How Does a Property Damage Claim Work?

Property damage is the first portion of your claim that should be handled and settled immediately. Before the other insurance company will agree to settle this aspect of your claim, the insurance company is allowed a reasonable amount of time to talk with its insured and collect certain investigative facts. The Arizona Department of Insurance has issued rules that indicate that 30 days is a reasonable amount of time for an insurance company to investigate a claim. However, many of us cannot wait that long to start a repair of our vehicle or be without rental transportation. Often our own insurance company gives us the "bum's rush" and advises someone to go through the at fault driver's insurance company rather than through our own insurance company despite the fact that we have bought insurance coverage that obligates them to help us. If you bought property damage coverage, your own company is contractually obligated to help you. Sometimes it is better to go through our own company rather than wait for the result of 30 days of investigation. First, you have choices to make and actions you need to take to protect yourself. If the car was towed to a tow yard by the police, it is likely a total loss. If you were able to drive it from the accident scene, it may be repairable. In any event, take pictures of the vehicle and any other vehicles involved in the accident. If the vehicle is sitting on a tow yard, get down there as fast as you can as personal property items tend to mysteriously disappear. If it is drivable, you will need to select one body shop where you want the repair work done to give you an initial estimate. This estimate is a visual estimate and once they get into the repair they may find additional damage that was not initially visible. What happens next depends on whether the car is a total loss or not.

If it is a total loss, a storage charge is accruing each day the car sits on the tow lot. This is your expense and insurance companies require you to mitigate your damages. What this means is that you have got to get the insurance company out there evaluating it as soon as possible. Remember, the other driver’s insurance company has 30 days to conduct its investigation. If you wait that long you may not like the storage charge you incur and won’t be reimbursed for from the insurance company. (Storage charges range from $10 to $30 per day.) It is also a long wait if you do not have any other transportation to use. Thus, it is often better to utilize your own insurance company and be charged a deductible then incur the storage expense.

The next step in a total loss claim is to figure out the fair market value of your vehicle. On our resource page we have links to various organizations that let you plug in information about your car and print off a value. An insurance company owes you the fair market value of your vehicle plus tax and license fees. Fair market value is determined by how much you could sell your car to a third party, not the retail price. It is not what you owe on it or paid for it. The insurance company should present you with a total loss offer sheet that shows you exactly how they calculated this amount. If you have done your homework beforehand, you will have a better sense of whether that offer is fair.

If your car is repairable, or might be repairable, then your next step after picking a body shop is to contact the insurance company about inspecting the vehicle and authorizing the repair. Remember you get to pick the shop the insurance company does not. Remember our warnings about giving recorded statements. You don’t have to give a statement to get a repair started. While your car is being repaired they need to put you in a rental vehicle or pay you a per diem loss of use fee. If they are unwilling to set up a direct billing with the rental agency, you can either put the rental car (no more than $23.00 per day) on your credit card and get reimbursed by the insurance company when they make final payment on your car or make arrangements to borrow a car from a friend or family member. You are entitled to approximately $15.00 per day loss of use reimbursement if you do not rent a replacement car while yours is being repaired.

Confirm all your conversations with the adjuster with written notes as often as possible. And, remember the auto dealer repair shops take in more work than they can process, so don’t assume they are repairing your vehicle. Check in with the service people regularly.

Finally, remember this process is not an exact science. The cost to repair your car or the value of your car falls within a range of values. You will want to negotiate an offer with the adjuster that is at the higher end of the range.

Typically, when our office is retained to assist someone with an injury claim, we will also provide assistance and guidance on navigating through the headaches of a property damage claim at no additional cost. If you would like us to evaluate your claim and whether we can be of assistance to you, please contact us online or at 877.424.5547. You can also download “The Car Accident Handbook” on iTunes for a property damage claim worksheet, and a list of repair shops near you.