Car Insurance Claim and Diminished Value Question

Reader’s Question:

I was found to be at-fault in an accident and the other driver filed a claim against my car insurance company for property damage. He quoted about $5,000 that he said he lost in diminished value. Is there such a thing as “diminished value” claim that is payable under my auto insurance policy?

Chelsea

Fayette, KY

If you just heard about a “diminished value” claim, it does exist. This claim is based on the idea that any car that has been in an accident, regardless of how well the repairs are done, is worth less than the exact same car that hasn’t been in an accident.

The physical damage section of an auto insurance policy does not usually cover claims for a car’s “diminished value” after an accident. It applies to direct and accidental damage only. By definition, direct damage is the actual physical damage done to the car, not a loss in value.

This is the reason why some courts began to question this approach and ruled that since diminution in value was not specifically excluded by the terms of the policy, it was covered.

However, a diminished value claim is a liability claim for property damage and cannot be judged in the same light as a physical damage claim. Under a liability claim, the insurer agrees to pay damages for property damage for which the insured is legally responsible because of an auto accident. If you’re legally liable for the damages of the claimant, then whatever the amount for which you’re liable for is the amount the policy will pay. Be aware that it still is subject to the limit of liability amounts.

It’s always advisable to contact your insurance agent in Fayette, KY or your insurance company directly to have a further discussion regarding the terms of your policy.

Should I Accept My Auto Insurance Company Settlement Offer?

Reader’s Question:

I’m Gayle from Fayette, KY and had a recent car accident. I want to know what actions must I take after a car accident? Do I need to accept a settlement offer from the insurance company?

Gayle

Fayette, KY

Hi Gayle. Under the Kentucky law (KRS 189.635) you are required to call the police to report the accident if someone is harmed or injured; or one of the cars is rendered inoperable. If no police investigation is made and either the car suffers $500 or more in damage expense you must report the incident to the State Police within 10 days. Next, your car insurance company requires you to report the accident to your insurance company and fill out the appropriate forms.

As for your second question, the answer can be a Yes or a No. Car insurance companies in Fayette, KY are notorious for offering settlements that are far less than the injured party deserves. However, if the car insurance company is offering what you feel the car is worth, then you can accept it. It will also be advantageous if you consult an experienced lawyer that is knowledgeable on car accident laws. By contacting an auto accident injury lawyer you may be able to receive a much larger settlement than the car insurance company has offered.

Can I Add Learner Permit Driver to My Auto Insurance Policy?

Q: Can a person with a learner’s permit be on my auto insurance policy?

A: Anybody can be added to your auto insurance policy within reason, and if the person who is getting the learner’s permit is related to you or lives with you, then it may even be necessary. Everybody who has some kind of driving permission must drive an insured car, and regardless of age or learning status, if they are pulled over while uninsured, they will suffer the consequences, which in some cases could include not being able to get their driver’s license when they turn 16. If you have someone with a learner’s permit who is living in your house and you don’t name them on your policy, then if they ever get into a car accident, your company would be able to deny their claim. Your company could also cancel your policy as soon as they found out.

If you want to add a young driver to your car insurance policy but don’t want to pay outrageous rates, you can put them to work on getting discounts. Your new driver should be enrolled in a general driver’s education course, and you can enroll him or her in a defensive driving course as well and be provided with a discount for it.

Will Getting In An Auto Accident Affect My SR22 Filing?

Q: Will getting into an accident interfere with my SR22 filing?

A: Getting into a car accident will not directly affect your SR22 filing, but it could do so indirectly. Your SR22 filing is only affected by whether or not you are paying for car insurance. If you have car insurance, your SR22 status is fine. If you don’t, then it isn’t, and you can lose your license. What could affect your SR22 filing is your possession of car insurance coverage, which can be affected by an accident.

If you are already a high risk customer–which you probably are, since you are filing SR22 insurance–then getting into an accident which is caused by your own negligent driving is almost certain to cause negative consequences. While some companies may be lenient and simply raise the rates on your premiums as a result of the accident, other companies may choose to cancel your car insurance policy as soon as they find out.

You should remember, though, that your car insurance company may not necessarily find out about your accident. Most companies only check your record once a year or even once every three years, so your accident may have fallen off your record by the time they check. However, if they don’t find out on their own and you don’t tell them, then once they do find out they could still cancel your policy because of misrepresentation.

Do I Need To File an SR22 Form For My Older Car?

Q: Do I need to file an SR22 form for an older car?

A: Yes, you need to file an SR22 form for any car. In fact, your SR22 form isn’t for your car at all, it’s for you. You can see this from the fact that some people are required to file non owners SR22 insurance even if the cars they are driving are insured by their owners. It is not your car your insurance company is worried about, but your driving. Having to file an SR22 form has put you in a very high risk category, and your DMV has to be sure that you will be insured because you pose a greater risk of getting into a car accident, especially a serious one.

If you have an older car, you can do some things which will allow you to pay less money to file your SR22 form. For an older car, you should first see how much your car is worth. You can do this by looking in Kelley’s Blue Book. Now take the worth of your car and compare it to how much you pay every year to file your SR22 form. If you are paying more to file insurance than you would get if you sold your car, then you need to have the least amount of insurance that it is legal to have. If your car is worth less than $1000, then you should absolutely cut your coverage as low as it goes.

What Coverage Do I Need In Kentucky For SR22 Insurance?

Q: What all coverage do I need on my Kentucky SR22 insurance policy?

A: Kentucky is a no fault state, so on your Kentucky SR22 car insurance policy you will need to have your regular liability coverage as required in most states, and in addition to that you will need no fault personal injury protection.

First, let’s look at your liability insurance. You have bodily injury liability, which covers the death or injury of the other driver in their passengers when you are in a car accident which you are found to be at fault for. Your Kentucky SR22 policy must have $25,000 of bodily injury liability for each person, with a maximum coverage per accident, no matter how many people, of $50,000. Your second kind of liability insurance is your property damage liability. Your Kentucky SR22 will need ten thousand dollars worth of this coverage, and it will cover any damage you cause, to cars, fences, whatever, if you are at fault for an accident.

Next, we take in your no fault personal injury protection coverage, of which you will need ten thousand dollars worth on your Kentucky SR22 policy. Your personal injury insurance will cover any injuries you yourself sustain in a car accident.