Car Damage Claim in California: Repairs, Total Loss, Value

Someone hit your car, and now you are dealing with two problems at once: your body and your vehicle. The car usually gets handled first, because you need to get to work and the adjuster wants it closed fast. This post explains how the property damage side of a California claim works, what the insurer is required to do, and where people leave money on the table.

The short version: you choose the repair shop, you are entitled to see the insurer's numbers, and "repaired" does not always mean "made whole."

Two claims, two adjusters, two sets of rules

After a crash that was not your fault, you usually have a choice of where to send the car damage.

• A third-party claim against the at-fault driver's liability insurance. No deductible, but that insurer has no contract with you and every reason to move slowly or dispute fault.
• A first-party claim under your own collision coverage. Usually faster, but you pay your deductible up front. The California Department of Insurance explains that if your company then recovers from the at-fault driver's insurer through subrogation, it must include your deductible in that recovery.

One rule worth knowing: under 10 CCR § 2695.8(d), when liability and damages are reasonably clear, the at-fault driver's insurer may not recommend that you make a claim under your own policy to avoid paying the claim under theirs. If an adjuster tells you to "just run it through your collision," and fault is not really in question, that is the conduct the regulation addresses.

The property adjuster and the injury adjuster often work for the same company and share notes, so the same care you would use in a recorded statement applies here.

You pick the repair shop

This is the rule insurers are least eager to volunteer. Under § 2695.8(e), no insurer may require that your car be repaired at a specific shop, and once you have chosen a shop, the insurer may not suggest or recommend that you pick a different one, except as Insurance Code § 758.5 allows. The Department of Insurance says the same thing in its consumer guide: the company can recommend a shop if you ask, but only after telling you in writing that you are free to choose.

"Preferred" shops can be convenient, but they have a business relationship with the insurer. You can use them, and you can say no.

When the estimates don't match

The insurer's estimate is a starting number, not the final word. Section 2695.8(f) requires the insurer to give you a copy of the estimate it is settling on, and that estimate must be enough to allow repairs "in accordance with accepted trade standards for good and workmanlike automotive repairs."

If hidden damage turns up or your shop's estimate is higher than the insurer's, ask the adjuster in writing to explain each line they disagree with, and have your shop respond line by line.

A few other rules that come up:

• Parts. Under § 2695.8(g), the insurer cannot require non-original-manufacturer crash parts unless several conditions are met, starting with the parts being at least equal to the original parts in kind, quality, safety, fit, and performance, and the insurer paying for any modifications needed to make them work. Your shop's invoice must say what kind of parts were used.
• Labor depreciation. On a first-party partial loss, labor costs cannot be depreciated unless your policy clearly says so.
• Towing and storage. The insurer must pay reasonable towing and storage charges when they were reasonably necessary, and must give you reasonable notice before it stops paying storage.

If the car is totaled

A car is usually declared a total loss when repairs would cost more than it makes sense to spend. The Department of Insurance describes it as the company paying the lesser of the repair cost or the vehicle's actual cash value.

On a total loss under your own policy, § 2695.8(b) sets out how that value is calculated. The settlement is based on the actual cost of a "comparable automobile," less your deductible, and it must include all applicable taxes and one-time transfer fees, plus license and annual fees for the remaining term of your registration. The insurer must itemize and explain in writing how it arrived at the comparable vehicle's cost at the time it makes the offer. Any adjustments for differences in options, mileage, or condition must be discernible, measurable, itemized, and documented.

Read that itemization carefully. Watch for comparables from a different trim, unexplained "condition adjustments," or missing sales tax. If you cannot find a comparable car for the amount offered, tell the insurer in writing. Under § 2695.8(c), if you do that within 35 calendar days after receiving payment or the final offer, the insurer must reopen the claim.

If you want to keep the car, the insurer will deduct salvage value. The Department of Insurance says those deductions must be "fair, measurable, and discernible," and the regulation requires a warning that keeping a salvaged car may affect its future resale and insured value.

Diminished value: repaired is not the same as whole

A repaired car with a crash on its record can be worth less than it was before. That gap is called diminished value.

California's civil jury instruction on property damage, CACI No. 3903J, recognizes it. The basic measure is the reduction in value or the reasonable cost of repair, whichever is less. But where the car can be fixed and is still worth less afterward, the instruction allows recovery of the reasonable repair cost plus the difference between its value immediately before the crash and its value after repairs, as long as the total does not exceed what the car was worth before the crash.

Two practical points. This is a claim against the at-fault driver, so it belongs in the third-party claim. And the instruction's notes point out that an insurer can limit recovery in its own policy to either repair cost or lost value, but not both, so do not expect your own collision coverage to pay it. Do not wait for the at-fault insurer to bring it up. Ask for it, and back it up with evidence of what the car would sell for now.

What this means in California

The property damage and injury claims run on different clocks. Your car damage claim falls under CCP § 338, which gives you three years for an action for injuring personal property. Your injury claim is generally governed by CCP § 335.1, which is two years. If a government vehicle or a dangerous public road was involved, a formal government claim is usually due within six months, and that deadline covers both.

Insurers also have deadlines. Under 10 CCR § 2695.7(b), once an insurer receives proof of claim, it must accept or deny it, in whole or in part, within 40 calendar days. If it needs more time, it must say so in writing and explain why, and keep sending that notice every 30 calendar days until it decides. After it accepts, it must pay within 30 calendar days. If an adjuster goes silent for weeks, those rules are worth citing in writing.

California's pure comparative negligence rule applies to the car too. If you are found partly at fault, your property damage recovery is reduced by your share, not wiped out.

Practical next steps

Photograph the car before it goes into the shop. Choose your own repair shop, and ask for a copy of every estimate and supplement. If the car is totaled, ask for the written valuation and check each comparable yourself. If the repair was significant, raise diminished value with the at-fault insurer before you sign anything. Read every release carefully: a property damage release should cover the car, not your injuries, and settling the car quickly should never mean settling the injury claim before you know what it is worth. The logic behind why the first offer is a lowball applies here too, and a driver with little or no coverage may bring your uninsured motorist coverage into play. If you want a second opinion on your claim, a free consultation costs nothing and there is no fee unless there is a recovery.