This article is a general overview of the insurance claims process for vehicles damaged in California traffic accidents. The same process applies whether your vehicle was a car or a motorcycle.
Insurance Coverage
Under California law, every private passenger motor vehicle driver must have at least $35,000 in liability insurance or cash deposit with the DMV. Liability insurance compensates a person other than the policyholder for personal injury or property damage. The CA minimum liability insurance coverage is 15/30/5, which means:
- $15,000 for injury/death per person,
- $30,000 for injury/death per accident, and
- $5,000 for property damage.
If your vehicle was damaged in an accident that was somebody else’s fault, that person’s liability insurance comes into play. If you have collision coverage through your own insurance company, you can make a claim either with your own insurance company or with the at-fault person’s insurance company. If you were not at fault for the accident, then making a claim with your own insurance company for property damage should not impact your insurance rates. Insurance Code § 491. The insurance companies use witness statements, photographs, and traffic collision reports to determine fault.
Repair vs. Total Loss
If you have collision coverage, then your insurance company will pay either to repair or to total your vehicle. Generally, if the estimated cost to repair your vehicle is less than 65% of its fair market value, the insurance company will pay for your vehicle to be repaired. If the repair estimate is more than 65% of your vehicle’s fair market value, then the insurance company will typically consider your vehicle a total loss. If your vehicle is a total loss, your total loss settlement will include the fair market value of your vehicle at the time of the loss, sales tax, and transfer fees. A total loss payout is akin to a forced sale of your vehicle at the time of the loss. If you think your car was worth more than the insurance company’s evaluation, then you can negotiate with the total loss adjuster by providing the Kelley Blue Book valuation or listings for similar vehicles in your area from Craigslist or Autotrader. If you wish to keep your totaled vehicle, the salvage value will be deducted from the settlement and you will need to apply to the DMV for a Salvage Certificate.
Most collision coverage policies have a deductible. A deductible is an amount of money that is deducted from your claim. For example, if your deductible is $500, then you will have to pay $500 towards the repair of your vehicle or $500 will be subtracted from your total loss payout. If you were not at fault for the crash, then your insurance company will go after the at-fault person’s insurance company for their money back plus your deductible. This process is called subrogation. When there is a subrogation dispute between the insurance companies as to who was at fault, a neutral arbitrator decides who was at fault and the insurance companies are bound by that decision. If your deductible is recovered by your insurance company in subrogation, then your insurance company will return the deductible amount to you.
If you do not have collision coverage, then you will need to make a claim with the at-fault person’s insurance company for your property damage. There is no deductible when making a property damage claim with the at-fault person’s insurance company. However, the at-fault person’s policy limit for property damage is the most you will be able to recover from the insurance company, no matter what your vehicle is worth. Remember: the CA state minimum for property damage liability insurance is $5,000. If the at-fault person damaged multiple vehicles, then the policy limit will need to cover all damaged vehicles. When there is a coverage issue such as this, multiple claims are pro-rated against each other towards the policy limit. This is one reason why it is important to purchase collision coverage!
Protective Gear (Motorcycles)
Collision coverage for motorcycles typically includes a policy allowance for damaged protective gear. If your helmet got hit in the crash, replace it! Even a seemingly minor impact can cause the protective absorption material to crack, which compromises the helmet’s overall performance for next time. If you do not have coverage for protective gear through your own insurance company, then you can include those costs in the property damage claim with the at-fault person’s insurance company.
Loss of Use
If you have Loss of Use (LOU) or rental coverage, your insurance company will pay for a rental up to the limit of your coverage. For example, if your coverage is 30/900, then your insurance company will pay for a $30/day rental up to 30 days. The rental will come in handy if you were injured and need to travel to doctor appointments.
Alternatively, you can make a claim for Loss of Use with the at-fault party’s insurance company. Many insurance companies receive bulk-rate discounts from rental companies like Enterprise Rent-A-Car and Hertz. If you accept a rental from the at-fault party, make sure the adjuster is clear about how many days of rental they are providing. An unscrupulous adjuster might stop paying before you return the rental, causing your credit card for incidentals to be charged for the remaining days. Because California law defines the Loss of Use claim as the rental value of a similar vehicle for the amount of time you are deprived of the use of your vehicle, actual rental of the vehicle is not required. You can claim the rental value of a comparable vehicle for the number of days it takes to repair your vehicle or negotiate your total loss payout. If your vehicle was a motorcycle or sports car, the Loss of Use value can be significant.
Towing/Storage
If you have towing/storage coverage, your insurance company will pay for the towing and storage fees up to the limit of your coverage. If you do not have towing/storage coverage, or if the fees exceed your coverage limits, you can include those fees in the property damage claim with the at-fault person’s insurance company.
Be sure to inform the insurance companies right away if your vehicle was towed from the scene. Storage fees add up quickly! You have a duty to mitigate your damages, which means you must act reasonably to protect your property from further harm. An unreasonable delay in removing your vehicle from the storage facility can cost you your entire property damage settlement!
Your property damage claim is separate from your personal injury claim. Most insurance companies assign one adjuster or team to handle the property damage claim, and a different adjuster to handle the personal injury claim. Almost all property damage claims settle long before the related personal injury claims. That is because personal injury claims are much more complex than property damage claims. In fact, simply because there is little or no damage to your vehicle does not mean that you were not injured. If you think you were injured in a motor vehicle accident, do not attempt to handle your personal injury claim alone. Call a personal injury lawyer for a free consultation today.