How do I get paid for the damage to my car?

One of the first concerns after a car accident is what to do about the damage to your car. To start, you need to find out who should pay.

When you call your automobile insurance company to report the incident, ask them if you have comprehensive collision coverage on your vehicle. This is NOT mandatory coverage in Minnesota, so even if you think you are “fully insured,” you may not have comprehensive collision coverage.

If you have comprehensive collision coverage, then your insurance company will generally handle the cost of repairing the vehicle or paying you for the value of the vehicle if your vehicle is “totaled.”

If you do not have comprehensive collision coverage and the accident was someone else’s fault, then the other driver’s insurance company is responsible for paying for the damage to your vehicle.

What are they required to pay you? The insurance companies are required to pay you for the costs of repairs or the value of your vehicle, whichever is less. For example, if the cost to repair your car is $2,000, but fair market value for your vehicle is only $1,500, they are legally obligated to pay you only $1,500.

If your insurance company is paying for the damage to your vehicle, they will subtract the amount of your deductible from what they owe you. For example, if your vehicle is “totaled” and the fair market value of your vehicle is $1,500, but your deductible is $200, then your insurance company will pay you $1,300. However, if the accident was someone else’s fault, your insurance company will obtain reimbursement from the other driver’s insurance company for the full $1,500, and you will later be reimbursed the $200 deductible. Please call us to have this explained in more detail.

What happens if my vehicle is “totaled?” A vehicle is considered “totaled” if it would cost more to fix the car than what it is actually worth. In that case, the insurance company is required to pay you the fair market value of your vehicle.

What is “fair market value?” Fair market value is what your vehicle is worth in your area. Most insurance companies have a database of vehicles that have been listed for sale or sold in your area over a certain period of time. The adjuster who is handling the claim will input your vehicle information into that database. He or she will then base his or her assessment of fair market value on what similar vehicles have been listed or sold for in your area in recent months. This means that the value of the vehicle is somewhat negotiable.

To find out the fair market value of your vehicle, you can check any number of websites:
www.kbb.com
www.autotrader.com
www.startribune.com/classifieds
www.nada.com

Can I get a rental car while my car is in the shop? If you have coverage for rental vehicles on your automobile policy, you can obtain a rental car until your vehicle is repaired. If you don’t have rental coverage, but the accident was someone else’s fault, you may also get the other driver’s insurance company to pay for a rental vehicle until your car is repaired. We recommend that you talk with a lawyer before getting the rental vehicle, so that you are not somehow stuck with a bill that the other driver’s insurance company later refuses to pay