Your Rights and Insurance
How Many Estimates Must I Get ?
The short answer is one. As you are the owner of the damaged vehicle, you have the right to select what shop will be making the repairs. In point of fact, you will probably not even have to get any repair estimates as most insurance companies have their own appraisers to evaluate the damage to your vehicle. What you need to do is make sure you have chosen a quality repair facility to do the work on your vehicle and then just let that shop deal with the insurance company.
Must I Accept Used Parts ?
In short, yes. However, do not stop here. Read on to understand the "why," "when" and "what" that put limitations on used parts. Virtually every auto insurance policy I've ever read had an "LKQ" clause. L.K.Q. stands for Like Kind & Quality. While this means that insurance companies can pay for used parts in repairing your vehicle , this does NOT mean JUNK parts. If your four year old vehicle needs to have a door replaced that was in good condition prior to the accident, it would only be reasonable to replace the damaged door with an identical door in good condition. The operative word in the LKQ clause (for this discussion) is "quality". If your damaged door had soft, pliable and intact weather-strips, so should also the "used" door. If your damaged door had never been repaired before, you should not have to accept a used door that requires any repair to be usable. If an insurance company makes an allowance to replace your front end sheet metal with an "LKQ" assembly, an allowance should also be made for servicing the radiator, a/c condenser and replace the dryer and/or expansion valve so as to restore the functional reliability of these components. Used parts have a legitimate place in the repair of your damaged vehicle.
JUNK parts have NO place in the repair of your damaged vehicle.
Junk parts have always been plentiful. However, the availability of good quality used parts has been unpredictable. This sporadic availability of acceptable used parts gave birth to a whole new option for insurance companies to save money versus having to pay for OEM (Original Equipment Manufacturer) replacement body parts. Now comes the "economy parts" industry. Economy parts are replacement body parts that are manufactured by someone other than the manufacturer of your vehicle. They are generally referred to as "imitation" body parts. They are of inferior quality and pose a potential hazard for future occupants of your repaired vehicle. These parts may be of like "kind" but are clearly not of like "quality" and you are not obliged to accept these parts (unless your policy gives decision making authority to the insurance company).
WARNING: some insurance companies have now begun to rewrite their policies so as to give the insurance company the right to select the repair shop and dictate what parts will be used in the repair of their insured's vehicles. This is not usually disclosed when you purchase or renew your auto insurance. Be aware of this potential problem and review it with your agent. Read your policy. Don't find out too late that you have waived your rights and surrendered control to your insurance company.
Who Will Pay For My Damage ?
A simple question that can have a simple answer. If you have Collision Coverage or Comprehensive Coverage on your own Auto Policy (depending on the cause of damage), your insurance company will pay for the damage to your vehicle regardless of who may have been at fault in the accident or incident (assuming you have not intentionally caused the damage yourself). Collision and Comprehensive Coverage covers damages sustained by your vehicle. This is the coverage that would be required by your lender if you have a lien on your vehicle. If you have a lien on your vehicle but do not have Collision and Comprehensive Coverage on your own policy, the lender will probably have purchased VSI (Vendor's Single Interest) coverage. In effect, this is Collision and Comprehensive Coverage that protects the interests of the lender only . . . not the owner/borrower. The most that would be paid out on VSI coverage is the lesser of either the cost of repair, the ACV (Actual Cash Value) or the remaining balance owed on the loan. Any equity you may have in you vehicle is not insured by VSI coverage. In order to protect your equity interest in your vehicle, you should have Collision and Comprehensive Coverage on your own auto insurance policy.
If you do not have Collision and/or Comprehensive Coverage on your own policy and the damage is the result of negligence of another, your only remaining option is to collect from the negligent party who caused the damage. Hopefully, that party will have Liability Insurance that will pay you on behalf of their insured. If another party is responsible for your damage but does not have insurance, your only remaining option is to pursue your claim against the negligent party personally.
