The property damage claim can be a frustrating part of a motor vehicle accident, however it does require your immediate attention and action. Remember, when possible, to take photographs of the property damage.

When another person causes an accident, generally that person’s insurance company will cover all the costs associated with your property damage claim. If you have the appropriate insurance coverage, sometimes you may be required to use it to cover the costs associated with your property damage claim. A property damage claim can be resolved in one of two ways: (1) the vehicle is repaired or (2) the vehicle is determined a total loss (the cost of repairs exceeds the actual value of the vehicle). In the case of a total loss, the Fair Market Value (FMV) of the vehicle is determined and offered in settlement of the property damage claim

Setup the Claim

You will need to setup the property damage claim with either the at-fault driver’s insurance carrier or your own insurance carrier. Sometimes you will need to involve your own insurance if you maintain collision and/or rental car coverage. If the at-fault driver’s insurance company has accepted liability, the property damage claim can be set up through the at-fault driver’s insurance company. If you carry collision coverage on your own policy and the at-fault driver’s insurance company is not cooperating, it is usually faster, easier and more convenient to have your own insurance company process your property damage claim. When accessing your collision coverage, in most cases you will be subject to paying your collision deductible. If the at-fault driver is uninsured, you will need to use your own collision coverage and you will be subject to paying your deductible.

Mitigation of Damages

Under Arizona law, a person has an affirmative duty to mitigate (to not needlessly incur monetary expenses) all damages. This duty to mitigate damages includes, but is not limited to, the timely removal of your vehicle from a pay/fee-charging storage/tow lot and the return of any rental vehicle in a timely manner. Any failure on your part to mitigate your damages may result in you having to pay for those expenses.

Towing/Storage Fees

• If your vehicle was towed from the scene of the accident, it was mostly likely towed to a private fee-charging storage lot. These private storage lots charge a daily storage fee that can add up very quickly and subject you to out-of-pocket expenses.
• The at-fault driver’s insurance company or your own insurance company (if you have collision coverage) will pay reasonable towing and storage fees. Keep all receipts and submit them to the appropriate insurance company for reimbursement.
• If the at-fault driver is uninsured or the at-fault driver’s insurance company is not accepting liability, and you do not have collision coverage, then you are responsible for paying the fees to remove your vehicle from the storage lot. This holds true even if you feel that you are not at fault for the accident, since you have a duty to mitigate (lessen) your damages under Arizona law. If your vehicle remains in a fee storage lot for an unreasonable time, it may be impossible to recover those storage fees from any insurance company.

Rental Vehicle

• While your vehicle is being repaired or the fair market value (FMV) for the total loss of the vehicle is being determined you can obtain a rental vehicle through the at-fault person’s carrier, if liability is not contested, or through your own carrier if you carry rental coverage on your own policy.
• The insurance company will not usually pay for any extra insurance associated with the rental vehicle. Your insurance should cover you while driving the rental vehicle. Be sure to call your insurance carrier to confirm your coverages. If you do not have collision coverage, you probably will be required to pay for additional insurance coverage [Collision Damage Waiver (CDW) or Liability Damage Waiver (LDW)] on the rental vehicle, usually between $8 – $12 per day. The insurance company is only required to put you back to where you were before the accident and if you did not have collision coverage before the accident, the insurance company is not required by law to provide it for you on the rental vehicle via the CDW or LDW.
• The method of payment for the rental vehicle will vary depending on the insurance company’s policy. Some will use the direct bill method, while other insurance companies will operate on a reimbursement policy. When the insurance company pays for the rental vehicle directly to the rental car company, this is the direct bill method. The reimbursement method means that you pay for the rental vehicle and then the insurance company reimburses you for the cost. The rental car company will usually require a credit card to insure payment for the rental vehicle. Insurance companies often receive discounts with car rental companies, so ask the adjuster handling your property damage claim where you should obtain the rental vehicle.
• The rental vehicle needs to be returned in accordance with the insurance company’s instructions. Failure to timely return the rental vehicle may result in non-reimbursable out-of-pocket rental expenses.
• If there is a delay in obtaining a rental vehicle or a rental vehicle is not used, you may be entitled to compensation for the “loss of use” of your vehicle for each day you have been deprived of its use.

