Vehicle Damage – Should I use my insurance or the other person’s insurance?

When an accident happens and the other person is at fault, your first concern is often getting your car fixed.  I try to remind clients that their health is the most important thing and that they should focus on that.

However, your car will need to be taken care of and people often are not sure whether they should use their insurance (if they have collision coverage) or the other person’s insurance.  Here is a simple explanation of your options:

Option 1  –  Using Your Own Collision Insurance Coverage:  You have a contract with your insurance company whereas you do not have a contract with the other person’s insurance.  That means that you have paid your company a premium in exchange for coverage.  Because you are contracted with your insurance company, they have contractual obligations to you which they must satisfy or you can sue them for breach of contract and bad faith.  Thus, your insurance company is arguably more motivated to take care of you than the other person’s insurance.  Usually your insurance company will begin fixing your vehicle right away.  However, you will have to pay your deductible and wait to get reimbursed from the other person’s insurance down the road.  In summary, using your insurance company is often quicker and carries with it some protections afforded by contract law but requires that you be able to float your deductible.  Also, remember that Nevada law specifically says that your company cannot raise your premiums for using your coverage when you are not at fault for the accident.

Option 2 – Using the Other Person’s Insurance:  If you cannot afford your deductible or simply prefer to use the other person’s insurance, you will normally have to wait for a week or two before the repairs begin.  The other insurance company typically wants to complete their investigation before they will accept liability, which includes speaking to their insured and reviewing the police report, if applicable.  Police reports are not usually ready for 7-10 days after the accident.  For this reason, there is normally a delay.  Many people choose this option if their vehicle is still able to be driven because they don’t want to float the deductible.

There is no one-size-fits-all approach to making this decision.  At Hammond & Hammond, we review options with clients and help them to make an educated decision.  Some of the main factors include financial ability to cover the deductible, condition of the vehicle and whether it can be driven, available rental coverage, amount owed on the vehicle.  Another huge factor is whether or not the vehicle is currently in a storage facility  – if it is, an accident victim has duties to mitigate damages which may include moving the vehicle to an alternate location as storage fees can be costly and unreasonable fees may not be covered by an insurance company.

In short, it is important to consult an attorney to review the circumstances of your cases.  Remember, at Hammond & Hammond, the consultation is free!




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