AUTO INSURANCE TOTAL LOSS CLAIM TIPS FOR THE CONSUMER

TOTAL LOSS:

Under Alabama law when the cost of repair for a vehicle is 75% or more of its fair retail value the vehicle is deemed a total loss. [ Ala Code Sec. 32-8-87(d)].  In such a situation the insurance carrier buys the vehicle from the claimant for the fair retail value of the vehicle, not the replacement value, and then applies to the State’s department of motor vehicles for a Salvage Title.
    In a total loss situation some claimants find themselves owing more on the car than the fair retail value of the vehicle. This means they may still owe money on a car that they no longer have or can use.  Again, the insurance company for the at -fault driver is not responsible for money owed on a vehicle in excess  of  its  fair retail  value.  If  you  think  you  might  be  in  this  situation,  then immediately check  with  the bank or  finance  company  that  provided  the  car  loan  to  see  if  you purchased  GAP  Insurance  when  you  financed  the  vehicle.  GAP  Insurance  pays  the  difference between the fair retail value and the balance owed on the vehicle. The finance company can provide you with information and claim material for this type of claim.

CONSUMER TIP #1:

If you think the adjuster’s valuation of your vehicle is low, ask the adjuster to provide you with the valuation report. Most reputable insurance companies will allow their adjusters to provide a copy of this report to claimants [typically, referred to as a CCC Valuation Report].  Review the valuation report to make sure information about  your vehicle was correctly  entered.  Mistakes in details such as mileage, options, transmission type, and/or engine size can make a difference in the reported fair retail value of your vehicle

CONSUMER TIP #2:

GAP Insurance should be purchased if there is little or no equity in the vehicle; however, check with the dealer and/or finance company to make sure you can drop the GAP coverage once the equity and fair  retail value of the vehicle equals or exceeds the finance price. In other words once the “GAP” is gone there is no longer a need for GAP Insurance.

Additional Questions?

Boteler, Finley & Wolfe
www.bfw-lawyers.com

251-433-7766
550 Dauphin Street, Suite 505
Mobile, AL 36606

WHAT IS THE "GUEST STATUTE"  IN ALABAMA?

Alabama law makes a distinction between a “passenger” and a “guest.” This distinction becomes important if someone is injured or killed in an accident while riding in an automobile and the accident is the fault of the driver of the car occupied by the victim. Section 32-1-2 of the Alabama Code states: “The owner, operator or person responsible for the operation of a motor vehicle shall not be held liable for loss or damage arising from injuries to or death of a guest while being transported without payment therefor in or upon said motor vehicle, resulting from the operation thereof, unless such injury or death is caused by the willful or wanton misconduct of such operator, owner or person responsible for the operation of said motor vehicle.” Simply put, in Alabama a guest in a motor vehicle cannot recover against the owner and/or operator for damages suffered by the guest as a result of the operator’s negligence.

 Alabama law defines the term “guest” as one who is invited to enjoy the hospitality of a driver of an automobile only for his or her (the rider’s) benefit without making any payment or conferring any material or tangible benefit upon the driver. APJI 26.05. A passenger can recover from the owner and/or operator for the damages suffered as a result of the operator’s negligence. Alabama law defines a “passenger” as one who is carried in a vehicle for hire or reward or for the material benefit,present or anticipated, of either the driver or of both the driver and rider, which benefit arises out of the transportation provided. APJI 26.04. Alabama law recognizes two situations wherein a “guest” may become a “passenger” and thereby allowed to recover from the owner and/or operator for damages suffered as a result of the operator’s negligence:
 1. “A misrepresentation by the driver or another which induces one to become a rider in the automobile causes the rider to be a passenger and not a guest.” APJI 26.25.
2. Also, a guest’s protest against the operator’s driving can change the guest status to that of a passenger. APJI 26.26.

It is important to remember that the guest statute only prohibits a victim’s right of recovery from the owner and/ or operator for “negligence” of the operator. A victim can recover if the operator’s conduct was wanton and or willful or if the accident is caused by someone other than the owner. On this point, potential claims under Dram Shop or Product Liability theories should not be overlooked.

For More Information Contact:

Boteler, Finley& Wolfe
www.bfw-lawyers.com

3290 Dauphin Street, Ste. 505
Mobile, AL 36606
251-433-7766