Understanding Your Auto Insurance Coverage Part 5: Comprehensive Property Damage

Comprehensive property damage is the coverage that will pay for your car to be repaired or replaced if you are involved in an car accident. If you are responsible for causing the crash, this coverage will pay for your vehicle, but your insurance company may increase your premiums. Nevertheless, even if you did not cause the auto accident and there is another driver at fault, I often encourage my clients to utilize their comprehensive coverage instead of the at-fault driver's coverage because your insurance company will generally treat you more fairly in evaluating and assessing the damage to your vehicle. More importantly, if you did not cause the crash, using your comprehensive coverage should not affect or increase your premium.

There are two main concerns that arise when your car is damaged in an auto collision.

(1) If your car has to be replaced, how do you determine the value of the total loss of your vehicle?

(2) In cases where the vehicle can be repaired, is it acceptable for your insurance company to repair your vehicle using refurbished or aftermarket parts?

1) REPLACEMENT OF VEHICLE:
If your car is so damaged after a collision that it must be totaled, your insurance company is obligated to pay you the replacement value of your vehicle. For example, if you own a 1999 Jeep Grand Cherokee with new tires and 100,000 miles on the odometer, then your insurance company must determine and pay you an amount of money that would allow you to purchase the same vehicle to replace the one that was totaled. To make this determination, your insurance adjuster must do his or her homework.

Like any other kind of appraisal, your adjuster must assess the marketplace for "apples to apples" comparisons to determine the value of your vehicle. Insurance companies have databases that they look at to see what similar vehicles in your area have sold for. When you are dealing with an adjuster who is evaluating the value of your car, do not be afraid to ask the adjuster to show you the market research. Generally, looking at the market research of the value of your damaged vehicle will allow you to make good arguments as to why the adjuster should pay you more on your claim.

2) REPAIR OF VEHICLE:
If you have comprehensive coverage, this coverage should ensure that if your car is damaged in a collision, it should be replaced or returned to you in the condition that it was in before the crash.

Oftentimes, my clients ask me whether repair shops are allowed to cut corners on repairs by using refurbished or aftermarket parts. In these cases, you need to look at the language of the contract between you and your insurance company. Sometimes, the insurance contract specifically details the right of the insurance company to use refurbished or aftermarket parts in the repair of your vehicle.

Most of the time, the contract simply states that the insurance company is obligated to comparably repair your vehicle. This language lends itself to the winning argument that "my car that had original parts in it before the crash should not be repaired with old or aftermarket parts because that would not put me back where I was before the car accident."

Another benefit that policyholders often miss out on is compensation for the "loss of use" of your vehicle. If your car requires major repairs and has to go the shop for a month, you will end up driving around a rental car while your car is being repaired. Most likely, the car that is being repaired was funded through a bank loan or a lease that is still being paid.

Accordingly, why should you have to pay for the lease on a BMW that is being repaired while you are driving around a rental vehicle? The insurance company understands this argument and will often agree to pay you something for the loss of use of your vehicle while it is being repaired. Unfortunately, most policyholders do not know about this type of coverage and the insurance company will avoid paying for loss of use simply by not informing their policyholders of this available coverage.

CONCLUSION:
At Anderson Hemmat, we understand that being injured in a collision is difficult enough without having to worry about trying to comprehend the various types of insurance coverage available to you both under your auto policy as well as the at-fault driver's policy. On top of that, you may be having to understand the complicated overlapping of health insurance benefits with auto policy benefits.

Our goal is to help give you peace of mind, so that you can focus only on recovering from your injuries. If you are injured in an auto collision, call us today for a free consultation. We will be happy to discuss the various strategies available to make sure you utilize all insurance coverage available to you.