If another driver is at fault for causing damages to your vehicle in an auto accident, you have the option of getting your vehicle repaired through the at fault driver’s insurance company OR your insurance company. There are advantages and disadvantages of going through both insurance companies. Let’s go through the repair process and pros and cons of each insurance company.
The At Fault Driver’s Insurance Company Will Pay For Your Car Repairs
If another driver is at fault for causing your car accident, his or her insurance company will pay for some or all of your car repairs. After an accident, the at fault driver’s insurance company will complete a preliminary estimate. A preliminary estimate is an inspection of the visual damages of your vehicle. The insurance company may send a representative to inspect your vehicle, or request that you bring your vehicle to an auto repair shop to be inspected. You have the right to request that your vehicle be inspected at a convenient location, like your work parking lot or outside of your residence.
After the initial inspection, the at fault driver’s insurance company will estimate the cost of the repairs and determine if the at fault driver has enough insurance coverage to pay for your car repairs. California requires drivers to have a minimum of $5,000 in insurance for damage to the property of other people. If it appears the at fault driver does not have enough property damage insurance to cover your car repairs, you can use your Collision insurance through your insurance company to pay for your repairs.
If the at fault driver has enough insurance to cover your car repairs, the driver’s insurance company will likely ask you to bring your car to one of their approved repair shops to be repaired. However, you have the right to select the repair shop of your choice. Before choosing a repair shop, it is important to determine what kind of parts and warranty the repair shop offers. For example, you may want a repair shop that offers Original Equipment Manufacturer (OEM) parts. Insurance approved repair shops usually offer like kind quality (LKQ) parts, but not OEM parts. It is also important to check what kind of warranty the repair shop offers. Many repair shops, including insurance company approved shops, offer a lifetime warranty on vehicle repairs.
Once you select a repair shop and your car is being repaired, the repair shop may do a supplemental damage estimate. A supplemental estimate is done when there are damages discovered during the repair process that were not visible during the preliminary estimate. The repair shop will submit the supplemental estimate to the at fault driver’s insurance company for payment.
Advantages of Going Through the At Fault Driver’s Insurance Company
- You don’t pay anything. The at fault driver’s insurance company will compensate you for the market value of your vehicle up to the maximum amount of the at fault driver’s insurance coverage. You do not have to pay any money out of pocket.
- Rental Car Fees. The at fault driver’s insurance company will pay for you to have a rental vehicle from the date of your car accident to the date the insurance company sends you a settlement check for your car.
- Loss of Use of Your Car. You can collect compensation for each day that you don’t have use of a vehicle after your car accident. This compensation is known as Loss of Use damages. Loss of Use damages begin on the date of your car accident and end when you are provided with a rental car, or the insurance company sends you a settlement check for your car. Loss of Use damages are typically calculated using the daily rental rate of a similar make and model vehicle.
For example, assume you had a Toyota Camry that was totaled in your car accident. The at fault driver’s insurance company provides you with a rental car 4 days after your accident. The insurance company mails a settlement check to you for the market value of your car 14 days after your accident. Because you had use of a rental car for 10 days, you did not have Loss of Use damages for those days. However, you can collect compensation for the 4 days you were without a car after your accident. If the daily rental rate of a similar, full-size vehicle is $40 a day, you could collect $160 in Loss of Use damages from the at fault driver’s insurance company.
Disadvantages of Going Through the At Fault Driver’s Insurance Company
- Not Enough Insurance Coverage. The at fault driver may not have enough property damage liability insurance to cover the Actual Cash Value of your car. If the at fault driver has the minimum property damage insurance coverage of $5,000, and the ACV of your car is $20,000, that driver’s insurance company would only pay you $5,000.
- Delayed Payment. The other driver’s insurance company will need to conduct an investigation to determine who was at fault for your car accident. Even if you did nothing to cause the accident, the investigation will take time. Insurance agents for the at fault driver will often drag their feet in completing their investigation and sending you a settlement check for your car.
- Awful Customer Service. The goal of car insurance companies is to save money. The way they save money is to deny or reduce the value of your claim. Insurance agents will pretend to be on your side, while only looking out for their own best interest. Insurance agents will often intentionally delay resolution at every step of the process.
Your Insurance Company Will Pay for Your Car Repairs
Your insurance company will pay for your car repairs as long as you have Collision insurance. Collision insurance covers costs to repair or replace your car if it’s damaged or destroyed in a car accident, regardless of who is at fault for the accident. Collision insurance is optional in California. It is important to know that your insurance premiums (payments) will not increase if you use your insurance to pay for car repairs from an accident you did not cause.
The maximum amount of Collision coverage your insurance company will pay is listed on your auto insurance policy declarations page. This amount is usually listed as “Actual Cash Value” or “ACV.” Actual Cash Value is the market value of your vehicle, usually calculated as the amount that it would cost to buy a comparable vehicle at the time of your car accident. A comparable vehicle is one with the same make, model, year, mileage, options, and physical condition.
