Automobile and motorcycle accidents do not happen in a vacuum. They can disrupt your daily life and create a whole series of problems, some of which the insurance carrier handling your claim will not want to be responsible for. In addition, insurance carriers are not always quick to help take care of those problems for which they are taking responsibility. As a result, car accident victims can often find themselves in situation that is confusing and frustrating. My hope is that by writing this article, I can help take some of the confusion and frustration out of the early part of the experience.
Typically, insurance carriers in North Carolina will treat an automobile accident claim as having two parts – the property damage claim and the bodily injury claim. In other words, insurance carriers will pay for damage to physical items like a vehicle separately from payments for damage to a living person.
Typical Sources of Confusion for the Damaged Party
Investigation/Delay – A lot of people involved in a motor vehicle accident are frustrated when the insurance carrier for the other driver will not immediately place them in a rental car or otherwise agree to accept liability for the accident. They do not realize the insurance adjuster handling the claim has a list of activities they have to complete before their supervisor will allow them to start making arrangements to deal with damaged vehicles and injured people. Until they complete this investigation, they are not likely to pay anything on your claim. As a matter of fact, part of this investigation may be to ask you for a recorded statement and since insurance adjusters may interpret what you are saying in a way you do not intend, it is almost always a good idea to consult with an attorney at this stage in your claim. In other words, don’t talk yourself into a claim denial – consider engaging a professional to deal with the insurance company for you.
The repair process – When getting your vehicle repaired, you have the right to take your vehicle to any body shop your heart desires; however, you should not assume the insurance carrier has an obligation to pay whatever a shop wants to charge. The easy way to avoid getting in the middle of a dispute between the insurance carrier and the body shop you have chosen is to get the body shop to deal directly with the insurance carrier. A lot of body shops do business with insurance carriers on a routine basis and finding one that can talk about the repairs with the insurance carrier for you is generally not that difficult. Oftentimes the insurance carrier arranging for repairs to your vehicle will have one or more repair shops they recommend. Using a recommended shop can be advantageous in that sometimes both the repair shop and the insurance carrier will guarantee the work. In addition, if you choose the repair shop and there is a delay getting the repairs made, the insurance carrier may become uncooperative when it comes to paying for you to continue to use the rental car.
The amount offered for a vehicle that is a total loss – If the fair market value of the repairs to the vehicle are equal to or greater than 75% of the fair market value of the vehicle, then the vehicle is a total loss. When your vehicle is a total loss, you are entitled to the fair market value of your vehicle instead of the cost of repairs. The fair market value of your vehicle is the relevant number, not replacement value or sentimental value. If you owned a 12 year old Honda worth $5,000 and the insurance carrier pays you the $5,000, then under North Carolina law, you have been made whole. While this reasoning leaves much to be desired when you are left with a car loan you must pay off and no vehicle to drive, the fair market value of the vehicle is the value of your property damage claim when your car is a total loss. To the extent that work has been performed on your vehicle prior to the collision, you should gather paperwork related to that work to present to the insurance carrier to support any increased vehicle value.
Personal property damaged – Under North Carolina law you have a claim for the fair market value of the costs of the repairs to damaged personal property after an accident. Understand that you as the injured party (i.e. Claimant) have the obligation to prove every aspect of your case. This is important with respect to any personal property that was not part of the vehicle. Do not assume the insurance carrier will compensate you for personal property without being asked to do so and you will generally need to produce receipts or other proof of ownership as well as evidence of the fair market value of the item at issue or the cost to repair the item at issue.
Storage charges and moving the vehicle – Typically, after an insurance carrier completes their investigation and decides to accept liability for the collision, they will want to move a vehicle that is a total loss from its current location to a location they own prior to paying for the vehicle. They do so to avoid the storage charges that the vehicle is incurring when it is sitting at the tow yard. Failure to allow them to move the vehicle in a timely manner will make the insurance carrier uncooperative when it comes to paying for those storage charges. Failing to move the vehicle from the tow yard will result in storage charges that the owner of the car is responsible for paying.
Understanding what the insurance carrier does and does not have to do – Insurance companies are there to protect the person that they insure. As the injured party, you are usually making a claim against someone else’s insurance policy and as a result, the insurance carrier’s duty is to protect someone other than the injured party. The claims process is a convenient way of dealing with the claim without either party having to file a lawsuit and while insurance regulations prevent an insurance company from completely ignoring a claim, the insurance carrier is not required to look out for your best interests at all. People are often surprised to find out that automobile insurance policies do not work at all like health insurance policies. One of the biggest surprises people face is that the at-fault driver’s insurance carrier is not obligated to pay for treatment while you are treating like a health insurance carrier would typically do. Instead, the law gives you a right to go to court and prove your damages to receive compensation for those damages AFTER you have incurred them.
There are a number of other issues to be wary of when dealing with the insurance company. Stay tuned for part II of this blog – Typical Mistakes Made by Injured People Dealing with Insurance Companies.