Auto Accident

Property Damage Claims


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California Auto Accident Property Damage Claims

by

Matthew L. Taylor, California Attorney

 

This article contains a general description of property damage claims caused by auto accidents in California. The scope of the article involves both claims against the "at fault" driver (and his insurance company) and claims against a person’s own insurance company. Each type of claim is discussed in a separate section below.

Property Damage Claims

 Against the "At-Fault" Driver

("Third Party Property Damage Claims")

Claims against other drivers involved in the accident are handled through a "fault-based" system. These claims are often referred to as "third party claims" to distinguish them from "first party claims" made against a person’s own insurance company (discussed below). In such a system, the party "at fault" for the accident is legally liable for the harm caused by the accident. Put simply, the person "at fault" is required to pay for the harm to the people who are not "at fault" in the accident. In order to secure payment for accidents, California requires that all persons operating a motor vehicle must be covered by a policy of automobile insurance that complies with at least the state-mandated minimum policy limits.

The term "property damage" describes those claims connected with physical damage to the vehicles as well as other categories of harm connected to the vehicles. This can involve the following types of recovery:

  • Payment for the Total Loss of the vehicle. If the vehicle is damaged beyond repair, or if the repair would cost more than the vehicle is worth, then the "at fault" party is required to pay for the replacement value of a comparable vehicle, in the same general age and condition as the damaged vehicle.
  • Payment for Repair of the Vehicle. If the vehicle can be repaired for less than the cost of replacement, then the "at fault" party is required to pay for the cost to repair the vehicle.
  • Rental Car Costs. California law allows a claim for reimbursement of rental car costs while the vehicle is being fixed or until payment for the total loss of the vehicle. The rental vehicle needs to be comparable to the vehicle involved in the accident. So, if you are driving an old economy car in the accident, you would not generally be able to recover rental costs of a new luxury car.
  • Loss of Use of the Vehicle. Even if there are no rental car costs for a replacement vehicle, California law allows for payment relating to the loss of use of the vehicle while it is being fixed or until payment for the total loss of the vehicle. The value of the loss of use claim is usually calculated based on the expected cost to rent a replacement vehicle of similar age and condition.
  • Towing and Storage Costs.

Although third party claims are legally against the "at fault" driver (or the owner of the "at fault" car), the claims are generally adjusted and paid by the adverse driver’s insurance company. These claims are not subject to any type of deductible when made against the adverse party’s insurance company. Insurance policies contain separate policy limits that govern the maximum amount that will be paid to resolve third-party property damage claims. Under California law, these maximum policy limits can be quite low - as low as $5,000. This amount is quite a bit lower than the average cost of a new car, so policy limits are often an issue in this type of claim.

Third party property damage claims are subject to a three-year statute of limitations. That means the claim must be either settled or a lawsuit must be filed within three years of the date of the accident. Failure to file a lawsuit within that time period results in the total loss of the claim - regardless of the merit of the claim.

 

Property Damage Claims Against

The Driver’s Own Insurance Company

("First Party Property Damage Claims")

In addition to the third-party claims discussed above, property damage claims are often made against a driver’s own insurance policy. Claims against a driver’s own insurance company are called "first party" claims. First-party claims are markedly different from third-party claims in many respects. The most significant difference is that first-party claims do not depend on fault. The claim is made against the person’s own insurance company regardless of who caused the accident. Even the "at fault" driver can make a property damage claim against his own insurance company.

First party property damage claims are only available if the vehicle is covered by a policy of insurance providing "collision coverage". This is an optional coverage, and many people decline this coverage to save money on insurance premiums. A vehicle that is not covered by a policy of collision coverage is not eligible to make a "first party" property damage claim.

First-party collision insurance coverage generally provides coverage for the following types of claims:

  • Payment for the Total Loss of the vehicle. If the vehicle is damaged beyond repair, or if the repair would cost more than the vehicle is worth, then the first-party insurance carrier is required to pay for the replacement value of a comparable vehicle, in the same general age and condition as the damaged vehicle.
  • Payment for Repair of the Vehicle. If the vehicle can be repaired for less than the cost of replacement, then the first-party insurance carrier is required to pay for the cost to repair the vehicle.

First-party claims are usually subject to a deductible charge. The amount of the deductible varies from policy to policy and is set forth in the declarations page of the policy. First party coverage only pays for the portion of the claim in excess of the deductible amount. For example, if a policy has a $500 deductible, the first-party insurance company will only pay for the portion of the repair or replacement cost that is over $500.

First-party claims are usually not subject to maximum policy limits. They will cover the repair or total loss of the vehicle without regard to any policy limits. This feature can become quite important if the accident involves multiple vehicles or the "at fault" driver did not have enough property damage coverage to pay the full amount of the property damage.

First-party property damage claims do not cover loss of use of the vehicle, but it is possible to purchase coverage for rental car costs and towing costs at an additional charge.

 

General information about what to do if you have been involved in an accident is available from the State Bar of California's publication "What Sould I Do If I Have An Accident?"  Click on the following link to view a copy of this publication.  Clicking on the link will take you away from California Legal Pages.

State Bar Pamphlet

  

About the Author:  Matthew L. Taylor is an attorney in Claremont, California.  His practice areas emphasize  general civil litigation, including personal injury/auto accident claims, business litigation, wage and hour claims, and lemon law.  He may be contacted at (909)625-6694 or through his firm's website www.matthewtaylorattorney.com

 

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