Dealing
with injuries sustained in an accident is bad enough, but in most cases of
motor vehicle collisions the person is also faced with a damaged car and the
problems of dealing with an insurance company on the property damage.
The
first thing to realize in these situations is that a car may be “totaled” even
though it clearly can be repaired to a perfectly drivable condition. The fact is that the insurance company doesn’t
have to pay for repairs which are higher than the value of the car.
Since
repairs are quite commonly expensive and since the value of cars diminishes
fairly rapidly with time, the estimated cost of repairs to a damaged car, even
where the damage appears to be superficial, can easily exceed the value of a
car even one which is only a year or two old.
Where this is the case, the car will be deemed “totaled”, and the insurance
company will pay the market value of the car.
There
are a couple of problems here that many owners will face. One is that the value of the car, and thus
the amount being paid, is lower than the amount owed on a car loan. Typically following purchase a car will lose
value faster than the car payments will reduce the loan, so that getting paid
the value of the car will not be enough to pay off the loan. Most car insurance policies offer an option
of “gap insurance” which will take care of the deficiency if the car is
totaled. Purchasing this optional
coverage is well worth the money to avoid ending up owing the financing company
more after settling the property damage claim.
The
other problem is that the insurance company is likely to use a method of
evaluation which will understate the fair market value of the car, so it is
important to be in a position to challenge the insurance company’s proposed
value and to negotiate a higher amount.
At Lowry & Associates we are accustomed to dealing with these issues
and are often successful in saving our clients quite a bit of money, a service
for which we make no extra charge.
If you
have been in an accident, it is a good idea to contact us to see if we can
help. You can call at
800-999-LEGAL(5342) or fill out the contact form on our web site
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