Payment for Automobile Damage

Q. Will I Get A Rental Vehicle While Mine Is Being Repaired?

A. If you carry rental coverage on your own insurance policy, your rental expenses will be covered. If you do not carry rental coverage, you are entitled to a rental car from the other driver’s automobile insurance assuming they have insurance and were at fault. Most insurance companies deal directly with the rental agency so you need not worry about paying “up front” fees. Under some circumstances, you will have to pay for the rental vehicle and then seek reimbursement from the other person’s liability carrier. Again, this is determined by who is at fault. Once your vehicle is repaired, the rental vehicle must be returned to the rental agency immediately or you will be responsible for any additional charges.

Q. Who Pays For The Damage To My Car?

A. Who pays for your automobile damage depends on the type of coverage you have and who was at fault in the accident.

1. If you have Collision Coverage, your insurance company may pay the entire bill minus your deductible. Your insurer will seek repayment from the other driver’s insure. The other driver’s insurer should reimburse you for payment of your deductible.
2. If the other driver is at fault, his or her insurance company must pay for your vehicle damage promptly, including any deductible, even if you don’t carry collision insurance.
3. If you have collision coverage and you were partially at fault, each insurance company must pay a fair percentage equaling each driver’s fault.

Q. If My Automobile Is Repairable, What Are the Obligations Of the Insurance Company To Make Repairs?

A. According to Minnesota Statute 72A.201 subdivision 6, if the insured (you) is NOT an automobile dealer, the insurer must assume the following:

1. Pay all costs for the satisfactory repair of the motor vehicle.
2. Satisfactory repair includes repair of both obvious and hidden damage as caused by the crash.
3. Include reasonable towing costs; and4. Offer a cash settlement sufficient to pay for satisfactory repair of the vehicle.

Q. How Is The Value Of My Car Determined?

A. Contrary to popular belief, your car is not valued at the “Blue Book” rate. Blue Book rates are used mainly for auto dealers and banks to determine “retail value” and “loan value” which are inflated for purposes of profit. Insurance companies evaluate your vehicle based on the “market value” rate, which means “what the average consumer would pay for the same vehicle.” Your vehicle is rated in the following areas:

1. Year.
2. Make.
3. Mode.
4. Condition (excellent, good, fair, or poor)
5. Mileage.

Options The number of miles and the condition of the vehicle are the major factors taken into consideration in the evaluation of your vehicle. High mileage means excess wear and tear. Even if your vehicle has been maintained properly, it will still be evaluated at a lower rate than the same vehicle with fewer miles.

Q. What If My Vehicle Is A Total Loss?

A. If your vehicle is “totaled,” this means one of two things:

1. The cost of repairs exceeds the value of the vehicle, or
2. The vehicle is demolished beyond repair and the only option is to replace it. Under these circumstances the insurance company will make you an offer for your vehicle. Once you have accepted their offer, you will need to do the following:

• Sign the title over to the insurance company and deliver it to them.
• If there is a bank loan, the bank will inform you of the final payoff and you will need to pay it.
• Turn in the rental vehicle. (You can usually get a couple of days to get your affairs in order, but you cannot procrastinate, or you will be responsible for any additional charges on a rental vehicle.)

Q. What Does It Mean To Be Upside Down With Your Bank Loan?

PLEASE NOTE: Unfortunately, vehicles depreciate very quickly and you may not always get what you believe your vehicle is worth. It is sometimes difficult to negotiate with the insurer for a higher settlement for your vehicle. Occasionally, you end up “upside down” concerning your vehicle, which means your loan exceeds what the vehicle is worth.

You then owe the bank the difference. In that situation most banks are usually willing to work with you on the remaining balance. Also note: If you believe your automobile has been severely undervalued, call your insurance AGENT (not the adjuster) and ask him or her to go to bat for you. The agent wants your repeat business and may try to help you get a better auto recovery.

Q. If My Automobile Is Considered A Total Loss, Will I Be Reimbursed For Any Of The Fees I Have Paid The State For The Ownership Of My Car?

A. Yes. According to Minnesota Statute 72A.201 subdivision 6, the insurance company that pays for the loss must also pay the following:

1. All applicable taxes.
2. Licenses fees-at least pro-rata for the unexpired term of the replaced automobile’s license.
3. Other fees paid incident to the transfer or evidence of ownership of the automobile, at no cost to the insured other than the deductible amount as provided in the policy.

Q. What Steps Must The Insurance Company Take In Covering The Cost Of My Totaled Vehicle?

A. According to Minnesota Statute 72A.201 subdivision 6, if the automobile insurance policy provides for the adjustment and settlement of an automobile “total loss” on the basis of actual cash value or replacement with “like kind” and quality. The Insurance Company must offer a comparable and available replacement automobile or a cash settlement based upon the actual cost of purchase of a comparable automobile.

If a comparable automobile is not available in the local market area, the insurance company must obtain one or two or more quotations obtained from two or more qualified sources located within the local market area. The insured (you) should be provided the information contained in all quotations prior to settlement.

Q. If The Insurance Company Makes Me An Offer I Don’t Understand, Are They Obligated To Inform Me Of Their Reasoning?

A. Yes. Any settlement or offer of settlement which deviates from any of the rules already discussed must be documented and justified in detail. The basis for the settlement or offer of settlement must be explained to the insured (you).

Q. If I Put A Lot Of Money Into Repairing The Vehicle Before The Accident, Will I Get Reimbursement?

A. You will not be reimbursed for “normal” maintenance. For example, if you had recently replaced the brakes, that would probably be considered “normal” maintenance. However, if you paid for the repair that improved the value of the auto, it may be reimbursed. You must provide documentation for any modification you have made. For example, if you had recently replaced the engine or transmission or tires, you must provide the insurer with the receipts for the parts and labor. Without that documentation, there is no way to substantiate that your vehicle was repaired.

Q. Will The At-Fault Insurance Company Pay My Deductible?

A. If your own insurance company pays for the repair of your vehicle, you will be responsible for paying your deductible up front. The negligent party’s insurance company should eventually reimburse you for your out of pocket deductible.

Q. What If Some Of My Personal Property Was Damaged In The Crash?

A. Unless you or the defendant carry a Personal Property Protection Policy, you will not be reimbursed for personal objects damaged inside your car as a result of the crash.