximate condition of the parts prior to the crash.
Important Note: Because it is cosmetic in nature, a paint job may not be covered by the insurance company.
Suppose Something Goes Wrong After The Repairs Are Made?
After receiving repairs on your vehicle, you may sign a release that returns the vehicle to your possession. In some cases, other damages are discovered, ones that were caused by the accident but were unknown or could not be determined at the time of the repairs. You should know that this release does not prohibit you from asserting a damage claim later on. Under North Carolina law, you have 30 days after the repair to assert the claim for additional damages. 11 NCAC § 4.0421 (4).
The release also does not bar you from asserting a claim for diminished value (depreciation) of your vehicle of which diminishment was directly caused by the collision. You have up to 30 days after the repair to make a claim for diminished value. 11 NCAC § 4.0421 (5).
Who Receives The Repair Check?
If your car was financed, the insurance company will address the check to you and the repair shop. The reason for this is because the damage on the vehicle reduces its value, which in turn diminishes the finance company's lien rights. In order to protect its interest in the vehicle, the finance company will always request repair of a damaged vehicle.
If your vehicle is not financed, you get the entire check.
During Repairs, Am I Entitled To A Rental Car?
Just as in the case of getting a rental car, in case of total loss, you may be entitled to a rental car during the time following a crash and before repairs have finished. In cases where a vehicle is not completely disabled and is still drivable, entitlement to a rental vehicle does not begin until the repair shop begins repairs.
Insurance companies know how long repairs typically take on a vehicle, which means that if a repair shop is slow to make repairs, you may not be entitled to a rental car during the additional time nor will the insurance company pay for any additional days. This is one reason why it's important to choose a reputable repair shop that you know will be able to finish repairs in a timely manner.
What Type Of Rental Car Am I Entitled To?
In general, you will receive a rental vehicle comparable to the one that was damaged. The insurance company will typically call the rental company for you and arrange the drop off of a vehicle. This may come at a cost that will either be covered by the insurance company or you will be reimbursed for the charge.
An insurance company may refuse to provide a rental vehicle in cases where a damage claim has not been reported or in situations in which they are still investigating the claim. When this happens, you are able to rent a vehicle at prevailing market prices.
Once the insurance company accepts liability, you should be reimbursed for the daily rental costs. You will not be reimbursed for gas or mileage.
Important Note: You do run the risk of having an insurance company deny responsibility for damages, which means you will be responsible for the cost of a rental car if you rent on your own.
Also, the insurance company may refuse liability for any initial rental costs on a vehicle whose interest rates are lower at another company. This is why it's important to go through a contract rental company that charges its own insurance rates.
What If I Have Additional Questions Regarding My Property Damage Claim?
If you have additional questions after you have read this brochure, please do not hesitate to contact our office. This pamphlet only answers some of the most commonly asked questions about property damage claims. Again, if you are our client, we are here to help you with this portion of your case and will try to offer alternatives, if possible.