At least a thousand times a day, one Colorado insurance company or another is resolving a property damage claim by authorizing the repair of a damaged vehicle. Also, while a vehicle is being repaired, the insurance company is authorizing a rental car for the inconvenienced owner of the damaged car. Seems fair and legal, right? WRONG! The purpose of this article is to illustrate that a fair resolution of your auto property damage claim includes more than the insurance company paying to fix your vehicle.
If this is all the insurance company does, they are getting away with cheating you out of your legal right to be made whole after a car crash. In short, Colorado law requires insurance companies to do so much more. However, if consumers do not know their rights, the insurance companies can get away with offering far less than what they should. If someone damages your car in a collision, you are owed much more than a repaired car and a rental car.
Before I get too far, I want to make sure that I identify what I am talking about. If you have an insurance policy on your own car, and you cause a crash, your insurance company has the right to examine the policy language and only pay pursuant to the policy language. This means they may legally deny certain claims such as loss of use, entitlement to a rental car, or recovery of diminished value if the policy does not cover those claims. I am not talking about those kinds of situations. In this article, I am discussing those cases where someone else causes a car crash that damages your car and you are dealing with the at-fault driver's insurance company.
In those circumstances, where another driver damages your car because of negligent driving, what the at-fault driver's coverage says they will pay for is not relevant. Instead, the only proper consideration is what Colorado says you are entitled to. It is my contention that the black letter law entitles you to much more than what insurance companies will voluntarily give you. In short, Colorado law clearly and unambiguously mandates that you ARE entitled to both a check for the loss of use of your vehicle (not just a rental car) and a check for the overall diminished market value of your car (not just fixing your car). This is well-settled law in Colorado.
A) What They Won't Give You Unless You Ask:
On nearly every occasion when your car is damaged in a collision and returned to you, you are not "made whole" simply because your car was repaired. To the contrary, you are still out thousands or tens of thousands of dollars in losses that the insurance company will not pay you unless you speak up and inform them that you know your rights.
1) Loss of Use?
If you are given a Chevy Impala to drive as a rental vehicle while your 2013 Audi A-6 is being repaired, you are not being equally compensated for your loss. Yes, you have a replacement car to get you from place to place, but you are driving a less valuable vehicle while you continue to pay a monthly car payment for a vehicle twice as expensive as the rental car you are driving. This is just one example of a claim you can make for loss of use when your car is damaged.
Colorado law requires that insurance companies must pay for the loss of use of your car in addition to restoring your vehicle to the condition it was in before the crash. Three examples of loss of use include: 1) the repair time on an expensive or unique car, 2) repair of a work vehicle, or 3) repair of a hybrid or gas efficient car.
A) Repair Time on an Expensive Car:
A BMW 750iX may cost you $1,200 or more a month to lease. When an insurance company replaces your top of the line German sedan with even a top of the line luxury rental vehicle such as a Cadillac, you may still not be made whole. After all, if you leased a Cadillac, your comparable lease per month may be around $500-$600 per month.
Accordingly, if your BMW is in the repair shop for a month and you continue to pay your BMW sized lease, you are effectively $600 or more out of pocket in the loss of use of your vehicle. Not surprisingly, insurance companies do not look at it this way, but they are wrong. The law clearly entitles you to the loss of use of your vehicle. Under this scenario, you are unquestionably owed an additional check for the difference between the lease payment for your luxury vehicle versus the market value for a lease of the rental car you were issued.
B) Repair of a Work Truck:
Alternatively, assume that your vehicle was a commercial Ford F350 pickup truck. Also, assume that your business requires you to use this truck for commercial purposes in a manner that a standard issue Toyota Tundra rental could not be used to complete. If you used the F350 to earn $3,000 per month in hauling large landscaping equipment around town, and you were unable to use the rental truck for the same purpose for the month your truck was being repaired, you lost income. In that case, black-letter Colorado law holds that the insurance company owes you at least the loss of use of your F350, including the income you lost.
