What to do when your car is damaged in an Alaska accident
A collision on the roads of Anchorage, Fairbanks, or Juneau can leave your car repaired but still worth less than it was before the wreck. Buyers often pay less for a vehicle with an accident on its history. This loss in market price is called diminished value, and you may be able to file a claim for it.
When another driver is at fault, their insurance should cover your property damage. Alaska law sets the minimum required liability coverage for property damage at $25,000 1. This amount may or may not be enough to cover the full cost of repairs and any diminished value.
First-party and third-party claims
After an accident, you will file either a first-party or a third-party claim. A first-party claim is one you file with your own insurance company, for instance, when using your collision coverage. A third-party claim is one you file against the at-fault driver's insurance company. Your relationship with the insurer is different in each case. With your own insurer, the process is defined by your policy contract. A claim against another person's insurer can be more adversarial, as you are not their customer.
The insurance claim process
After you report the accident to the police and the insurance companies, an investigation will begin. The insurer will work to determine fault and have an adjuster inspect your vehicle to estimate the cost of repairs. Based on this assessment, the company will make a settlement offer. This offer will be for the cost of repairs or, if the car is a total loss, for the car's actual cash value.
If your car is a total loss, the at-fault driver's insurer may be responsible for the reasonable cost of a rental vehicle 2. Alaska regulations direct insurers to pay the undisputed amount of a claim within 30 working days once liability has become reasonably clear 3.
What is "actual cash value"?
If your car is declared a total loss, the insurer must pay you its actual cash value (ACV). This is the market value of your car right before the crash. To determine ACV, the insurer will find recent selling prices for a "comparable motor vehicle" in your local area. Alaska regulations define a "comparable motor vehicle" as one of like kind, quality, and condition. You can do your own research to make sure the insurer's valuation is fair.
What about loss of use?
You may also be owed for "loss of use," which is compensation for being without your vehicle while it is being repaired or replaced. Courts have recognized that you can be compensated for the loss of your property's use, a principle addressed in cases like Avery v. State Farm Mutual Automobile Insurance Company.
If you have rental reimbursement coverage on your own policy, it can help pay for a rental car. This coverage is a specific, non-standard agreement between you and your insurer. It is governed entirely by the terms, daily dollar limits, and total per-accident limits in your insurance contract.
If you disagree with the insurer
If you believe an insurer's settlement offer is too low, or if your claim is delayed or denied, you do not have to accept the decision. It is best to respond in writing. Calmly state the facts of your claim and explain why you believe the offer, delay, or denial is incorrect. Provide any supporting documents you have, such as your own repair estimates or comparable vehicle listings.
This article provides general information and does not constitute legal advice.
Sources
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A motor vehicle liability policy must provide at least $25,000 for property damage in one accident. - https://www.akleg.gov/basis/statutes.asp#28.22.101
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Avery V. State Farm Mutual Automobile Insurance Company (2001) - https://play.google.com/store/books/details?id=IqmdYTKyGckC
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Alaska Administrative Code, 3 AAC 26.070(a)(2) - https://www.akleg.gov/basis/aac.asp?title=3&part=2&chapter=26§ion=070