Car Damage After an Accident: Overview
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Who Pays for Vehicle Damage?
The answer depends on who caused the accident.
If you caused the accident, your insurance company pays to repair the damage to your car -- or, if you don't have the right insurance coverage (collision coverage), you'll have to pay out of your own pocket.
If the other driver caused the accident, the other driver's insurance company pays. If the other driver doesn't have the right insurance (property damage liability coverage), he pays himself. Alternatively, you can have your car repaired by your insurance company under your collision coverage, if you have it. (Learn more about Using Collision Coverage for Vehicle Damage.)
In some cases, you will have a choice. If an insured driver caused your accident, you can choose to have your car damage repaired by your insurance company (under your collision coverage) or by the other driver's insurance company (under the other driver's property damage liability coverage). Still not clear? Learn more about Who Pays or Your Car Damage.
How Much Do They Have to Pay?
Guess what? It depends. More specifically, it depends on the amount of damage to your car.
Generally, you are entitled to have your car repaired and put back into its pre-accident condition. That is, unless the repairs would cost more than your car is worth. If that's the case, your car is considered "totaled" and you are only entitled to recover your car's Actual Cash Value (ACV) before it was destroyed. Let's go over this with numbers. Say it will cost $10,000 to repair your car. If the car is worth $20,000, you are entitled to have it repaired. But, if your car is worth $8,000, you are not entitled to have your car repaired. Instead, you are only entitled to the $8,000 that it was worth.
You may also be entitled to a rental car -- either until your car is repaired or, if your car is totaled, until the ACV is determined. If the at-fault driver's insurance company is repairing your car, they must provide a rental car. If your insurance company is repairing your car, it only has to give you a rental car if you have rental car reimbursement insurance. Got it? If not, learn more about How Much You Are Entitled to be Paid for Damage to Your Car.
If you are dealing with the other driver's insurance company, you may be asked to sign a release after your car damage is repaired or after you are paid the value of your totaled car. Once you are sure that you have gotten all that you are entitled to, it's ok to sign a release of your "property damage" claims, but you should not release "all" your claims, especially if you intend to make a claim for your "personal injuries," or, as some insurance companies call them, your "bodily injuries."
Instead of a release, you may be given an insurance company check that says that it is for "full and final settlement of property damage," or some similar language. If the check covers everything that you are entitled to receive, you can accept the check as your settlement compensation. But, if you have additional property damage claims, don't accept the check. If you accept it, you might be waiving your additional claims. Instead of accepting the check with this language on it, contact the insurance company and get either the additional amount you are owed or the insurance company's written agreement that you can still make an additional claim. (Get more Tips on Final Settlement of Vehicle Damage Claims.)