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FAQ's on Auto Accident & Handling of
Minor Car Accident Claims
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Should I get more than the cost of the
repair?
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What is the difference between "betterment" and "depreciation?"
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What if my car is "totaled?"
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What do I do if the company gives me a comparative negligence assignment?
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Should I get more than the cost of the repair?
If the value of
the repaired car has been reduced because of the collision repair, even if done
properly, you should demand an additional payment in the amount that the value
has dropped. This happens, for example, when a collector car or antique car is
extensively damaged and its resale value has been hurt because of the mere fact
that it is no longer "original".
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What is the
difference between "betterment" and "depreciation?"
Both terms refer to reductions in your settlement. Betterment means that your
repaired vehicle is better than it was before it was damaged. Your insurance
company can only charge you for betterment if the repairs increase your
vehicle's resale value over what it was before the accident.
Depreciation refers to a reduction in your settlement based on the age or use of
a part that is to be replaced. Certain parts on your vehicle have a live
expectancy and your insurance company may take this into consideration. For
example, if a tire on your vehicle is expected to last 60,000 miles, but it was
used for 30,000 miles at the time of the accident, your insurance company may
elect to pay only 50% for a new tire. The company can also deduct the difference
in cost if you insist on using a new part, rather than an available used part,
appropriate for the age and condition of the vehicle.
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What if my car is "TOTALED?"
Your car is
"totaled" if the cost of repair is more than the actual fair cash market
value of the car just before the accident occurred. If it would cost more to fix the
car than it would to buy one just like it, you get the cash value of the car
just before it was wrecked, rather than the cost of repair. You should also get
the sales tax on the market value, plus the value of the unexpired term of your
license tabs.
There is no
single "book price" that decides the value of your car, but there are many
sources you can look to. Bank loan officers and car dealers often have the N.A.D.A. Official Used Car Guide or similar guidebook available. Or,
click here to get the value of your car from
Kelley Blue Book. Some insurance companies use a "market analysis" company that
prints value reports of similar cars after supposedly checking the market.
Whether the insurance company uses one of these evaluation firms or does its own
evaluation, the method the company uses must be documented. You can ask to see
the evaluation and ask how the fair market value was determined.
If
you recently bought your car, the purchase price is evidence of its value,
keeping in mind that cars depreciate rapidly. Local ads for similar cars can be
considered. You should check with dealers, newspaper ads, used vehicle
publications, and other sources to gather your own information on your vehicle's
fair market value to compare with the value provided by the insurance company.
You have the right to negotiate with the company if you believe your car was
worth more than what they offer.
Once the
insurance company has paid you the fair market value for your vehicle, the company becomes the owner of
the car. Accordingly, the company can decide whether to sell the car back to you
or retain it for its own use. Technically, if the company does sell it back to
you, it can determine the price. But, if you want to keep your totaled car for any reason, you should
negotiate a "salvage value" with the insurance company. The salvage value can be
deducted from your check if you are going to keep the car.
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What do I do if the company gives me a comparative negligence assignment?
Insurance companies are required to conduct a reasonable investigation and offer
a fair settlement once liability has become reasonably clear. Your settlement
may be reduced if the investigation determines that you were even partially
responsible for the accident.
If the facts of the case seem clear and you believe the other party's carrier
made an unreasonable determination of comparative negligence, you may complain
to the Department of Commerce. You may also take the drive of the other car to
Conciliation Court if the amount of your claim is below the Court's dollar
ceiling. Note: Minnesota law does not allow insurers to automatically assign a
percentage of negligence simply because you were involved in the accident.
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