Coverages related to property damage
Collision coverage is an optional first party coverage that you can purchase on your own policy. It will pay for damage to your vehicle as a result of a collision. Benefits under this coverage are payable regardless of fault. Even if you just ran into a telephone pole, you can still make collision claim. There is usually a deductible that you must pay. If another driver was at fault and you make a claim under your own collision coverage, your insurer will typically try to recover your deductible for you.
Towing coverage and rental car coverages are additional optional coverages that will cover costs associated with a collision. Benefits under these coverages are payable regardless of fault.
If the other driver was negligent or at fault for causing the collision, the other driver’s insurance policy provides coverage for property damage liability. State minimum limits for liability property damage is $10,000.00, and every insurance policy has this coverage. Most policies have higher limits. This coverage only pays for the other driver’s liability for property damage.
If the other driver was liable and had no insurance or insufficient limits to cover your property damage, then you may make use of your own policy’s optional coverage for UIM-PD or underinsured motorist property damage. This insurance coverage “stands in the shoes” of the other driver. If (1) the other driver was at fault, (2) he had only $10,000.00 of property damage liability coverage, and (3) your vehicle was worth $12,000.00, then you could make a claim for $2,000.00 under your UIM-PD coverage.
If the other driver was at fault, and your property damage was paid for by your own insurance, then your insurance company will assert a subrogated interest against the other driver’s insurance. This means that your own insurance will collect from the other guy’s insurance. In the process, your insurance will try to obtain your deductible and mail you a check.
I typically do not get involved in handling property damage claims. The main reason is that I cannot add much value by working on the claim (exception is with some rare or collectible cars). If your car can be repaired, I generally recommend that you have a shop of your choosing look at the damage and give you an independent estimate of repairs. Ideally, this is a shop that wants your business and will be getting paid for doing the work. Thus, they have an incentive to fix all damage done to the car. I generally recommend that people go through their own collision coverage rather than deal with the other driver’s insurance. I think things generally go more smoothly. Going through your own insurance requires you to pay a deductible, but if the other driver is at fault, then you should get this back. Insurance companies are usually pretty good about reimbursing deductibles in a timely manner.
If your car is totaled, insurance companies use a service that collects statistical data on car sales to value vehicles. These companies cater to the insurance industry and produce low-ball figures. Insurance companies do not use Blue Book, which typically has a higher value. If you disagree with their number, I would suggest looking in the newspaper or Auto Trader to find comparable vehicles to yours. You can also provide receipts for recent work that you had done to your car, custom parts, or other specifics that would help increase the value. My recommendation is that you put together the best documentation that you can, for the highest value you can reasonably support, then demand more money from the insurer three times. After the third time, unless they are still wildly undervaluing your vehicle, you should try to resolve the claim. The cost of fighting the value is typically higher than the increase you would achieve by litigating the matter. If after demanding more than three times, you still think that the insurer is way off, then litigation may be necessary.
