What is auto "collision" coverage? It is basically "property damage coverage" for your car when you get into a collision. Some people think they don't need it, especially if their car is older which is just bad logic. You always need it to protect you from losing money on your car damage in any type of injury case. Here are the three main reasons why:
Reason Number One:
Let's say the at-fault party's insurance decides to dispute fault and say they are not 100% at-fault, and worse, they say your are 25% or 50% at fault. If you don't have collision coverage under your own auto policy you will be at the mercy of their determination of fault, and thereby the value they owe for your car damage. In this example, the at-fault carrier would deduct your repair bill by 25% or even 50% which is just an awful position to be in. You are losing money right away, and could have saved it had you invested in collision coverage under your own auto insurance.
Reason Number Two:
Let's say the at-fault party does the right thing and accepts 100% fault for your car collision claim. They make this determination after about two weeks after they review the traffic collision report. But, at the time of the collision, your car was towed to a tow yard. You are thinking, "no problemo, I am not at fault, they now admit it after two weeks, and they will pay me for my car damage 100%."
Not so fast. Because you did not have collision coverage under your own policy, you did nothing and let the tow yard keep your car for those two weeks while the traffic collision report was being obtained by everyone. Now, you have a $2,500.00 tow yard bill, and the at-fault party is not legally obligated to pay for the tow yard fees because you had a "duty to mitigate" your damages. This means you had a responsibility to not acrue additional charges in regards to your property damage just to dump later on the at-fault party. You had a duty to mitigate this per California law.
For example, if you had collision coverage, your own insurance company could have taken possession of your wrecked car while the traffic collision report was being obtained and liability was being investigated. Because you did not have collision coverage, it become your personal obligation to take possession of your wrecked car while this all was being done. Since you did not do that, and you had no collision coverage, that expensive tow yard bill is on you even though you are not at fault for the collision!
Reason Number Three:
Let's say the at-fault party accepts 100% fault for your car collisoin right away, but guess what? Their insured only had the California state minimal limits of property damage coverage which is only $3,500.00, but your car is totaled and the fair market value of your car is $10,000.00. Guess what? You will not be able to recoup that lost $6,500.00 from any insurance source! Not a good situation to be in.
Now, you might be thinking, "Mark, this is all well and good, but I still have a right to sue anybody for any financial loss on my car that I am not responsible for." Well, statistically speaking, people who only have California state minimal limits of property damage coverage up to $3,500.00 generally do not have any assets to go after any way. We lawyers call that being "judgment proof." You would have to sue them in court, obtain what may become a "meaningless judgment," and then hire another company or lawyer to enforce your judgment against a judgment proof defendant. It does not sound like a lot of fun, not to mention, a big waste of time, and money.
All that could have been easily prevented by having collision coverage which, if you do the math, does not cost that much in the long run! If you have questions about your particular situation, please do not hesitate to call me at 619.813.7955. I take calls like this all the time, and I would be happy to help you if I can. Stay strong, Attorney Mark Blane