Property damage clause on car insurance?

Question

I recently got rear-ended and it later turned out that my car suffered a total loss. As a result, the other party's insurance had to settle with us but they said that there's a maximum amount of money they can give out because of the other party's coverage says that their property damage can only give out $5000 max.

Now the estimate that came out for repairing the entire car is a little over 8 k, so i'm basically losing 3k!

Furthermore, apparently I now have to report my car to the DMV and get a salvage certificate and do all this junk to re-register the car and get a new title.

Can anyone help me understand this property damage clause on the car insurance because I'm not too keen on it, and how is that when I had no fault in the car accident, but am still losing money. And can anyone clear up the stuff I have to do regarding salvaging the car with the DMV? I dont understand that procedure either.

Thanks.

I'm from the state of California.

Answer 1

Be careful with some of these answers, because some of the coverages they're telling you to use you might not have. As you've been told, the state of California only requires a minimum of $5k in coverage for PD liability, ie, 'damage you do to other people's cars or property.' You may also have $5k on your own policy, you may have more, but the limit means just that - the limit. The insurance company can only pay out up to the limit on any policy.

If you purchased collision coverage with your own company, use it. It's your #1 best option. You'll only be out your deductible instead of $3k+. Your company will collect back the limits plus possibly pursue the other driver for the balance if it looks feasible. You will also get a pro-rata share of your deductible back.

If you do not have collision, you will have to settle with this person's company. They're not jerking you around -- all they can pay is the $5k limit. However, if they have deemed your car a total loss it's much simpler to take the check and let them retain the salvage instead of trying to get a salvage cert and repair it yourself. If you run into problems with the repair or the DMV or the title later on down the road, it's all on you. You're much better off taking your settlement and putting it into another car.

I don't believe that CA even offers Underinsured PD coverage, only Uninsured PD coverage, which is severely capped if you didn't have collision in the first place. (Verify this with your agent! I can't swear to that as I'm not from CA.) And the other person wasn't uninsured in this instance, they just had the state minimums. Best to check with your agent on this and ask what you have on your own policy before you decide where to go from here.

Be aware that the company you're dealing with will want a signed release -- absolving them and their insured -- before they cut you that $5000 limits check. So while you can decide to go after the other person for the balance, you'll have to do that on your own and without even the first $5k to help you along.

Don't bother with a lawyer. They have nothing to gain with a car damage dispute and you'll pay more in lawyer fees than you'll ever get back. Talk to your own insurance agent and if he/she isn't sure, call your local claims office and ask to speak to someone who can help you sort this out.

If you're unhappy with your state allowing such low liability limits, CALL YOUR CONGRESSMAN. Until people start complaining, nothing is going to change.

Good luck!

Answer 2

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Answer 3

Yes, there is a property clause on insurance. But there is also a state required minimum. The first thing you need to do is to find out the true value of your car. Take a look at KBB.COM and see how much your car is worth. Just because they say that it will take 8K to make it right doesn't mean your car is worth 8K. I've have a 93 Taurus that my kids drive and it needs 4K worth of work but its not worth 4k even it it was fixed to look like new.

Now then the second thing you need to do is to find out what the your state's minimum property damage limit is. If it is hire then the 5k they are quoting you then its time to confront the other person's insurance company with your new found knowledge. Let them know that you are very willing to take it to the next level as they failed to meet state requirements. You can also go to your insurance and see if you can file an under insured motorist claim. My under insured covers both medical and property so it might also work for you.

You car was totaled which means that if you keep it you do have to file a salvage title to show that it was "rebuilt" (in other words a major accident that resulted in a nearly complete loss). This is to protect future buyers from dishonest shops and car lots. Before you car can be relicensed for the street it will have to be inspected by the DOT to insure that it is road worthy.

Answer 4

Check with your insurance agent and see if you had coverage called Uninsured/Underinsured Motorist.

What underinsured coverage does is pays the $3000 you're losing because the other guy's policy had a liability limit of $5000.

If you had the coverage, collect that money from your insurance company.

The business about getting a salvage title means that IF you want to repair your car and keep it (and after a total loss, I wouldn't, but hey...) then you have to get it repaired, and THEN get the title reissued with the word SALVAGE stamped on it. That way, you have to tell the next buyer it was a total loss if you ever decide to sell it.

Talk to your insurance agent. He can give you the best guidance here.

Answer 5

Hang on to your hat: it appears the bozo that hit your car only had the bare, bare minimum coverage required by your state (in this case, $5,000), meaning, once the 5K is depleted his insurance company has met their obligation and that portion of the claim is 'closed'. Now, if you have unisured/underinsured motorist coverage on your car your company should be able to pay you the 'excess' amount of the market value of your vehicle under your own policy. Every state has it's own set of rules so call your company and check into this before you go shopping for that new Porsche you've had your eye on. This is a huge problem in a lot of states; people buy the absolute minimum coverages under liability and never consider that most cars on the road cost over $20,000, not to mention a emergency room visit, exams and overnight stay will cost $10,000 a pop. Always protect yourself out there with enough coverage to pay for your property and that Rolls Royce you accidently bump into. I would advise against a salvage title for your car. It's almost always more trouble than it's worth and unless you plan on driving the car for the next fifteen years it usually doesn't pay in the long run. Note: in my state, you must have a licensed rebuilder repair the vehicle before you can tag it. If you don't have UM coverage your only recourse is to sue the other party. You can't sue his insurer as they have paid all they can under the terms of his policy. If he is a deadbeat you will get nothing.
Good luck.
PS - a lot of tools will scream for a lawyer but only go there as a last, last resort. They are scum and will only take 33% of any money you recieve.

Answer 6

If the other party is at fault, they owe you the lesser of the cost of repairs, or the worth of your vehicle. If they have totaled it, the cost of repairs has no bearing on your claim, they only owe you market value for the vehicle. If he has a low minimum on his coverage, and they only pay part of the balance owed, he still owes you the remainder. The only time you would have to do a salvage title is if you have your vehicle totaled, and then buy it back from the insurance rather than let them take it.

If his coverage doesn't cover, that is when your under insured coverage kicks in. Surely you have uninsured, under insured coverage on your policy don't you? It's very cheap to get the coverage, and no one should drive without it. If you don't, unless the person at fault is able to pay you the difference, then yes, you will take a loss.

Actually your best source of information about the process you are going through will be your insurance agent. Have you talked to him?

Answer 7

Check with your insurance company and see if you have uninsured and underinsured protection on your policy. If you do, it will cover the difference of what the other insurance co. is paying (blue book value is what you get total, between the 2). If you do not have uninsured and underinsured protection on your policy you are s hit outta luck ... or you can sue him for the difference. But don't get a lawyer, it would cost you more than the $3,000. Just file in small claims court.
Good luck!

Answer 8

The insurance company pays you the $5000 then you sue the other guy for the rest

Answer 9

Even if his or her insurance company will only pay a max of $5,000 you still are entitled to the rest of the amount. Have you contacted this individual ? He may be willing to settle the rest of the amount outside of court.

Answer 10

If that is all the insurance he paid for then that is all they will pay.

You have the option of asking your insurance company to pay and also you can sue the person that hit you for the remainder plus costs.