Legal Question in Insurance Law in Pennsylvania

My rights

I just bought a brand new 2004 vehicle and had it only two weeks when a tractor trailer jack-knifed and hit me. My vehicle was pretty badly damaged but not enough to be totalled. My question is, do I have to accept having my vehicle fixed or can I refuse and have the trucking company pay what I have put down and the first payment made to get me a new vehicle. The trucking company has admitted to fault. It will be at least another month before my vehicle is repaired and I have no other vehicle. Do they have to pay me for a rental vehicle or reimburse me if a buy a cheap car (rental would be at $70.00/day for 45 days - I called Enterprise)?

Asked on 12/30/03, 7:35 pm

2 Answers from Attorneys

Kevin Begley Kevin J. Begley - Attorney at Law

Re: My rights

You are entitled to be "made whole". This means to put you in the same position you were before the accident. So, how do you do that? Your car was brand new, don't let them tell you it dropped 10-20% in value as soon as it drove over the curb, that's bull-caca. There is probably case law on cars less than 1-3 months, or less than x-thousand miles, being treated as a brand new car, but I'm sure 2 weeks old = new!. In theory, they will be unable to find you a like kind replacement vehicle (that has not been crashed and repaired) because the car is too new.

I suggest the following. As far as a rental until the repairs are done, you are entitled to a "like kind vehicle" for a rental. Mustang for Mustang, Cavalier for a Corolla, Tarus for a Grand Prix, etc. The cost for the rental for 45 days will be between $1,500 (at ~$30/day + tax, etc.) to $2,400 (@ $50 +). You want to use this.

If you walked into a dealer today to get the same car, and the same payments, how much cash would you need? $2,000, 4,000, 6,000?

Even a year old car, after an accident, when it needed to be repaired, suffers from "diminished value". It is worth less than the same car without a history of crash damage.

You need to use these things to try to get you what you need to get into a new vehicle. So, first, if they settle quickly,they save $ on the rental. Second, they can take their time getting the car repaired right (some times if they take their time, they can get parts, labor is cheaper and save $). Third, you would want the deminished value for your car (if car was worth 30,000 new, how much is it worth as a repaired vehicle - $25,000... $22,000 ???). You WANT that diminished value. They will say repaired it's OK, it retaines it's value. Your position is, then YOU resell it & recoupe on their loss (if they say it will be as good as new, and worth $25,000 after repair, let them sell it for $25,000).

If you aren't comfortable handling the negotiation, have someone else do it, it WILL be worth it. Attys charge for their time. this should take 2-5 hours, or $500-1,000. Otherwise, just do it yourself!

If you don't know any attys in your area, call me, I am licensed in PA.

Good luck!

Kevin J. Begley

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Answered on 1/01/04, 7:00 pm
William Marvin Cohen, Placitella & Roth, P.C.

Re: My rights

What a bad break! It's always a drag when a new car gets its first scratch, but to have serious collision damage only two weeks in, well, really sucks.

Not that there's a good time to have such a problem. I've had more than a few clients have a car totalled when it was a year or two old. If they had financed most of the cost on a long-term deal, often the value of the car isn't even enough to payoff the loan.

Anyhow, it sounds like you're negotiating with the trucking company or its insurance carrier. They should definitely pay for loss of use, for a replacement rental. Enterprise will do those for $30/day or less. $70 is ridiculous.

You should have reported this to your own insurance company as well. If you had rental replacement coverage, that will provide a vehicle. Although typically your carrier will be happy to put the claim on hold if the other company is accepting liability.

The basic rule about damages is that the party at fault is responsible for the cost of repair if repair is reasonabl. If the repair is not reasonable, i.e., too expensive, or not possible, they are liable to replace the vehicle, but at the actual value, not replacement cost for a new item (i.e., purchase cost less depreciation).

So, even though there wasn't much depreciation after two week, you know the old saying about how a new car loses value as soon as you drive it off the lot? If the car was totalled, the company would still resist buying a new one.

It's really all a matter of what can be negotiated. One of the controversial issues is whether someone in your position can claim "loss of value," i.e., the fact that even after the most expert repairs, your vehicle's value is lessened by the fact that it's got an accident history. Pennsylvania doesn't have a clear rule about that, as far as I know. So you could try to get estimates from dealers or blue books about how the accident and repairs have taken from the value of the car and claim that in a settlement.

The reason I say this is all a matter of negotiation is that it's just not practical to sue over these kind of claims. The legal costs will exceed the amount at issue.

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Answered on 12/31/03, 8:42 am

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