Many of our clients who have been involved in auto accidents ask us who is going to pay for their property damage. We advise them that if they purchased collision coverage on their automobile insurance policy and the accident was not their fault, then they have two potential options, 1) they can have their own insurance company for the repairs, or if their vehicle has been determined to be a total loss, then they will be paid the actual cash value of that car but will incur their deductible. The client’s insurance company will then pursue the at-fault party through their property damage liability coverage to obtain reimbursement for what the company paid to the client for their property damage as well as recover the client’s deductible from the at-fault party’s company.
2) The client can decide to pursue the at-fault party through their insurance company under the mandatory coverage Floridians are required to carry on their vehicles called property damage liability coverage. Unfortunately, Florida law only requires a car owner to carry $10,000.00 in this form of coverage which can be problematic if the vehicle’s repairs or total loss value exceed that coverage, or if there are multiple claimants from the same accident who seek their property damages from that limited amount of coverage. Collision coverage typically does not have a set limit on the amount of coverage an insured has purchased.
We also advise the client that in addition to their property damage, they can also seek payment for a rental car from the other party’s property damage liability coverage, or if they did not rent a car then loss of use reimbursement for the period of time they are without the use of their car due to it being repaired, or due to the lag time between their total loss and the payment of the actual cash value by the insurance company.
If the client purchased rental car coverage under their own policy of insurance, they may make a claim for the rental car under that coverage as well, but the client’s own insurance company is not responsible for loss of use reimbursement under that coverage if they have chosen not to rent a car.
If the client’s vehicle is repairable, then they can attempt to pursue a claim for diminished value compensation, which is the difference in the value of their car after repairs versus the value of that car if it had not been involved in a collision. However, they must actually realize this loss before being entitled to compensation, meaning they need to trade in the car or sell it before attempting to seek compensation for the alleged loss of value. The client may only pursue this damage from the at-fault party’s coverage as the client’s collision coverage typically does not provide for this type of damage reimbursement.
We tell our clients that if they were deemed to be the party at fault and they purchased collision coverage under their own policy of insurance, then it will cover their property damage regardless of that personal fault.
It is our advice to our clients that they purchase collision coverage to protect themselves for a property damage loss, regardless of fault, so that they will be compensated to the fullest extent possible despite the potential limited property damage liability coverage on the other party’s policy of insurance.