Who Pays For Car Damage

Who pays for car damage depends on who caused the accident and, as a practical matter, on the insurance coverages that each driver has . . . or doesn't have! Let me explain.

Another Driver Caused the Accident

If another driver caused your accident, that driver is responsible for paying to have your car repaired. In most cases, of course, the other driver has insurance that will pay. If she doesn't have insurance, you can have your insurance company pay to repair your car damage . . . if you have collision coverage on your damaged car. If you don't have collision coverage, you can go after the other driver to try to make her pay, but it might be difficult to force her to pay. Usually, drivers who don't have car insurance, even though the law requires it, don't have piles of cash laying around that can be used to pay to repair your car.

Here are the details.

Liability insurance covers damages that a driver is legally liable for. In car accident insurance lingo, property damage mainly means damage to your car. Therefore, your claim to have your car damage repaired will be against the other driver's "property damage liability insurance."

Almost every state has a law requiring drivers to have liability insurance, including property damage liability insurance. (And the two that don't require insurance require a driver to prove that she can pay for any damage she causes.) Ten thousand dollars is a popular minimum coverage requirement for property damage liability insurance, but your state may have a different minimum requirement. And, of course, the at-fault driver will probably have more insurance coverage than the bare minimum. Check here to learn what car insurance is required in your state, including property damage liability coverage

Therefore, because it is required, the odds are that the driver who caused your accident has property damage liability insurance.

If the other driver's insurance company agrees that its driver caused the accident . . . and is therefore liable for paying damages . . . they will pay for your car repairs repairs.

Go here to learn what payments they are required to make.

But, what if the driver who caused your accident doesn't have liability insurance? You'd be amazed how many uninsured motorists are on the road. And the number of uninsured motorists is increasing in today's bad economy as more and more opt to save money by not getting the required insurance.

Or what if the at-fault driver has insurance but her insurance company will not admit that she caused the accident.

If the driver who caused the accident has no insurance, or if her insurance company denies that the other driver is liable, the best place to turn is to your own insurance company -- provided that you have collision coverage on your damaged car.

If you have collision coverage, your insurance company will pay to repair your car, regardless of who caused the accident. In other words, collision coverage is a no-fault coverage.

However, there is a certain portion of the cost . . . called the deductible . . . that your company won't pay. You have to pay that.

Let's say you have collision coverage up to $50,000 with a $500 deductible. (The higher the deductible, the lower the cost of the insurance.) If it will cost $12,000 to repair your car, your insurance company will pay $11,500 and you will pay the deductible amount of $500.

Can you get your deductible back?

If the driver who caused your accident has no insurance and is financially unable to pay, it may be difficult. You can try to recover by suing that person. However, remember that getting a judgment against someone in court is not the same as collecting the judgment. To collect, the other driver must have something . . . a bank account . . . a car or some other property with equity in it . . . a job . . . that you can "execute on" to collect your judgment.

If you have your car repaired by your insurance company under your collision coverage, and the driver who caused your accident has insurance, you should be able to get your deductible back from that driver's insurance company. Usually, your insurance company will get it for you. They will follow insurance company procedures to get your deductible . . . and the amount they paid to repair your car . . . from the company that insures the driver who caused the accident. This usually takes 1 - 2 months.

Finally, in case you are wondering, making a collision coverage claim under your policy should not increase your premiums when the accident was not your fault.

This is the tough one.

The at-fault driver is clearly responsible for paying for your car repairs. But, as a practical matter, you can't collect from someone who has nothing. In this situation, you may end up paying.

But, before giving up, I recommend that you file a lawsuit against the at-fault driver. Perhaps, pressured by your lawsuit, the at-fault driver with nothing might find a friend or relative who will lend them the money to pay for your repairs. Or maybe a tax refund will come in. Or perhaps something else will happen (hopefully, nothing unlawful) that will produce the money to repair your car.

In many states, if a person has a judgment against them arising out of a car accident, their license will be suspended when you notify your Motor Vehicle Administration (or Division of Motor Vehicles, or whatever it's called in your state) of the judgment. Now that's some serious pressure on the at-fault driver to come up with the repair money.

If the driver who caused your accident has liability coverage, and you have collision coverage, you have a choice. You can have either insurance company pay to repair your car damage.

Which is better? Generally, I recommend having the other company repair your car, but these are the considerations . . .

The argument in favor of having the other driver's insurance company repair your car damage is that you won't have to pay a deductible. In addition, the other company must pay for a rental car while your car is being repaired, but your insurance company only has to pay for a rental car if you have rental reimbursement insurance.

The main argument for having your insurance company pay to repair your car damage is that you have certain rights under your insurance policy . . . such as a quick and cost-effective process for resolving disputes . . . that you don't have when you deal with the other driver's insurance company.

A final consideration is the amount of coverage. If the other driver doesn't have enough coverage to pay to repair your car, and you do, of course you should have your insurance company pay.

You Caused the Accident

Even if you caused the accident, your insurance company will pay to repair your car . . . if you have collision coverage. Remember that collision coverage is no fault. But you will be out the deductible.

If you caused the accident and don't have collision coverage on your car . . . sorry, you pay.

Having learned who pays for your car damage, click here to learn what they must pay.

Click here to return from who pays for car damage to a general overview of car damage.