The repair process with your insurance company is similar to going through the at fault driver’s insurance company (described above). Your insurance company will complete a preliminary estimate, and possibly receive a supplemental estimate from the repair shop. You have a right to select the repair shop of your choice, or to select a repair shop in a network of approved shops through the at fault driver’s insurance company. Before choosing a repair shop, it is important to determine what kind of parts and warranty the repair shop offers.
Advantages of Going Through My Insurance Company
- Quicker Resolution of Your Claim. Because your Collision insurance covers the cost of repairs regardless of who is at fault for the accident, your insurance company will not have to conduct an investigation before paying for repairs. This can potentially speed up the process by weeks, if not months.
- At Fault Driver is Uninsured or Underinsured. If the at fault driver does not have car insurance, or does not have enough insurance to cover your car repairs, you can use your Collision insurance coverage to pay for your repairs.
- Better Customer Service. Your insurance company wants to provide good service to keep your business. Insurance adjusters make an effort to answer and return your telephone calls, explain your insurance coverages, and provide your best options.
Disadvantages of Going Through My Insurance Company
- Deductible. You will likely have to pay a deductible in order for your car insurance company to pay for your vehicle repairs. A deductible is an amount of money that you have to pay out-of-pocket before your insurance company will pay out on a claim. Collision insurance deductibles are usually $0, $500, or $1,000. If you choose a lower deductible, your monthly payment will increase. If you choose a higher deductible, your monthly payment will decrease.
For example, if the cost of your car repairs is $15,000 and you have a $1,000 deductible, your insurance company would pay $14,000 for the repairs. You would be responsible for paying the $1,000 deductible out of your own pocket. It is important to know that your insurance company will reimburse you for the amount of your deductible if and when it recoups the money from the at fault driver’s insurance company.
Exception to Paying Deductible. Your insurance company can choose to waive your deductible. Usually, there are several requirements before your car insurance company will waive the deductible, including: (1) the cost of your car repairs must be more than your deductible, (2) another driver must be at fault for the car accident, (3) the at fault driver must have car insurance, and (4) the at fault driver’s car insurance company must accept fault.
- Rental Car Fees. Your car insurance company will only pay for your rental car fees if you have Rental Reimbursement insurance coverage. Otherwise, you will have to make a separate claim with the at fault driver’s insurance company to obtain a rental car or be reimbursed for out-of-pocket rental expenses.
- Loss of Use of Your Car. You have a right to be compensated for each day you don’t have use of a vehicle after your car accident. Your insurance company will not pay for the loss of use of your vehicle. You would have to make a separate claim for Loss of Use damages with the at fault party’s insurance company to be compensated for days you do not have use of a vehicle.
If My Car Has Significant Damages, Can I Request the Insurance Company Pay for My Car Instead of Repairs?
If there are significant damages to your car, your insurance company or the at fault driver’s insurance company can declare your car a total loss. California requires insurance companies to use a formula to determine if a vehicle is a total loss. California’s total loss formula is: Cost of Repairs + Salvage Value > Actual Cash Value. The salvage value is the value of your damaged car.
In some cases, insurance companies will not declare your car a total loss, even when the cost of repairs is a large percentage of your car’s Actual Cash Value. However, you may not want to keep a vehicle with significant repairs and a decreased re-sale value. Instead, you may prefer that the insurance company pay you the market value of your vehicle.
As discussed above, you can file a claim with the at fault driver’s insurance company or your insurance company to have your car repaired. Whatever insurance company you choose will complete a preliminary estimate, and possibly receive a supplemental estimate if further damages are discovered during repairs. If the cost of repairs + the salvage value does not exceed the Actual Cash Value of your car, the insurance company will not declare your car a total loss.
You may be able to challenge the insurance company’s decision not to declare your car a total loss. If you went through your insurance company for repairs, you may be able to invoke an “appraisal clause,” allowing you to obtain a damage estimate from a third-party appraiser. You would be responsible for the appraiser’s fee. If the appraiser’s estimate increases the cost of repairs enough to declare your car a total loss, your insurance company may change its decision and pay you the Actual Cash Value of your car.
If you originally went through the at fault driver’s insurance company for repairs, and your car was not declared a total loss, you could then file a claim with your car insurance company. Another preliminary estimate will be completed, and possibly another supplementary estimate. Your insurance company or another repair shop may find additional damages to your car, or estimate higher costs for the repairs. If so, your insurance company may declare your car a total loss and send you a check for the Actual Cash Value. If your insurance company agreed with the at fault driver’s insurance company that your car is not a total loss, you still have the option to invoke an appraisal clause, as described above.