Usually the first thing staring you at the face after a car accident is the big, rusting, twisted piece of metal sitting in your driveway (or the towing impound lot).
Luckily, if all goes well, your car should be repaired or replaced in a couple weeks. But, if insurance companies decide to give you the runaround (as they are wont to do), then you could be looking at an endless loop of unreturned phone calls, broken commitments, and towing storage and rental car bills piling up in your mailbox.
Neither of us want that, do we. So here's what you do:
1. Point your finger at the right person (or insurance company). In a perfect world, the person who caused your car accident would get out of their car, apologize profusely, hand over their insurance information, and their insurance company would quickly pay for your rental car and repair or replace your vehicle to your utmost satisfaction.
Unfortunately, what usually happens is the person who causes your car accident stumbles out and starts pointing their finger at YOU. After you threaten to call the police, they reluctantly give you their insurance information, but tell their insurance company the opposite of what happened—that you caused the collision. Then their insurance company, hoping that you'll just go away, drags their feet, doesn't return your phone calls, or, worse, believes their insured's bogus story and denies your claim. All while you're answering angry phone calls from tow truck operators asking when you're going to come pick up your rusting, twisted piece of metal in their lot, or worse—when they're going to sell it to pay for all their storage charges.
2. Bite the bullet and make a claim on your own collision insurance coverage. If you're fortunate enough to have collision or "full" coverage on your car, then you can (and should) quickly make a claim on your own policy. Yes, it's not fair that your own insurance has to pay for someone else's mistake. But, as they say, "fair" comes once a year.
Your own insurance company has a duty under the Texas Insurance Code to treat you fairly and in good faith. It should quickly send an adjuster out to appraise your car and decide if it's repairable or a total loss. More on this later. Then it should put you in a rental car and quickly pay for the repairs or replace your vehicle. Simple as that.
Texas law forbids an insurance company from raising your insurance rates if you make a claim for a collision that was not your fault. But heaven knows what they really do. If you notice your rates go up, then shop around for a different insurance company. It's a competitive market with lots of companies fighting for customers. GEICO spent more than $1 billion last year on advertising alone. Someone else will be glad to have you.
3. What if I don't have full coverage? First, extend your left arm, with your palm facing up. Then contract all of your fingers and close your thumb around them to make a fist. Then quickly bend your elbow in such a way as to make your fist strike your face. There, now that you've successfully punched yourself in the face, read on.
You are at the mercy of whatever fly-by-night insurance company the person who hit you had or did not have. Contrary to whatever they may tell you on their TV commercials, insurance companies are not cute little lizards with Cockney accents or stern, deep-voiced men droning on about personal responsibility. They are a big, fat, emotionless corporations who exist for one reason and one reason only: To make money.
Insurance companies do not care about you. They barely care about their own customers. Insurance companies make money by doing one thing well: NOT PAYING CLAIMS. So do not expect them to roll over and pay yours. They have invested lots of time and money into big, fancy Wall Street business consultants who have taught them to "delay, deny, and defend" even legitimate claims. Why? Because the longer the insurance company holds onto its (your) money, the longer they can invest it and make more money in the stock market. You don't think Warren Buffet owns GEICO because he loves the insurance business do you? Of course not, I didn't think so. He owns it because it's a great way to invest more money in the stock market—something Mr. Buffet does quite well.
And GEICO is one of the better insurance companies. Thanks to Texas's deregulated auto insurance market, there are scores of new, fly-by-night operators who call themselves insurance companies but are really just scams. Texas Watch, a nonprofit consumer advocacy group, calls these insurance companies' products "junk policies." Why? Because they don't cover hardly anything and, even when they do, it's like pulling teeth to get them to pay.
So, if you don't have your own collision insurance, sit back, relax, and prepare to be ignored, low-balled, and bullied until you say uncle and call a lawyer.
Now, what if you don't have full coverage and the other driver does not have insurance at all? This is not the time to delay—call a lawyer. We will research your options and find out if we can help you.
4. What if my car is repairable? If the adjuster says your car can be fixed, then take it to any body shop you want. I like to start by calling the car dealer where I purchased my car and ask them for their recommendations. Most car dealers get body work done all the time and know a good body shop that can work on their particular vehicles. Use them.
Once you make an appointment, the body shop will have an estimator give you a written estimate. Most reputable body shops have a dedicated employee that does nothing but argue with insurance companies all day. They are A LOT better at this than you are. So shut your trap and let them do their jobs. When all's said and done, you should have a car that looks just like new.
But, you ask, what if my car is worth less now than it was before it was repaired. This is called "diminished value." And to prove it, you need to hire your own appraiser to come and give you an estimate for what your repaired car is worth versus what it would be worth before the wreck. This is expensive and usually not worth the cost unless you are driving a) a brand-new car right off the lot or b) a collectors or exotic car that has a subjective value up to exert determination. Again, talk with your lawyer and he or she can help.
5. What if my car is a total loss? Your car is "totaled" when it's worth less than the cost to repair it. If you have a big, fancy, expensive new car, then it will take more damage to total it than if it were an old, cheap jalopy. If your car is totaled, then your insurance company should quickly give you a written "total loss appraisal" that outlines the amount they are willing to pay for your car. This amount is the "fair market value" of your vehicle immediately before the collision, i.e., the amount you could have reasonably expected to sell your car for on Craigslist the day before the collision.
