Were you recently involved in a car accident in North Carolina? Do you have a lot of questions no one has answered yet? Below the car accident attorneys at Kreger Brodish LLP, answer some of the most frequently asked questions clients have regarding their car crashes.
If you’ve recently been injured in a car accident, the lawyers at Kreger Brodish LLP can help you understand your options for pursuing the maximum possible compensation for your injuries and dealing with insurance companies. Contact us for a free consultation.
Can I Speak to the Insurance Adjuster on My Own about My Property Damage Claim?
Yes, and in most cases, you should. If you do not discuss your injury claim with the adjuster, speaking to them about your property damage claim will not harm your injury case. In fact, it is more cost-effective and time-efficient to negotiate the property damage claim on your own. Unlike injury claims, where an attorney can make an enormous impact on the amount of your settlement, on property damage claims, an attorney cannot typically make a substantial impact on the amount of your property damage settlement (because vehicles, unlike bodies, have price tags and book values).
As a result, hiring an attorney to negotiate your property damage claim can cost you money and sometimes unnecessarily delay the property damage negotiation process. If you have retained us to represent you in your injury case, please know that while we don’t typically negotiate the property damage settlement for you, we will advise you and consult with you as much as you need, completely free of charge.
If My Vehicle Is a Total Loss, How Much Money Will I Get for It?
A vehicle is considered a “total loss” when the cost of repairs (including supplemental claims such as the projected cost of a rental vehicle during the repair period) equals or exceeds 75 percent of the pre-accident cash value, often referred to as the fair market value (FMV). The at-fault driver, typically through their liability insurance carrier, is required to pay FMV for your vehicle. FMV is “the price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts” (I.R.S. Revenue Ruling 59-60).
While that’s the legal definition of FMV, a way to make sense of that legalese and find an estimated FMV of your vehicle is to think about how you yourself would assess the value of a vehicle. If you’re like us, when we purchase vehicles we look at book values on various websites, like kbb.com, nada.com, edmunds.com, camax.com, etc. Adjusters usually have a book value (BV) they use to determine FMV (sometimes a proprietary value created by the insurance company, and other times a 3rd party company that is paid a fee by the insurance company to provide a BV).
Whether you find the value through your own research, or the insurance company finds the value through its own tools, there is usually a little room for both sides to negotiate based on the condition of the vehicle. In other words, BV is the same in theory as FMV, but in practice they are not always equal. Some insurance companies use the National Automobile Dealers Association (NADA) publication “Official Used Car Guide,” which is available online at www.nadaguides.com. The important thing to remember is that no “guide” is completely accurate; therefore, there is usually some room for negotiation between you and the insurance adjuster.
What If We Can’t Agree on a Valuation?
If you and the adjuster are unable to agree as to FMV, then the adjuster is required to base any further settlement offer on “local FMV,” which is determined by using either the local market price of a comparable vehicle or quotes from at least two qualified dealers within the local market area. In any case, you should require that the adjuster give you a written statement with the total loss payment. This statement should include estimates, evaluations, and deductions used in calculating the payment, as well as the source of these values.
What Does “Salvage Value” Mean?
If your vehicle is a total loss, and you and the adjuster agree on an FMV settlement, then you must sign over the title of the vehicle and turn over possession of the vehicle to the insurance company. In other words, the insurance company is paying you the full value of the vehicle in exchange for receiving the vehicle.
If you want to keep the vehicle, the insurance company will not want to pay you full value, as the insurance company is not receiving the vehicle. Even a totaled vehicle still has value, and the value of a vehicle that is totaled is called “salvage value.” Salvaged vehicles, or vehicles that are labeled a total loss, can be sold to a salvage dealer for scrap metal and parts. If you would like to keep your salvaged vehicle, the insurance company will obtain quotes from salvage dealers, and deduct the value of the salvage from the amount the insurance company is paying you for your total loss.
Prior to agreeing to a settlement in which you keep your salvaged vehicle and the insurance company pays you less than the FMV, you have the right to request, in writing, the names and addresses of the salvage dealers from whom the insurance company obtained quotes for the salvage value of your vehicle. If you prefer to keep the vehicle and sell it to a salvage dealer yourself, you must accept a check from the insurance company in the amount of the FMV minus the salvage value. If you allow the insurance company to take possession of your salvaged vehicle, then the check from the insurance company will be in the amount of the FMV without any deductions for the salvage value.