Dealing with damage to your car can be incredibly stressful and confusing. Many car owners immediately wonder, “Will insurance repair my car?” The good news is, in many cases, yes, your car insurance is designed to cover the costs of repairs after an accident or other covered incident. However, understanding the specifics of your policy and the claims process is crucial. This guide, based on insights from insurance authorities, will walk you through the key aspects of car insurance repairs, ensuring you’re informed and prepared when you need to file a claim.
Understanding Your Rights When Choosing a Repair Shop
One of the first questions that comes to mind after an accident is where to take your car for repairs. You might be surprised to learn that you have the right to choose any repair shop you prefer. Insurance companies cannot dictate where you must have your vehicle fixed. Whether you prefer a dealership, a local mechanic you trust, or a specialized body shop, the choice is entirely yours.
It’s important to remember that even if your car was towed to a specific shop immediately after an accident, you are not obligated to have the repairs done there. Take the time to research and select a shop where you feel confident in the quality of their work and customer service.
Preferred Repair Shop Lists: What You Need to Know
Insurance companies often provide lists of “preferred” or “network” repair shops. While it might seem convenient to choose from this list, it’s essential to understand why insurers suggest these shops. Insurance companies frequently have agreements with these preferred shops to perform repairs at a pre-negotiated, and often lower, cost. This arrangement benefits the insurer by helping to control expenses.
While using a preferred shop can sometimes streamline the claims process, you are not legally required to choose a shop from the insurance company’s list. You always have the option to select a repair facility outside of their network. Consider getting estimates from multiple shops, including those on and off the preferred list, to make an informed decision that best suits your needs and priorities.
Negotiating Repair Costs: What Happens if There’s a Disagreement?
Ideally, your chosen repair shop and your insurance company will agree on a fair price for the necessary repairs. However, sometimes disagreements arise regarding the cost of labor or parts. It is possible for a repair shop to charge more than what your insurance company is initially willing to pay.
In most situations, the repair shop will work directly with your insurer to reach an agreed-upon price. If they cannot come to an agreement, you have the right to request that your insurance company re-evaluate the repair shop’s estimate.
However, it’s critical to understand that if the insurer and the repair shop still cannot agree on a price, you might be responsible for paying the difference. This difference typically involves the gap between the repair shop’s labor rate and the rate the insurance company is willing to cover. Insurance departments generally do not have the authority to regulate or dictate labor rates charged by repair shops.
Avoiding Out-of-Pocket Expenses: Proactive Steps
To minimize the risk of paying out-of-pocket expenses due to disagreements over repair costs, it is crucial to ensure that no repairs begin until you have written confirmation from your insurance company that they have reached a price agreement with the repair shop.
Before authorizing any work, request written confirmation detailing the agreed-upon repair price. This protects you from unexpected bills and ensures transparency throughout the repair process.
If the insurance company and the repair shop cannot agree on a price, you generally have a couple of options:
- Pay the Difference: You can choose to pay the difference between the shop’s estimate and the insurer’s approved amount to proceed with your preferred repair shop.
- Negotiate with the Shop: You might try to negotiate with the repair shop to see if they can lower their price to align more closely with the insurance company’s offer.
- Seek Arbitration (If Available): In some cases, and depending on your location, you might have access to an arbitration program through your insurance department to help resolve disputes over repair amounts without going to court.
Resolving Disputes: Insurance Arbitration Programs
If you find yourself in a situation where you disagree with the amount your insurance company is offering to pay for repairs, there may be options for dispute resolution outside of court. Many insurance departments offer arbitration programs specifically designed to handle disagreements over auto physical damage claims.
These arbitration programs are typically available when insurance coverage and liability for the damage are not in dispute. In most cases, arbitration focuses solely on the amount of the damages and the reasonable cost of repairs.
To access an arbitration program, you usually need to file a complaint with your state’s Insurance Department’s Consumer Affairs Division. If the department is unable to resolve the dispute through mediation, they may offer access to the arbitration program. This can be a valuable tool to reach a fair settlement without the expense and time of legal proceedings.
It’s important to note that arbitration eligibility often applies only to the claimant (the insured vehicle owner), not directly to third-party service providers like auto body shops. While repair shops can provide technical assistance or expert opinions during arbitration, they generally cannot initiate or directly participate in the arbitration process in place of the vehicle owner.
When Another Driver Is At Fault: Navigating Third-Party Claims
If another driver is at fault for the accident that damaged your car, you will typically file a claim with the at-fault driver’s liability insurance. However, even in these situations, disputes regarding repair costs can arise.
If the at-fault driver’s insurance company refuses to pay the full labor rate requested by your chosen repair shop, you may still be eligible for arbitration, similar to disputes with your own insurer. You also retain the right to file a lawsuit against the at-fault driver to recover the outstanding repair costs.
Keep in mind that arbitration programs usually require that a complaint has first been filed with the Insurance Department and attempts to resolve the issue through their intervention have been unsuccessful before arbitration is offered.