C) Repair of a hybrid or gas efficient vehicle:
These days, many folks drive hybrids to save money on gas. However, as a rule, most rental cars are not as gas efficient as hybrids. Many rental car companies have few, if any, hybrids in their fleet. Accordingly, if your hybrid is in the shop for a month, and you have to spend extra money to fill your rental car full of gas, Colorado law would say that the insurance company owes you a check for the loss of use of your hybrid in the form of the extra money you had to spend on gas to drive your rental from place to place.
2) Loss of Market Value:
With CARFAX and other online databases, detailed information regarding a vehicle's past history, including prior car collisions and subsequent repairs, is only a few key-strokes away from any potential buyer. The simple truth is that a repaired vehicle always has less market value than a comparable vehicle that has not been in a crash.
Consequently, anyone who simply takes a repaired vehicle back and considers the insurance company's obligation fulfilled is potentially losing thousands of dollars by not insisting that the insurance company make good on their legal obligation to pay the owner of the repaired vehicle for diminution in value. In fact, the only way the insurance company does not have to pay for diminution in value is if they can prove that the repaired vehicle lost no market value as a result of the repair.
I submit that all repaired vehicles suffer diminished value in comparison to a similar vehicle that has not been involved in a car accident. Accordingly, insurance companies should always be analyzing and paying the difference in market value caused by a crash and subsequent repairs. However, if you do not insist on being compensated for diminution in value, they will never voluntarily pay that additional money for loss of market value.
B) How to Get them to Follow the Law:
Now that you know your rights, will the insurance company just fall into line? Probably not. Once you make an intelligent demand for loss of use or loss of market value, the adjusters for the insurance companies will likely act confused. They will tell you about their internal policies and cite inapplicable language from the at-fault driver's insurance policy, and might even misstate Colorado law to you. It is highly likely that even after you show them that you are smarter than the last thousand consumers they snowed with this nonsense, they will still deny your request. So, what can you do at that point? Do you give up and accept the losses? NEVER! You are now way too smart to give up.
Insurance companies hate what I am going to tell you next because it works almost every time. The simple fact is that this fight is not really between you and a large godless corporation. Instead, the fight is between you and the often forgotten at-fault driver. Just because you were hit by a guy with Allstate does not mean that you have to fight with Allstate. In fact, if Allstate (as merely an example without any malice intended) is unwilling to pay you for your loss of market value or loss of use, the best way to get what you are entitled is to bring a lawsuit against the at-fault driver for your losses.
Again, it is important for you to understand that insurance companies really hate this advice, because it is effective. After the at-fault driver gets sued, who do you think they call for help? You guessed it: their insurance company. Once you file the suit, the insurance company has to either hire an attorney for the driver and argue these issues in court, or they will most likely get back on the phone with you and offer you a reasonable settlement. Either way, you win. The law concerning loss of market value and loss of use are so clear in Colorado that you will likely prevail in Court. Provided that your case gets to court, the insurance company will have to pay any judgment you win.
C. Cautionary Note:
The tactics described in Section B of this article are effective and can be done anytime if you are NOT claiming a personal injury arising from the same crash. But, if you are claiming injury, it is CRITICAL that you consult your attorney before you file a lawsuit for your property damage because filing it may preclude you from seeking personal injury compensation.
If you bring suit in Colorado, you must bring all claims (personal injury and property damage) against the at-fault driver at the same time. Consequently, before you take matters into your own hands, you must first check with your attorney to make sure that your personal injury case won't be left in shambles. A simple call to your personal injury attorney is mandatory to make sure that you preserve all of the claims that are brought in conjunction with one another.
At Anderson, Hemmat & McQuinn, we believe it is important that you know your rights if you have been involved in a car collision with a negligent driver. Insurance companies intentionally conceal and remain silent about potential claims that you can make when your car has been damaged and needs to be repaired. Unless you know your rights, you might be forfeiting thousands of dollars in compensation. Call us today for a free consultation!