This post explains how property damage claims are handled in a Maryland car accident case.
We will explain what is covered, what is not, and how to protect yourself during this process
The at-fault driver (really their insurance company) has to pay for damages to your property, just like they have to pay for your personal injury damages.
A property damage claim is completely separate from your personal injury claim, and you can settle your property damage claim separately from your injury claim.
This is how it works in the vast majority of cases. After an accident, you usually get your car fixed by the other driver’s insurance company relatively soon. Then it may be months or years later (depending on your injuries) before you are able to settle your injury claim.
Should I do this myself?
You certainly can. Unlike personal injury claims, we do recommend people try to handle their own property damage claims.
But do the research called for in this post, and make sure you feel comfortable doing this.
If you need advice or guidance from an attorney, you can call us for a consultation first. We help answer property damage questions from clients all the time.
If you are my client for a personal injury case, I will advise you to try to deal with the insurer yourself (for property damage only) and seek my advice at every step of the process. I am a phone call or email away.
But you do not necessarily want to insert me as a “middle man” to slow up the process if your property damage claim is straightforward and easy to resolve.
Of course, if there are problems, I am happy to step in.
You can deal with the adjuster handling the property aspects of your claim. It is easy in 95% of the cases. After reading this post, you will be armed with enough information to do successfully deal with this situation. Just be sure you do not talk about your injuries. Refer them to your lawyer for that.
Rules for Dealing with Insurance Adjusters
Remember to follow these rules when dealing with an insurance adjuster for your property damage claim:
- Be polite and professional. That adjuster on the other end of the phone line is a human being, and will respond a lot better if you are nice than if you are pushy. Remember, they hold most of the cards in this relationship. It is easy for them to say “no” and force you to sue them.
- Do NOT give a recorded statement. There is a lot more about why here in our post on what not to do after a car accident. There is no law that your statement must be recorded. If you say the wrong thing on a recording, the insurer will absolutely use it against you. If they need a recorded statement to use in their investigation, call a lawyer first for advice. If there is any question as to liability, I would advise you NOT to give one.
- You do not have to accept the first offer. You can think about it, and call them back after you have done your research and make sure you agree with their offer and their assessment of your situation.
- Do your research and be armed with information before you start negotiating. This post will tell you how to get the information you need to successfully negotiate with an insurance adjuster.
What am I entitled to under the law?
If your car is fixable, you are entitled to get your car restored to the condition it was in before the collision. You are entitled to use new parts and your own mechanic, if that is what you desire.
If your car is a total loss (more on that later), you are entitled to be paid for the fair market value of your car.
Of course, the devil is in the details. Read on for those details.
What happens if my car is repair-able?
If your car is damaged but not a total loss, then you will get it repaired. The insurance company has to pay for the repairs. They have to pay for a fully restored vehicle.
You can demand new parts and can choose your own mechanic. The law very clearly says that you get to choose your body shop or mechanic.
For years the insurance companies forced people to use their own mechanics. Finally someone filed suit to resolve that issue and the Courts said you get to choose. So if you have a guy who you trust to fix your car, you can use that person.
However, there are some practical issues to consider if you do this.
If you don’t use their approved mechanic, you are buying a potential fight with the insurer. You will win it, but they can cause delays and problems if you do not use one of their “approved” mechanics. They may be slow in paying, or refuse to pay altogether, and you may even have to sue them.
If you want to pick your own mechanic, make sure the mechanic will do the fighting for you. Make them responsible for fixing the car and getting paid by the insurance company so that you do not have to pay out of your pocket, and so you do not have to fight the insurer for them.
Any good mechanic shop should do that in exchange for your business.
Once the car is fixed, be ready to get it fast. The mechanic can and will charge you for storage fees. This sounds grossly unfair, and sometimes it is, so do not get caught in it. Just pick up your car immediately when it is ready.
What if my car is a total loss?
If your car is a total loss, then you will just get a check for its fair market value. You will have to buy a new car. But you won’t necessarily get enough money to buy a new car.
Wait. What? Here is the deal:
Unfortunately, the law does not force the insurance company to give you enough to pay off your car, or even to buy a replacement car. They have to pay you the fair market value of the car in the condition it was in at the time of the accident.
This is often known as “fair market value” or “blue book value.”
However, that value has nothing to do with your loan balance, or the value of your car to you personally.
You may have an old clunker that runs, and is therefore very valuable to you. But on the open market, it is only worth a few thousand dollars. You cannot buy a new car for that amount, but that “fair market value” is what you are entitled to under Maryland law.
And if you owe on your car loan, the insurance company will pay off that lien first. You will only get the remaining amount between the value of the car and the amount owed on it.
If the value is less than the amount owed, you have problems. You still have to pay the full amount you owe to the car loan company.
Yes, I agree.
This is not fair. But it is the law in Maryland. This is just one of the painful realities you have to deal with if you get in a car accident in Maryland.
What should I do now?
As you can see, there are pitfalls for those who are not properly armed with information.
You have to do your homework, and be willing to negotiate, if you want a good resolution of your property damage case after a car accident.
Here is what to do:
First, you should find out exactly how much you owe on your car loan.
Pull out your statements from the loan company, and call them if you need to. Find out what the payoff would be on your car loan. You do NOT have to tell them why at this time. Just say you want information and may pay off the loan soon.
Second, find out what your car is worth on the open market.
You should go to a couple of reputable blue book sites on the internet. Kelly Blue Book is probably the best known. NADA guides is another good one to use. Be armed with some knowledge of how much your car is worth before the insurance company starts waving checks at you.
Third, don’t just take the first offer if you are not happy with it.
You can negotiate this settlement like any other. You should be ready to argue why your car is in “good” condition instead of “fair” condition, for example. That subjective decision may substantially change the value of your payoff.
What if I am still not happy after trying to negotiate?
You do have options if you are still not satisfied with the proposed resolution of your property damage claim.
These options are not easy, and will take time and effort on your part. But you are not simply left at the mercy of the insurance company if they are not being reasonable.
Option 1 – Sue Them
You have the right to sue over this issue if you need to. However, most people cannot wait the 3-6 months it takes to get a court date and have this issue resolved. Very few of these disputes go to court for that reason.
However, you can do it. If you do, read our guide on litigating small claim actions. That should work if the value of the case is less than $5,000.
If the value is more, you can still go to court using Section 10-105 of the Maryland Courts & Judicial Proceedings Code. You will have to get evidence about the value of the car, and you may need to pay an expert witness (car salesman) to testify for you.
If you are contemplating this route, make sure you get a consultation with an attorney before you file suit.
Option 2 – Buy Back the Car
You can buy back your car and get it fixed by your own mechanic if the blue book value is not worth it to you.
The insurance company has to pay you the fair market value, but they will also make money on the car through salvage.
You can buy back the car for the salvage value and they will give you the car. So you get the fair market value less the salvage value. Then you can decide if you want to put money into it to keep it running.
This is not commonly done, but it is an option.
It is possible if you have an old clunker that runs, and the insurer wants to total it because of body damage. If you don’t care about the body damage, and the car is drivable, you can buy it back and keep it.
This may also work if your Uncle is a car mechanic and gives you the “back yard mechanic” deal on getting your car running again.
Just keep in mind this is an option you have available.
At the end of the day, you always have the right to consult an attorney about this situation, and you have the right to sue the insurer if you are not happy. Feel free to contact us if you think you need some help with your property damage claim.
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