And no, contrary to what you might think, your car was not special. It was not worth more than 99% of all other Toyota Camrys driving around out there. It was just a car. It was metal and plastic and rubber and glass. That's it. The insurance companies use fairly sophisticated auto sales data software to spit out an accurate number here. So, unless you were driving a 1933 Duesenberg or an original Shelby Cobra at the time of your collision, then the number the insurance company gives you is usually accurate about 99.9% of the time. Take the money and run.
6. What about a rental car? Good question. Your car is wrecked or ruined and life goes on—you need to get to work, doctors' appointments, and your kids need rides to school and soccer practice. What do you do? Luckily, there are three ways to get into a rental car after a wreck—each with varying degrees of difficulty.
The first, and easiest way, is if you have rental coverage through your own insurance. This will quickly pay for a rental car usually for up to 30 days while your car is either totaled or repaired. Your car insurance company will usually have a deal worked out with a local rental outfit like Enterprise and you simply go to the rental car location and pick up a car with the rental car authorization number from your insurance company—no muss, no fuss. You will have to return your car when your car is fixed or totaled.
The second easiest way to get a rental car is to pay for it on your own. Just go onto any travel website like kayak.com and find a rental car and rent it. If you are hoping to be reimbursed later (more on that below), then make sure you rent the cheapest, yellow Chevy Cobalt you can find (no more than $25-$30 per day) and don't keep it very long.
The third—and hardest—way to get a rental car after a wreck is to wait for the other person's insurance company to pay for it through a "loss of use" claim. Unfortunately, this is like waiting for a cold-front in a Texas summer—excruciatingly rare and short-lived. By law, the driver who hit you must pay for your economic damages. Like I said above, this includes the cost to repair or replace your vehicle. It also includes money to compensate you for the "loss of use" of your car. Seems fair and simple enough, right?
Wrong. Thanks to some ridiculous interpretations of Texas case law, predicting exactly what and when insurance companies will pay for loss of use is like the Heisenberg principle of insurance law—it's impossible. Some insurance companies will immediately offer to put you in a rental vehicle with their own rental authorization number. Some will offer to reimburse you for your own rental receipts (up to a certain amount or time limit). Still others will refuse to pay altogether—citing a Texas appellate court case to say they don't have to pay loss of use on total loss claims (utterly insane, but this is what they think). And others will offer to pay a small fraction of the real cost of your loss of use claim on the hopes that you'll just give up and take their money.
In the end, talk to your lawyer. We know the law and how to deal with each of these situations.
7. I'm mad. I had just finished paying off my car and now I have to go buy a new one. Shouldn't the insurance company have to pay for that? No. Think of this from the Golden Rule perspective. If you caused a collision and damaged someone else's property, you would of course accept responsibility and offer to pay for the damage. I'm sure you would think it was fair to pay to repair or replace the property. But what if the property you damaged was old, used, and worn-out? And what if the owner demanded that, instead of repairing or replacing the old, used, and worn-out property, you had to buy them a brand, sparkling, spanking new one? Catch my drift? That ain't right.
So that's why the law demands that the person who hit you pay to repair or replace your vehicle—not a brand-new version of your vehicle, but the same dirty, smelly, cat-hair covered thing you were driving before this collision. Theoretically, you can take the money and go buy another car just the same as the old one. So if you were driving a 1997 Chevy Caprice with 170,000 miles on it, you can turn around and go buy another 1997 Caprice with 170,000 miles. Or, if you want, you can pay the difference and buy a brand new one (don't get another Caprice). It's your choice and it's the cycle of life.
8. This sucks. I still owe money on my totaled car. Now what? Yes, this does suck. No one likes to pay money for something they don't get to enjoy. And your mangled, wrecked, P.O.S. in the towing yard is certainly giving you no love. But you still owe money—maybe even more than it's worth—on that thing. But your bank don't care—it wants to get paid. So what do you do?
Luckily, if you thought ahead, you have what's called "gap" insurance. This covers the "gap" between what your totaled car is worth and what you owe. It's not expensive and you usually can buy it anytime after you buy a car. Unless you put a lot down on your car and are not upside down in your loan, It is a very, very good idea.
But let's say you're like most of us and didn't plan ahead. The insurance company will not pay you for your car unless your lien holder (the car loan bank) is on the check and, if you owe more than your car is worth, then all of the money will go to them. Then you're stuck making payments on a car you no longer have. This can be a problem. Again, talk to your lawyer. We may be able to help you make additional claims and recover more money to help offset the difference.
9. Believe it or not, your property damage claim is not that big of a deal. Remember the old saying: If it's a problem that can be fixed with money, it's not a problem. Count your blessings. If the biggest problem you have after your car collision is a wrecked car, you're lucky. It could be a lot worse. As long as you and your loved ones are healthy and safe, you can be happy. Remember the saying: Where there is life, there is hope. Your property damage claim will be over before you know it. You will soon be in a fixed or new car and forget all the trouble you went through. It's going to be OK.
If you have any more questions, call us at 512-329-6800. We'll be happy to help you.