Is it a state law thatif you are hit by an under-insured driver, what is the law regrading getting paid for your vehicle’s replacement value?

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Is it a state law thatif you are hit by an under-insured driver, what is the law regrading getting paid for your vehicle’s replacement value?

Recently, I was hit from behind by another vehicle that was hit from behind first. The person that started accident was drunk driving and both vehicles incurred alot of damage. My vehicle wasn’t a total loss, but I know that when you are in an accident the value of your vehicle goes down. Another lady who works for an insurance company informed me that according to state law, if you are hit by an underinsured driver, the insurance is required to pay the difference of your vehicle in comparison to the exact same vehicle which has not been in an accident. I wanted to know if this is true?

Asked on September 9, 2010 under Accident Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

With autu insurance, you are entitled to either  the repair cost or the then-value of the car (immediately prior to accident, given make, model, age, mileage, etc.) if the car was a loss. You are not entitled to both repair and an extra amount to reflect a dimunition in value. So yes, any car, once hit, is worth less in theory, even if fully repaired. In that sense, if the car would have been worth, say, $12,000 and is now saleable for $11,000, even after repairs, the owner has experienced a loss. That loss is not compensible; the insurer's duty is to repair or to pay the value if the car can't be economically repaired; it is not actually to put the insured in as good a position as if there had been no accident.

An insurance company could have a more general policy if it choose; you should read your actual insurance policy. But the general rule is as the above.


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