If the responsible party does not voluntarily pay for your damages, you may have to pursue legal action against them. If your total damage is $5,000.00 or less (contact Justice Court or Small Claims Court in your area to verify their authority limit), you can utilize the services of Justice Court. A Justice Court action can be rather quick (less than 3 months), is relatively simple and can be pursued at a minimum of cost. If your damage is over the limit of Justice Court, you will have to bring your action in Superior Court which will be much slower and probably much more expensive (legal representation is recommended).
The moral here is simple: if you can not afford to do without it . . . insure it!
If you are fortunate enough to have the option of collecting for your vehicle damage from either your own insurance company or the other party's insurance company, we recommend you utilize your own coverage. We make this recommendation for three reasons . . .
1. In most states, your insurance company can not increase your future auto insurance policy premiums for claims submitted which did not involve negligence on your part.
2. Your own auto insurance policy affords you Rights that you do Not have in your dealings with they other party's insurance company. Chief among those rights is your access to a quick and cost effective process for resolving disputes.
3. In the event your vehicle is a legitimate candidate for a Post-Repair Diminished Resale Claim, you do not want to exhaust the coverage limits of the other party's insurance just for repairing your vehicle. Post-Repair Diminished Resale Claims are discussed further in. If the repair of your vehicle even begins to approach $10,000.00, use your own Collision Coverage.
Using your own Collision Coverage may mean an investment on your part in an amount equal to your policy deductible. However, the other party's insurance company will probably be happy to pay you your deductible . . . up front! That would minimize the need for capital commitment on your part while still leaving your options open. Now that we have dealt with the "who" . . . let us now address the question of "How much".
How Much Will Be Paid ?
Generally speaking, the maximum that will be paid for damage to your vehicle will be the amount necessary to replace your vehicle with a comparable used vehicle (plus sales tax, title and registration fees). This is referred to as the vehicle's ACV (Actual Cash Value). An exception to this rule would be if you had purchased an RCV (Replacement Cost Value) endorsement as part of the Collision and Comprehensive Coverage on your own insurance policy. That would raise the maximum collectable to an amount necessary to replace your vehicle with a comparable new vehicle. These amounts would be collectable if your vehicle claim were to be resolved on a Total Loss basis.
If the damage is not severe enough to Total your vehicle, you are owed whatever amount is necessary to return your vehicle to its pre-loss condition (and in some cases, pre-loss value). To learn more about being paid for Diminished Value of your damaged / repaired vehicle, go to our Auto Diminished Value FAQs section.
If your vehicle is reparable, you need to be aware of Two Factors that Could prevent you from receiving the best in quality repairs.
1 - DRP Contracts. DRP is the generic term referencing a Direct Referral Program. This is where insurance companies and repair facilities have entered into a business relationship whereby the insurance company receives concessions from the repair facility in exchange for an insurance company referring work to that facility.
In some cases, those concessions are merely administrative in nature. The repairing facility is left to determine how the vehicle will be repaired. However, in other more restrictive relationships, the repairing shop will have forfeited full control of the repair process to the insurance company. Insurance company Bean Counters will determine whether a damaged component will be repaired, replaced or even addressed at all.
It is this 2nd scenario that poses a great potential for post-repair defects. We have even seen some DRP contracts that do not permit the repairing shop to tell the vehicle owner about improperly repaired (or un-repaired) damage. Note: To say that all DRP Shops will turn out Poor Repairs makes no more sense than to say all non-DRP Shops will turn out Quality Repairs. The quality of repairs you receive has more to do with a shop's dedication to customer service than whether or not they may have entered into any DRP contracts.
2 - AfterMarket Crash Parts are imitation sheet metal, plastic or lamp components made as Knock-offs to original factory components. Such parts are inferior at every level, are Cheap in every sense of the word and, in some cases, present a severe safety hazard.
I-Can Does Not Endorse the use of AfterMarket Crash Parts. I-Can has a very low opinion of Insurance Companies that mandate the use of these inferior parts. Such insurance companies are those requiring the more restrictive DRP relationships as referenced above.
Note: Any I-Can Local Body Shop found to have installed an AfterMarket Crash Part, without prior approval of the vehicle owner, would be subject to immediate suspension.