Commonly Used Property Damage Terms

February 19, 2009

When you are involved in a motor vehicle accident, you should be focused on getting the proper medical treatment for you or your loved ones. The last thing you want to deal with is the damage to your motor vehicle that resulted from the accident. This damage is most commonly referred to as Property Damage and can really be difficult and seem unfair.

• PROPERTY DAMAGE: Motor vehicle property damage is damage resulting from an accident involving other vehicles, fixed objects (ie: trees, building etc.) or animals (think deer!). This damage may result in the need for compensation to repair or replace the damaged vehicle that may have been damaged or destroyed during the accident. IN SIMPLER TERMS: YOUR CAR IS WRECKED!
• TOTAL LOSS: Total loss occurs when the insurance company determines that the cost to repair your vehicle exceeds your vehicle’s Fair Market Value. In other words, it would be cheaper for them to pay you the value for your vehicle rather than have it fixed (Example: The repair man says it will cost $6,000.00 to repair your car and your car is only worth $4,500.00. Which choice do you think the insurance company is going to make?). UNFORTUNATELY, THE INSURANCE COMPANY HAS THE CONTROL OVER MAKING THIS DECISION.You have the right to keep your vehicle if the insurance company declares it a Total Loss. However, they will deduct the salvage value from the settlement check they give you. If you do decide to give up your vehicle, you will have to sign over the title.
• FAIR MARKET VALUE: The Fair Market Value of your vehicle is the money that your vehicle is worth at the time of the accident.
• SALVAGE VALUE: Salvage value is the amount of money that your damaged vehicle would bring at a scrap yard. Think of it as the money you would get back to recycle.
• COLLISION COVERAGE: Coverage on your OWN automobile insurance policy that covers you if you are involved in an accident resulting in damage to your vehicle or other property. It does not matter who is at fault for the accident. There is usually a deductible for this type of coverage. Collision Coverage can insure you against damage to your vehicle in certain situations such as your parked car being hit by another car or hitting a stationary object.