Disputing a Repair-or-Total Decision on Aftermarket Vehicle Damage

Attorney Answer

An insurer does not get to decide by feel whether to repair a car or total it. California's claims regulations set the standards and require it to show its work in writing.

You are a third-party claimant — you are dealing with the other driver's insurer, not your own — and that matters, because parts of the claims regulations reach only first-party claims. The valuation standards do reach you. Under Cal. Code Regs. tit. 10, § 2695.8(b)(6), subdivision (b) applies to the evaluation of third-party automobile total loss claims.

If the car is valued as a total loss, § 2695.8(b)(2) defines a comparable automobile as one of like kind and quality, by the same manufacturer, of the same or newer model year and model type, of a similar body type, with options and mileage similar to yours. Any adjustment from the cost of a comparable automobile must be discernible, measurable, itemized and specified as well as appropriate in dollar amount, and documented in the claim file; deductions that cannot be supported shall not be used. Under § 2695.8(b)(4), the cost must be fully itemized and explained in writing for the claimant at the time the settlement offer is made.

If the car is repaired instead, § 2695.8(f) requires the insurer to supply you with a copy of the written estimate the settlement rests on, and requires that estimate to be of an amount that will allow repairs to be made in accordance with accepted trade standards for good and workmanlike automotive repairs. If you produce a written estimate showing the necessary repairs cost more, the insurer must do one of three things: pay the difference, promptly name at least one repair shop that will make the repairs for the amount of its own estimate, or reasonably adjust your shop's estimate and identify the specific adjustment made to each item and the cost of each adjustment.

Two decisions frame this dispute, and one of them cuts against you. In Klem v. Access Insurance Company, the court treated whether a vehicle is uneconomical to repair as an objective comparison of repair cost against value rather than the insurer's unilateral say-so — which also means that if the documented repair estimate really is below the documented value, the insurer is not required to total the car because you would prefer that result. In Hibbs v. Allstate Insurance Company, the court recognized that an insurer may elect to repair rather than pay value, while holding that unauthorized repairs combined with a subrogation that prejudices the claimant can support a bad-faith claim.

Your worry about an excuse has its own rule. Under Cal. Code Regs. tit. 10, § 2695.7(d), an insurer must conduct and diligently pursue a thorough, fair and objective investigation. Under § 2695.7(b), it has 40 calendar days after proof of claim to accept or deny in whole or in part, with written more-time notices every 30 calendar days under § 2695.7(c)(1). An insurer that disputes damages on a third-party claim must do so in writing under § 2695.7(b)(1), and § 2695.7(g) prohibits a settlement offer that is unreasonably low.

What you can do

1. Put every request in writing and date it. Ask for the total-loss valuation report with each comparable vehicle identified and every adjustment itemized, and for the insurer's written repair estimate.

2. Ask, in writing, for the insurer's position on the suspension and the aftermarket wheel, with its reasons stated.

3. Get your own written estimate from a shop of your choice covering the aftermarket wheel and the suspension, with the shop explaining in writing why that damage is accident-related.

4. If your estimate is higher, hold the insurer to the three options in Cal. Code Regs. tit. 10, § 2695.8(f), and say so in your letter.

5. File a complaint with the California Department of Insurance if the answers stop coming; under Cal. Code Regs. tit. 10, § 2695.5(a), a licensee has 21 calendar days to furnish the Department a complete written response.

6. Ask a local attorney to review the valuation report and the two estimates side by side. Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts with someone who handles these cases in your area is worth more than any general guidance, including this page.

⏱ Time limits apply. A claim for damage to the vehicle generally runs on Cal. Code Civ. Proc. § 338(c)(1)'s three years for injuring goods or chattels. If you were also injured, Cal. Code Civ. Proc. § 335.1's two-year period for personal injury is shorter and governs that part of the claim. When each period started depends on your facts. Have a local attorney confirm the dates rather than counting from this page.