Repairs

• The insurance company normally has the sole option to either repair or determine that a vehicle is a total loss. If the cost of repairs is less than the Fair Market Value (FMV) of the vehicle, the vehicle will be considered repairable.
• You have the right to decide who will repair your vehicle. Most insurance companies will evaluate the cost of repairing your vehicle separately and independently from any repair shop. Be sure to give the repair facility the estimate generated by the insurance company and that the repair facility agrees to repair your vehicle for the estimated amount. You may obtain more than just the insurance company’s estimate by taking your vehicle to several different repair shops for written estimates and present those written estimates to the insurance company. Should your vehicle require additional accident-related repairs, the repair facility will need to supplement the cost of the additional repairs to the insurance company for approval and authority. In most cases the repair facility will deal directly with the insurance company for supplemental repairs and it will not require your intervention.
• In most instances the insurance company will not, and is not legally required to, place brand-new parts on your vehicle. The body shop may use used parts of “like, kind and quality.” This is because your vehicle was probably not new at the time of the accident and, therefore, the body shop and/or mechanic may use refurbished or reconditioned parts. Most body shops are usually able to find used parts of like, kind and quality that are in the same condition as the parts on the vehicle prior to the accident. The insurance company cannot make you accept any used part that is substantially inferior to the pre-loss condition of the part being replaced.
• If the insurance company claims that some damage to your car pre-existed the accident or you claim that the accident generated mechanical malfunctions, you have the burden of proving that the damage was indeed caused by the accident. If this occurs, you must prove the connection between the auto accident and the damage. The professional mechanics and body repair persons can help you determine the cause of a mechanical failure or the age of body damage. It can be difficult to determine if a mechanical problem was caused by the accident-related damage or by normal everyday wear and tear and only professional mechanics or body repair persons will be able to determine such.
• Be sure to carefully inspect your vehicle upon the completion of the repairs to ensure your vehicle has been returned to its pre-collision condition before signing any insurance company check or property damage release, otherwise, you may waive your right to further accident-related repairs.

Total Loss

• If the cost of repair is greater than the fair market value of the vehicle, the insurance company will declare the vehicle a total loss and offer you the Fair Market Value (FMV) [also called the Actual Cash Value (ACV)] for the vehicle.
• In determining the FMV, most insurance companies use computerized searches, which take into account vehicles identical to yours that are advertised in local newspapers by private owners and evaluations done by local dealerships. Generally, the insurance company is trying to determine what your car was worth immediately before the accident. Once the insurance company makes a total loss offer, it is up to you to either accept the offer, or provide your own evidence as to why the vehicle is worth more. You are also entitled to recover prorated licensing fees on the balance remaining on the annual license and sales tax on the total loss value.
• When an older vehicle is involved in an accident, it is hard to recover the cost of recent repairs. Normally, new tires or a new engine only slightly increases the value of a vehicle. If you have receipts for any improvements be sure to give copies to the insurance company as this could result in a higher total loss offer. Scheduled maintenance and common repairs will not normally increase the value of your vehicle.
• The FMV does not increase if you are “upside down” on your vehicle loan. You are “upside down” on the loan for your car when you owe more money than its fair market value or what the vehicle is actually worth. The insurance company only needs to pay the FMV of your vehicle. If you owe more than the FMV, you will be responsible for the difference. If this is the case, you may want to ask your finance company if they might be willing to “roll over” the balance into a new loan for a new vehicle. An insurance company is not responsible for an outstanding loan or lease balance in excess of the fair market value. So, if you bought a vehicle and were making monthly payments, you may unfortunately owe more than what the vehicle is actually worth. You will not be entitled to recover compensation for the loan balance if the vehicle is worth less.
• When you are offered a “total loss” settlement, the insurance company buys your vehicle. If you wish to keep the wrecked vehicle, you may purchase it back from the insurance company for its salvage value. The adjuster can deduct the salvage value from the total loss settlement and you can keep the vehicle. In other words, they will pay you the FMV of the vehicle minus the salvage value.
• When the registered owner wishes to retain the vehicle, a Salvage Title (for an inoperable vehicle) or both a Salvage Title and a Restored Salvage Title (for an operable vehicle, or a vehicle which has been restored to an operable condition) must be obtained and sent to the adjuster before the insurance company will settle the total loss claim or the vehicle can be disposed of. These documents are obtained and issued by the Department of Motor Vehicles and help to ensure that any future buyers of the vehicle are made aware that the vehicle was once declared a total loss.
• To obtain a Salvage Title on a vehicle that is not operable or not going to be driven, the registered owner takes the following items to the Department of Motor Vehicles:
  1. A properly endorsed vehicle’ s title;
  2. A lien release from the lien holder listed on the title (if necessary);
  3. The vehicle’s registration documentation;
  4. Your photo identification;
  5. The vehicle’s license plates.
     The owner must supply a notarized statement stating that the plates were lost or stolen if the plates are missing; and
  6. The appropriate fee.
• If the vehicle can be driven or you wish to repair it to an operable condition, then a Restored Salvage Title must be obtained once the vehicle has been repaired. To obtain a Restored Salvage Title, you must also present the vehicle for a physical inspection to confirm its roadworthiness and the pay the appropriate fee.
• Once the vehicle is restored to an operable condition, the registered owner obtains a temporary operating permit. This allows you to operate the vehicle and bring it to the Department of Motor Vehicles. The vehicle will then be physically inspected to confirm it is roadworthy before the actual Restored Salvage Title is issued.

Obviously, not all property damage questions or problems could be addressed in this document and we advise that you consult an attorney for any questions or problems not directly covered in this document.