You were in a crash, no fault of your own. Repairs are made to your vehicle and the at-fault party’s insurance has paid the body shop bill. According to the legal definition, the vehicle is deemed to have been restored to its previous condition. Even though your vehicle is back on the road, you’re concerned that when you go to sell, you will get less money for it because it was in a crash and had to be repaired. When you go to sell, the buyer may get a Car Fax report and see that the car was involved in a crash and that repairs were made to the vehicle. The potential buyer may offer you less than if the car had never been in a crash. While Ohio law allows claims for diminished value, the insurance company for the at fault driver will likely refuse to pay the difference.
It is going to be hard to get the insurance company to pay because proving that your car’s fair market value is less requires expert testimony.
It is unlikely that a diminished value claim will be successful unless you have these two things:
1. Your car is new or nearly new with a value of more than $20,000.
2. The repairs required must have been substantial for example more than $10,000.
If both things apply, a diminished value claim is worth investigating.
 See Braum v. Kinderdine, 2nd Dist. No. 26298, 2015-Ohio-696 and see Rakich v. Anthem Blue Cross & Blue Shield, 172 Ohio App.3d 523, 2007-Ohio-3739, 875 N.E.2d 993 (10th Dist.).
If your car’s value is less than the amount owed on the loan, and you don’t have gap insurance, it may be difficult or impossible to afford a replacement car. When you hire the Rinehardt Law Firm for your injury claim, we will develop strategies to get you into another car as soon as possible.
If you decide to try to handle this on your own, here are some suggestions for getting a replacement car:
Try working a “collateral exchange.” Your wrecked vehicle was the collateral on the loan to the finance company. The finance company shouldn’t care whether it has your vehicle as collateral or another of equal value.
Try buying another vehicle and financing the balance owed on your totaled vehicle into the purchase price, allowing you to pay over time, while enjoying your new vehicle. For this to work, you will have to deal with the same dealership that sold you the original vehicle.
Did you purchase Credit Life Insurance or Credit Disability Insurance with your vehicle? If so, you are entitled to a rebate of that portion of the premium that was “unearned.”
If have an extended warranty on your vehicle, you must contact the dealership to make sure that you are refunded the unused portion of the premium you paid for it.
Coverage limits on an umbrella insurance policy typically start at $1 million, and can go up to $10 million. When purchasing this coverage, it is important to get both a liability umbrella and an uninsured/underinsured umbrella. The liability umbrella will protect your assets, but it is the UIM umbrella that will protect your family from the bad drivers on the roadways.
The price of umbrella insurance is surprisingly reasonable. Typically, a $1 million policy costs around $300 per year. A $3 million policy will cost less than three times the cost of a $1 million policy, and is usually under $500 per year.
12.5% of drivers on Ohio roadways are uninsured. Another 5% have only state minimum coverage. We see it all the time. A client is badly hurt due to someone else’s carelessness. The wrongdoer has no insurance or has only state minimum coverage ($25,000 per person). In the cases where the wrongdoer has no insurance, our client’s recovery is limited to his or her own uninsured motorist policy. If he or she doesn’t have an uninsured motorist policy, often there is no means for recovery. In the cases where the wrongdoer has state minimum coverage, our client’s recovery is usually limited to the $25,000 policy plus any underinsured motorist policy he or she may have.
Damages in car collisions include medical bills, lost wages, future medical treatment, future loss of earnings, physical pain, mental suffering, and past and future inability to perform usual activities. The total of these damages can exceed a state minimum policy in even a minor collision. In a major collision, with significant injury and permanent disability, these damages can exceed seven figures.
An umbrella policy can protect you in two important ways. Let’s consider two scenarios:
A. You are driving at a speed of 50 mph, you see a billboard that distracts your attention from the roadway. You don’t see that traffic ahead has stopped and you rear end another driver. The man you hit suffers a broken collar bone, a severe concussion, and broken wrist. Both the collar bone and the wrist injuries require surgery. The man’s medical bills exceed $75,000. The injured man misses work for four months and has lost wages of $15,000. You have a liability policy of $100,000, but no umbrella policy.
B. Your spouse is hit head on by a young driver who is texting and driving. Your spouse suffers several broken bones, internal injuries and has several teeth knocked out. A week in the hospital and several weeks in a rehabilitation nursing facility results in medical bills of more than $200,000. The young driver who hit your spouse has a state minimum policy of $25,000 and no assets. You have an underinsured motorist policy of $100,000 but no umbrella policy.
In scenario A, the injured man will recover your $100,000 policy. In addition, he will have the right to sue you for his damages exceeding $100,000. Your home, assets and income will be used to satisfy any damages above your insurance policy.
In scenario B, your spouse will recover the $25,000 policy from the wrongdoer, and will recover $75,000 from your underinsured motorist policy ($100,000 less the amount recovered from the wrongdoer). This money will be used to pay your spouse’s medical bills. You will be responsible for the remainder of the medical bills. Your spouse will not be compensated for his or her other harms and losses.