Understanding When Your Car is “Totaled”
A common term in car insurance claims is “totaled.” A car is declared “totaled,” or a “constructive total loss,” when the cost to repair the vehicle exceeds its actual cash value (ACV). Insurance companies determine the ACV based on factors like the vehicle’s age, mileage, condition, and market value.
For example, if your car is worth $5,000 before the accident, and the repair estimate comes to $6,000, the insurance company will likely declare the car totaled. In this scenario, they will typically pay you the ACV of $5,000 (minus your deductible, if applicable) and take ownership of the vehicle.
When a car is totaled, the insurance company’s responsibility is generally limited to compensating you for the vehicle’s pre-accident value, not the cost of repairs.
Determining Your Vehicle’s Value: Ensuring Fair Compensation
When your car is declared a total loss, it’s crucial to understand how the insurance company arrives at the vehicle’s value. You have the right to request a detailed breakdown of the valuation process from your insurer.
Insurance companies are often required to use specific valuation methods and sources to determine the ACV of a totaled vehicle. These sources typically include recognized industry guides like the NADA Used Car Guide and other approved valuation services.
If you disagree with the insurance company’s valuation, you have the right to dispute it and potentially pursue arbitration. Providing evidence of your vehicle’s condition, recent maintenance, and comparable sales in your area can help support your claim for a higher valuation.
Keeping Your Totaled Vehicle: The Salvage Option
Even if your car is declared a total loss, you may have the option to keep the vehicle instead of surrendering it to the insurance company. This is often referred to as “owner retained salvage.”
If you choose to keep a totaled vehicle, the insurance company will pay you the vehicle’s value minus its salvage value. The salvage value is the estimated amount the insurance company could recover by selling the damaged vehicle for parts or scrap. The insurer should inform you of where the vehicle would be taken to realize this salvage value.
It’s important to understand that if you keep a totaled vehicle, the title will be branded as “salvage.” This can affect the vehicle’s future resale value and may require a special inspection by your Department of Motor Vehicles (DMV) before it can be legally driven on public roads again. You will also be fully responsible for all repair costs if you choose to fix and keep a salvaged vehicle.
Totaled vs. Repairable: Understanding the Threshold
Sometimes, even if a repair shop provides a significantly lower repair estimate than the insurance company’s initial assessment, your vehicle can still be considered totaled. The determination of whether a vehicle is totaled is based on the insurance company’s repair estimate compared to the vehicle’s value.
If the insurance company’s repair estimate equals or exceeds the vehicle’s value, it will be considered totaled, regardless of whether you find a shop willing to do the repairs for less. The insurance company’s assessment and valuation are the determining factors in a total loss determination.
Loss of Use and Rental Car Coverage
If your car is undrivable due to accident damage, or if it needs to be in the shop for repairs, you may be entitled to compensation for the loss of use of your vehicle.
If the accident was the fault of another driver, their liability insurance is generally responsible for covering your “loss of use” expenses. This compensation can take the form of a comparable rental vehicle or reimbursement for reasonable transportation costs incurred while your car is being repaired. The duration of “loss of use” coverage should be reasonable and tied to the time needed to repair your vehicle or settle your claim.
If you have “rental reimbursement coverage” as part of your own car insurance policy, you may have rental car benefits regardless of fault. Check your policy details or contact your insurance agent to understand your rental car coverage options.
Storage Fees: Understanding Your Responsibilities
“Storage fees” can arise if your vehicle is stored at a repair shop or towing facility after an accident, especially if there are delays in starting repairs or moving the vehicle.
As the vehicle owner, you are generally initially responsible for storage charges. While your insurance company may cover reasonable storage fees as part of your claim, this coverage is usually limited to a specific timeframe. The insurer will typically notify you in writing of a date after which they will no longer cover storage, giving you time to move the vehicle or make arrangements. After this date, you may have to pay storage fees out-of-pocket.
Aftermarket Parts: OEM vs. Non-OEM
When your car is being repaired, insurance companies may include the use of aftermarket parts in their repair estimates. It’s important to understand what these are and your rights regarding part types.
- OEM (Original Equipment Manufacturer) parts: These are parts made by the original vehicle manufacturer.
- Aftermarket parts (Non-OEM): These are replacement parts manufactured by companies other than the original vehicle manufacturer. They are sometimes referred to as “generic” parts.
- Recycled or Used Parts: These parts can be either OEM or non-OEM and are sourced from salvaged vehicles.
Insurance companies are legally permitted to specify the use of aftermarket or recycled parts for repairs, particularly for cosmetic sheet metal or plastic exterior parts. However, they are required to clearly disclose the use of non-OEM parts in the repair estimate.
You typically have the option to request OEM parts, but you may have to pay the difference in cost between aftermarket parts and OEM parts out-of-pocket. It’s crucial to discuss parts options with your repair shop and insurance adjuster to make an informed decision.
By understanding these key aspects of car insurance and the repair process, you can navigate your auto body claim with greater confidence and ensure your vehicle is properly repaired after an accident. Remember to always communicate clearly with your insurance company and repair shop, and don’t hesitate to seek clarification or dispute resolution if needed.
