In Ohio, the value of a car accident property damage claim is the difference between the fair market value of the vehicle immediately before the accident minus the the vehicle’s value in its damaged condition.
It stands to reason that, the fair market value of a damaged car is its value before the accident minus the amount of money it would take to repair it, as long as the repairs could restore the car to its pre-accident condition. So, Ohio law allows an alternative “cost of repair” method of determining the value of a car accident property value claim. The cost of repairs includes not only the amount charged by the auto repair shop, but the cost of a rental vehicle while the repairs take place.
For those interested in seeing how car damage claims play out in court, this Ohio Court of Appeals decision explains these ideas pretty well.
The at-fault driver or his insurance company never has to pay more than the pre-accident fair market value to repair the car. If repairs would cost more than the fair market value, the car is considered a total loss. In that case, the car accident property damage claim is worth the car’s pre-crash value minus its salvage value. Most insurance companies will offer to pay the full fair market value and take title of the damaged car to sell for scrap.
In some cases, this may seem unfair. A person whose new car is damaged soon after purchasing it may owe more on the auto loan than the car’s fair market value. Unfortunately, there is little that can be done about that. Your car financing arrangement is not relevant in determining the amount you are owed for your car accident property damage claim.