Suppose you had a $1,000,000 umbrella policy. in scenario A, the policy would be used to cover the injured man’s excess damages. In scenario B, the policy would be used to compensate your spouse for the extent of his or her harms and losses.
Your Insurance agent may not have offered you an umbrella policy or explained what one is when you purchased your insurance. Call your agent today and ask for a quote. Be sure to specify that you want an uninsured/underinsured umbrella and not just a liability umbrella. Like an umbrella on a rainy day, you will be relieved to have it when you need it.
If you are involved in an accident with an uninsured motorist, and you are not at fault, it is up to you and your insurance company to cover the costs. If you don’t have UIM coverage, you are at risk for substantial financial loss. Your damages including property damage, medical bills, lost wages, physical pain and mental suffering will not be covered by your insurance company.
Uninsured motorist coverage will reimburse you, a member of your family, or a designated driver if your car is hit by an uninsured driver or a hit-and-run driver. Underinsured motorist coverage comes into play when the driver who hit you has insufficient insurance to pay your damages. Remember, in Ohio drivers are only required by law to carry $25,000 in coverage per person and $50,000 per accident.
What the Statistics Tell Us
A study conducted by the Insurance Research Council (IRC) in 2014, showed that in 2012, 12.6% of motorists in the United States, that is one in eight drivers, were uninsured. Ohio was ranked number 17 in having the highest number of uninsured motorists on the road. 13.5% of Ohio motorists were uninsured in 2012. That equates to more than 500,000 people in the state of Ohio driving without insurance.
It is also more likely that an uninsured driver will cause an accident than a driver with adequate insurance. In 2015, 94,647 Ohio drivers were uninsured at the scene of a crash. The uninsured driver was at fault 67% of the time. Uninsured drivers were responsible for 21% of the total number of car crashes in Ohio in 2015. This means that uninsured drivers are twice as likely to be involved in an accident.
Will My Rates Increase If I Use My Coverage?
The law is very clear that an insurance company is not permitted to increase your premium if you make an uninsured motorist claim against your policy if you are not at fault for the accident. (Ohio revised code section 3937.23)
Every insurance company has a duty to handle claims in good faith when it comes to dealing with its own customers. If your insurance company takes an overly adversarial approach to your UIM claim, it may have violated its duty to handle your claim in good faith.
Contact Rinehardt Law Firm
Even if you have UIM coverage, insurance providers may refuse to pay you a fair amount for your damages. In that case, you bring a claim against your own insurance company to get the benefits you paid for and were promised. Insurance companies often offer claimants very low amounts without finding out how much the claimant has suffered or how the accident has impacted your life. If you have been involved in an accident with an uninsured or underinsured motorist, contact Rinehardt Law Firm for a free consultation.
To understand how much insurance you should have, it is important to know the types of coverage available in a typical Ohio automobile insurance policy. Here is a quick summary:
Liability Bodily Injury (covers you for an accident where you are at fault and someone else is hurt)
Liability Property Damage (covers you for an accident where you are at fault and there is damage to someone else’s car or property)
Medical Payments (covers medical bills incurred by you or a passenger in your car. Medical payments coverage will pay regardless of who is at fault)
Uninsured/Underinsured Motorists (often called UIM-this covers you and passengers in your car in cases where the at-fault driver has no insurance or the at-fault driver has a policy that is too small to make up for all the harms and losses caused)
In Ohio, the state minimum insurance limit for liability coverage that an insurance company can sell on a policy is $25,000.00 per person, $50,000.00 per accident. This means that the minimum amount of coverage that you are required by law to have is $25,000.00 to cover damages in an accident that is your fault. If you cause an accident, the liability coverage of $25,000.00 will pay any damages that are suffered by the other drivers or passengers involved. With the high cost of medical treatment and the potential of other significant harms and losses, like time off work, $25,000.00 in coverage provides very little protection to you.
The insurance company will never pay more than the limits of liability coverage that you purchase. If you cause an accident, and your insurance is not enough to cover the other party’s damages, the other party has the right to sue you to collect from your personal assets. This means that the person damaged may sue you and obtain a judgment and then seek to garnish your wages or place liens against your real estate and other personal property Because of this, it is important that you have enough insurance coverage to protect yourself in case you cause an accident.
How much you pay for a liability policy obviously increases as the limits of liability increase. However, it may not cost as much as you think. You may be able to increase liability coverage from $25,000.00 to $100,000.00 for as little as a 5% increase because the additional coverage is not nearly as expensive as getting the policy in the first place. Shop around to get the best price. Having the right insurance and the right insurance coverage is often compared to having an umbrella. It is like Murphys’ law. When you have an umbrella it never rains. The minute you leave your umbrella back at home, you find yourself in the middle of a rainstorm. Having enough liability insurance coverage means protecting all the things that you’ve worked so hard to acquire.
But what happens when an accident is not your fault, and you are the victim? Read our next blog about how to protect yourself from the uninsured and underinsured drivers on our roadways.