YOUR CAR IS WRECKED - NOW WHAT?
Car mishaps involving collisions, deer, snow and ice, floods, thefts, vandalism, or other unfortunate events are common. Here are some tips to help you negotiate the minefield of car insurance and repair issues.
Collision vs. Comprehensive Coverage
On your own car insurance policy, you can purchase insurance to protect your car from peril. Collision coverage protects you from accidents which are deemed your fault. If you crash into another car, building, tree, etc., Collision coverage will pay to fix it. Comprehensive coverage protects you from damage caused by deer or other animal crashes, theft, flood, vandalism, or other events not involving collisions. If your car is damaged by one of these events, your Comprehensive coverage will reimburse you. If you finance or lease your car, you will likely be required to purchase Collision and Comprehensive coverage. It is also a good idea to purchase this coverage if you have a relatively new car which would be expensive to repair or replace. The cost of Collision or Comprehensive coverage can be reduced by increasing your deductible, which is the amount you have to pay yourself before the insurance company must start paying for damage or loss.
GAP (Guaranteed Auto Protection) Insurance
If your car is wrecked and “totaled” (cannot be repaired for less than its value), then you might end up owing more to your bank or lease company than your insurance will pay you for your car. Insurance must pay the Actual Cash Value (ACV) of the car, which is often much less than you owe because vehicles depreciate in value quickly. GAP insurance will make up the difference so that you do not end up upside down on your loan or lease. If the ACV is $10,000, but you owe $15,000 on your loan or lease, GAP insurance makes up the $5,000 shortfall.
Tips for Totaled Cars
If the insurance company decides that your car will cost more to fix than its ACV, it will be totaled. If the car was totaled because of a collision caused by another driver, you can make an insurance claim against that driver or with your Collision coverage. Talk to your attorney and insurance agent to decide which would be best for you.When your car is totaled, consider the following:* Clean the car before it is appraised. This can add to value.* Tell the appraiser about recent repairs and special equipment on the car. Make sure that all of your car’s options and upgrades have been included in the appraisal and the car’s condition was properly rated.* Research car values and sales on the Internet. Do not accept the first offer - negotiate a fair price.* Insist on a fair number of days in the rental car to allow you to find a new car.
Tips for Fixing Your Wrecked Car
The insurance company may try to steer you to their “approved shop.” Beware of the potential conflict of interest. If the shop does substantial work for the insurance company, there may be a motive to cut costs in repairing your car. You have the right to choose where your car will be repaired. Get a referral from someone you trust. Check references and research the shop’s reputation. Also, be sure to ask what parts will be used in the repair, Manufacturer Parts, After-Market Parts (non-Manufacturer but new), or Used Parts from a junk yard. Although your insurance policy usually governs what type of parts can be used, you have a right to know what will be used and why. If the collision was the fault of another driver, you can choose to go through the other driver’s policy or your own Collision coverage to get the car fixed. Talk to your insurance agent, attorney and body shop about which would be better given your situation. As with a totaled car, insist on a fair number of days in a rental vehicle while your car is being repaired.