Should you repair or replace your car after an accident? | Mullen & Mullen Law Firm

Shane Mullen, a Dallas personal injury attorney, explains scenarios about the insurance company and repairing or replacing your vehicle after an accident.

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Video Transcript:

Should I Repair or Replace My Vehicle After an Accident? What About Diminished Value?

After an accident, you’re entitled to either have your car repaired or replaced. Unfortunately though, this decision is up to the insurance company.

If they choose to repair your vehicle, and they do so up to par with industry standards, then that's what you're entitled to and that's all their obligated to do.

However, if you're in that scenario, you’re entitled to diminish value damages. Because now your car is wrecked, it's worth less money because of that.

You have to hire an expert to prove up diminished value damages. If your car sustained serious damage, most of the time insurance companies are going to elect to total out your car.

That means they owe fair market value of your vehicle, not Kelly's blue book value, not NADA value, but fair market value.

If you owe more on your vehicle than your vehicle’s worth, then you’re upside down, there's a gap. Texas offers gap insurance. That's usually done when you’re financing your vehicle.

If you don't have gap insurance and you’re upside down, I’ve been able to work with clients and find a couple creative options for them where they’re still able to get in another vehicle and then pay-off the amount they’re upside down later, by getting another vehicle, putting the negative debt into the new financing for the new vehicle, and then when their personal injury case settles, they'll take and pay down that negative equity out of some or all of their personal injury proceeds, and then refinance the vehicle back to a normal car payment.

[KevinP]

what the heck is industry standard? thought they are supposed to fix the car back to pre loss condition based on the O.E.M. recommendations especially on newer cars.