Personal Injury Law

Car, Motorcycle, and Other Motor Vehicle Insurance; Comprehensive and Collision Coverage

By Norman Gregory Fernandez, Esq.

Comprehensive and Collision coverage on your car, motorcycle, or other motor vehicle will cover the damage to your car, motorcycle, or other motor vehicle if you are in an accident that is your fault up to the “Fair Market Value,” of your vehicle. It will also cover your vehicle up to Fair Market Value if it is stolen.

Some Comprehensive and Collision coverage’s will cover damage to your car, motorcycle, or other motor vehicle even if the accident was not your fault.

If the cost of repairing your vehicle exceeds the Fair Markey Value of your vehicle, than the insurance company will consider your car, motorcycle, or other motor vehicle to be a “total loss,” and only pay you Fair Market Value for your car, motorcycle, or other motor vehicle.

Now what is Fair Market Value? Fair Market Value is the amount of money that your vehicle is actually worth on the street. Many people confuse this issue. You may have paid $20,000.00 for your car, motorcycle, or other motor vehicle, and you may owe $15,000.00 on you car, motorcycle, or other motor vehicle, however, once you drive the car, motorcycle, or other motor vehicle off of the dealers lot, it automatically decreases in value. Although you have paid the above amount for your car, motorcycle, or other motor vehicle, and you may owe the above amount for your car, motorcycle, or other motor vehicle, the Fair Market Value of you car, motorcycle, or other motor vehicle may only be $10,000.00!

Insurance companies value your car, motorcycle, or other motor vehicle on many factors which include but are not limited to: Year, Make, Model, Mileage, Condition, what identical or similar car, motorcycle, or other motor vehicles are selling for in your area, etc.

Many times people find out the hard way when their car, motorcycle, or other motor vehicle is totaled or the repair cost exceed the Fair Market Value of the car, motorcycle, or other motor vehicle, that the amount you receive from the insurance company is way below the amount owed on the car, motorcycle, or other motor vehicle. In today’s market where new new vehicle’s average $25,000.00 or more this situation is not uncommon, especially when the cost of repairing simple fender and paint damage may exceed $5,000.00.

I recommend that you always purchase Comprehensive and Collision Insurance. Without this type of coverage, you will get nothing for your property damage if the accident is your fault, and/or you will be at the mercy of the other drivers insurance company if you are not at fault. Check with your insurance company and read your policy for any limitations of coverage.

By Norman Gregory Fernandez, Esq. , Copyright 2006

Full post as published by California Personal Injury Law Blog on July 25, 2007 (boomark / email).