Most cases of property damage are handled in the early stages of a claim, and are resolved quickly. There is rarely a need to take these claims to trial because valuation is typically simple, and there is usually insurance available to cover it if liability is contested.
Value Of Property Damage
When lawyers speak of property damage, they are typically discussing vehicle damage. It is important when talking to your lawyer to let them know of any other property that was damaged in a car accident—examples include prescription glasses, cell phones, expensive car radio equipment and a trunk full of groceries. For each of those items, the best evidence of value is the original purchase cost, as evidenced by receipts or statements of cost from the manufacturer/seller. The next best type of evidence is receipts for replacement items.
As for vehicle damage, a negligent driver is responsible for the lower of two amounts:
- The repair cost of the vehicle; or
- The fair market value of the vehicle.
In most cases where the negligent driver’s insurance company is likely to admit that its driver was at fault, it will want to evaluate the damage to your vehicle. They may send an adjuster to appraise the damage, or may request that you take the vehicle to a collision center for detailed examination by a mechanic.
In order to decide the fair market value of the car (the pre-accident value of the car), insurance companies use common resources like NADA http://www.nadaguides.com/ and Kelley Blue Book http://www.kbb.com/. These are reliable guides to determine value.
Using Collision Insurance
If the other driver’s insurance company does not admit liability, or if they are taking too long to make a decision, it may be faster to go through the collision policy with your automobile insurance company. You will typically pay a deductible (usually $250 or $500), and your insurance company will help you to repair or replace your vehicle. Then, your insurance company will attempt to recover their expenses from the at-fault driver’s insurance company, often through insurance company arbitration. If they do recover their expenses, they will reimburse you for the deductible.
One additional expense to include with property damage is the cost to rent a vehicle while your car is being repaired or while you search for a replacement. Importantly, the negligent driver (and his insurance company) is only responsible for the reasonable rental cost—we recommend that all clients use a rental vehicle for as short a time as possible to avoid being stuck with unreimbursed rental expenses.
If your vehicle is leased, you may end up owing more on the car than the fair market value. This can make it difficult to afford a replacement vehicle. When you enter into a lease, the financing company will usually offer gap insurance, which pays the difference between what you owe and what the insurance company pays you for the car. It is added protection to make sure you can meet your expenses after an accident.
Newer cars, typically those within two or three years of age, may be completely repairable but have a significant decrease in value. This is called a “diminished value” claim. It reflects the difference in value between a new car and the same car which, though fully functional, has been in an accident. This is an additional claim that may arise in addition to the repair cost of a car.