Today I drove my family to our sons soccer game and I got into a car accident which totaled our beloved, 12 year old Honda Odyssey. When car accident happens you have to first and foremost be grateful for the health of your passengers and yourself.
My family is okay, and so am I.
Thank you for the thoughts and well wishes. It goes without say that we are shook up a bit but otherwise in good spirits. Now while dealing with the aftermath, I quickly realized that we will get a raw deal for the damage we incurred without any wrongdoing on our side. Having a semi-truck lose control and cross three lanes to pin your car agains the wall is not something that you can prevent ( see also the video towards the end of this blog. ).
I am now looking at the differences in insurance policies and I realize that there is a huge difference between the cash-value, and the replacement value of a car. Obviously the replacement value for a 12 year old minivan is almost nothing, while it will cost me easily $10k to replace the car and likely event more.
Also rather frustrating is the fact that we had just done some major maintenance on the car for around $2k three weeks ago plus we just replaced all 4 tires two weeks ago for about $500. Oil change three days ago, full gas tank one day ago. Needless to say the car was feeling and driving like a gently used, new car. No noise from the drive-train, no issues with the power steering, and no misaligned wheels pulling to any side.
But what about the money
To be frank, the blue-book value of the car is a measly $1.5k. Getting a comparable car would cost us about $10k but to get a car which would last a few extra years we will have to likely invest about $13k-$15k. What ever happened to making-whole-the-damage-done-to-ones-property if things happen ?
Actual Cash Value
The traditional insurance definition of actual cash value is the cost of a new or similar replacement item, minus depreciation. Remember the value your new car lost by simply driving it off the lot? That’s how much a new car depreciates when it’s purchased. Nearly all vehicles depreciate over time with the exception of exotic collector models.
You can also think of the cash value of the amount of money it would have sold for in the used car market at the time of the accident. For this reason, actual cash value is also referred to as the “fair market value.”
The actual cash value is the standard level of coverage that comes with most comprehensive car insurances. Comprehensive car insurance is optional insurance and will increase your monthly premium.
When you drive a new car off the lot, its value drops immediately. In fact, new cars can lose up to 12% of their value when you sign the dotted line. If the vehicle is stolen, replacement cost insurance will reimburse you for 100% of the value of a new car.
This level of insurance is not included in every policy, and may not be available by all insurers. Opting for replacement cost car insurance will also increase your monthly premium.
When car accident happens
So you think you are bullet proof and an accident is highly unlikely because you are such a great driver. Well I have been driving accident free for the past 23 years. I too thought that I am quite good at avoiding dangerous situations. However you have to always factor in the other side of the equation. It may not always be up to you and to your skills to get out of hazardous situations.
Sometimes things like these just happen.
Of course we are insured and so was the truck driver. Things are however still going to be very expensive for us. I believe that this car is going to be a total loss for the insurance company and for us. A 12 year old Honda Odyssey is not fetching much value out there. For us as a family however it was THE car. It drove us in the past to all of our soccer practices, our vacations and to work. We took good care of it and it took good care of our family.
We will receive word some time within the next 24 hours as to what we can expect to happen to our car and how much or how little the insurance companies are willing to pay. You always wish you had signed up for a better insurance plan when car accident happens.
Starting the process
After an accident such as this one, the first and foremost important thing is that the Ambulance, and Firefighters can get to you. They have to make sure that your family and yourself are okay and that the car itself is not a hazard. Once this is taken care of and your car(s) are securely removed from the highway and you are out of the traffic lanes, you want to have the Police help with figuring out what went on and possibly to determine who was at fault.
You should never admit any guilt at the scene, even if you have a feeling that you may be at fault at least to some degree. Also you should not talk with the other party about what when who or why. Let the police play the referee and ask all the important questions.
The Police officer should then provide you with a report form which you need to keep to provide to your insurance company. Make sure that you have at least the other sides Name address, insurance information, and the number plate information. You are under no obligation to give him or request his drivers license.
Take as many pictures as you deem suitable of your car, and the other car. You may not need them but maybe you will need them to document the scene, the condition of the street, and of course the condition of your car and the party’s car. Taking a short video while walking around the car and looking inside the car will also help the insurance company’s case handler to determine the damage on your car.
In our case the car had to be towed to a garage, where we had to sign some paperwork, and then had a family friend help us get all of our belongings out of the car. Make sure you sign the paperwork to have the insurance agent be able to look at the car, and take it off the lot if they deem they have to do so. Because the garage lot of the towing company is likely charging a daily fee, it is in the insurance company’s best interest to get it off the lot as soon as possible.
Once you are back home or at a Hotel you can then start the process with the insurance. Call your insurance and start your claim. You will be asked a lot of questions so be sure to have all required information and paperwork. For example the police report, the insurance information of the other party, your drivers license, your registration information, and of course your insurance policy number and the other sides insurance company.
Your insurance will take all of your information and create a case for you. At the end of your call with the insurance company you should have a case number and instructions of the next steps involved in the process.
In our case we had to wait for the case worker to call us the next day as the accident happened on a Sunday. They will also want to be able to inspect your car then and possibly move it to another facility which they operate or partner with.
Working the case
When the case worker called, she went through all the required information again and wanted to get our statement again of how the accident happened in our own words. She also took note of our images, and videos and asked us to email them to her, and upload them onto the insurance companies web page, attaching it to our case number. Providing the video footage when the actual accident happened will also make it easier for the insurance company to verify your statement.
Just about three months ago we installed a add-on dash-cam which was great. The picture quality, especially at dusk was way better than I would have expected. Also during the accident, it took some extra footage and stored it in the EVENTS folder instead of the NORMAL folder.
I will write more about the process over the next few days and weeks as we go through the process with the insurances and are going to get a new ( used ) car to call our own.