Insurance, and Dealing with Your Insurance Company

Read your insurance policy thoroughly so you can understand and verify your coverage
Review the section of your insurance policy often called “Conditions” or “Insured’s Duties After a Loss” so you can fully understand your responsibilities throughout the service of your claim.

When your vehicle is damaged or stolen, one of the first things you should do is file a claim with your insurance company. If the damage to your vehicle was caused by another driver, you can file a claim with your own insurance company if you have Collision or Comprehensive coverage, or you can file a claim with the insurer for the owner of the other vehicle.

Collision coverage protects you from damage to your vehicle by a collision with another vehicle, a fixed object such as a tree, fire hydrant, masonry structure, etc. Comprehensive coverage protects you if your vehicle is vandalized or stolen, or if it is damaged due to impact with an animal, a falling tree limb, rocks, debris, etc. Comprehensive insurance also covers your vehicle for damage unrelated to a collision, such as broken glass, or damage from hail, storms, or floods.

• Immediately report the accident to your insurance agent or directly to your insurance company.
• Immediately contact the police if your vehicle is stolen, vandalized, or damaged by a hit-and-run driver. Without a police report your company could deny your claim! NJ Division of Motor Vehicle law states you must report any accident involving property damage in excess of $500.00 to the appropriate authorities.
• Before you have your vehicle repaired, you must allow your insurance company to inspect your vehicle. If you fail to do this, your insurance company will not pay for your repair.
• After your vehicle has been damaged, you must protect your vehicle from any further damage. As an example, if a tree fell on your vehicle and it shattered your sunroof, and a subsequent rainstorm flooded and damaged your interior, your insurance company could refuse to pay for the damaged interior.
• Work closely with your insurance company’s adjuster and make yourself available any time they need to speak with you or inspect your vehicle. Failure to do so could result in your insurance company denying your claim.
• When you file a first party claim, you have a direct contract with your insurer that requires the company to fulfill all the conditions stated in your policy. However, the contract also places duties and requirements on you, the insured, when filing a claim. Therefore, you need to review that section of your policy often called “Conditions” or “Insured’s Duties After a Loss.”

Like any other for-profit business, insurance companies are in business to make a profit. They want to maximize income from their customers and minimize what they pay out in settlements and repair fees. They can sometimes cross the line when it comes to your rights, and it’s important for you to know what your rights are so you can have the best outcome and the best repair of your vehicle with the least amount of frustrations.

Yes you can! As long as you’ve chosen a repair shop that’s licensed by the State of NJ, your insurance company must attempt to negotiate with the repair shop you’ve chosen to come to an agreed upon price for the repair. In the unlikely event your insurance company cannot come to an agreement with your repair shop, they’ll provide you with the names of licensed shops who can do the repairs for the price the company has determined is appropriate for repairing your vehicle.

• Repair estimates are notoriously inaccurate at predicting the final cost of fixing a car. This is because they are purely initial estimates of the work made without disassembling the vehicle to fully inspect the hidden damage. That’s why they’re called “estimates.” However, this is normal, and the repair shop you choose will remain in contact with your insurance company during the repair process and will report hidden damage to them so they can revise their settlement for your vehicle.
• One repair shop might provide you a quote covering the cost of fixing a part. Another repair shop might tell you the cost of replacing it entirely. These are not comparable services.
• Finally, just because one autobody shop is cheaper, doesn’t mean that it’s the best option for you or your car. There are some dishonest shops out there who will intentionally low-ball your estimate trying to pull you in as a customer, all the while knowing that once they have your vehicle and work has begun, you’re unlikely to stop the repair and take your vehicle somewhere else. And once they begin work, they’ll report the additional parts and labor as needed for your repair. Suddenly that low price estimate isn’t lower at all. You should also consider, if an autobody shop is willing to deceive you during the estimate process, what additional deception might you experience when they begin the work?

No. The insurance company is only obligated restore your vehicle to the same condition it was in prior to the accident. Sometimes this requires the use of original equipment manufacturer (OEM) parts and sometimes after-market or 3rd party manufactured parts can be used.

No you don’t! While New Jersey regulations do permit the use of after-market parts if they are warranted by the manufacturer to be of like kind and quality as OEM parts, however you don’t have to accept them. The final choice is yours but if the insurer wants to use non-OEM parts and you decide to use more expensive OEM parts, you will likely have to pay the difference in cost. At Summit Forge, we can help you understand the real impact of after-market parts when it comes to quality, rust or corrosion resistance, time required to install them with additional adjustments that may be required for proper fit & finish, and potential impact to your vehicle’s warranty.

Note that NJ State regulations require the insurer to clearly indicate in writing on the adjuster’s appraisal which parts are after-market parts.

Yes! In fact, it’s often beneficial to do that, and it would likely be more cost-effective to repair other parts of the vehicle at the same time as your collision repair. As an example, if you had other scratches or dings near the area of the vehicle where the collision occurred, it’s simpler to repair those areas too, then repaint those areas and the area where the collision occurred all at once. However, you would be responsible for paying for the additional repairs over and above the monies paid to you from your insurance company.

Once your insurance company adjuster has inspected your vehicle, your insurance company may decide to repair your vehicle, or if it’s deemed a total loss, where the cost to repair your vehicle exceeds the estimated value of your vehicle, they may decide to replace it, or pay you for the actual cash value of your vehicle, based on the estimated value of your vehicle would likely have sold for prior to the accident. In many states, insurance companies will total a vehicle when the adjuster’s estimate of the cost to repair your vehicle exceeds 80% of the vehicle’s actual cash value. This is because, once your autobody repair shop has started repairing your vehicle, it’s not uncommon for the shop to uncover hidden damages that weren’t visible by the insurance company’s adjuster upon initial inspection.

• You choose and pay for an appraiser to represent you.
• The company will choose and pay for an appraiser to represent them.
• The two appraisers will select a neutral 3rdparty “umpire”, and (for whom you and your company split the cost, if necessary.)
• Both appraisers will give their estimates for the loss.
• If the appraisers can’t agree, they will submit their differences to the umpire and a decision by any two of the three is binding.

According to NJ Law, every insurance company operating in the State of NJ is required to select one of three methods for use in the settlement of all total loss claims.

The three methods which have been approved by the Stet of NJ Commissioner of Banking and Insurance are:

1. Taking the average of the retail values of substantially similar vehicles as listed in the current editions of the “Automobile Red Book” (or “Older Car Red Book”) published by Penton Media and the “N.A.D.A. Official Used Car Guide” (or “N.A.D.A. Official Older Car Guide”) published by the National Automobile Dealers Used Car Company.
2. Using a quote obtained by the insurer for a substantially similar vehicle available for you to purchase from a dealership within 25 miles of where your car is normally garaged.
3. Utilizing the services of an approved source, including computerized databases that produce fair market values of substantially similar vehicles. At this time Audatex, Mitchell International, CCC, Vehicle Valuation Services Inc and CARFAX are approved for use in determining fair market values.

If your vehicle cannot be valued using any of these three methods because they fail to represent a true cross-section of the market to determine the fair market value of your car, the company is then required to use the best available method and fully explain to you, in writing, how they calculated the amount they are offering you.

In addition to informing you of which method was used to value your car, your insurance company must also provide you with an itemized list showing all additions, deductions, and sales tax applicable to your vehicle.