A car owner that has purchased an automobile insurance policy expects coverage of any repairs that might get caused by a vehicle accident. How does the insurance industry satisfy that expectation?
What happens in a state with the traditional at-fault system?
In a state with such a system, the owner of the damaged vehicle must prove that the other driver was negligent. Once that proof has been presented, the other driver’s insurance company must cover the costs of the repairs, as per a personal injury lawyer in Moreno Valley.
Suppose that the owner of the car caused the accident, or that the other driver did not carry insurance. What would happen in either of those situations? If the owner of the damaged vehicle had purchased collision coverage, then that car owner’s insurance company should pay the cost of the repairs.
What happens if the car got damaged in a no-fault state?
In that instance, the car owner may be able to have his or her own insurance company paying for any necessary repairs. Some states allow that procedure; others operate in the same way as an at-fault state.
The limits on what any insurance company will pay
No company will pay more than the amount stated in the policyholder’s policy. If the cost of the repairs exceeds the limit, some policyholders may be able to make use of their underinsured motorist coverage. Otherwise, the car owner must foot the part of the bill that is not covered by the insurance company.
What happens if the cost of repairs exceeds the value of the damaged vehicle?
In that instance, the insurance company does not cover the repair costs. Instead, it gives to the vehicle’s owner a sum of money that equals the vehicle’s Blue Book value. The Blue Book value is supposed to represent any listed vehicle’s actual cash value.
That system works well, if the owner of the damaged set-of-wheels is not making payments on that same vehicle. If that is the case, then the company receiving those same payments expects them to continue, even though the car has been totaled. Failure to pay in full on an automobile can diminish chances for making similar arrangements, when buying another means of transportation.
Problems could also arise if the owner of the damaged car spent money on some expensive decorative items, or on some audio equipment. In that case, the owner would need to prove the presence on the damaged automobile of the expensive accessories.
Only by showing the existence of those accessories could the automobile’s owner hope to obtain an amount that was greater than the perceived cash value for the damaged set-of-wheels. That is why it pays to take pictures of any vehicle to which accessories have been added.