Source of Coverage—Which Insurer Owes?


If the collision was not your fault and your vehicle is damaged, you have three potential sources of coverage for vehicle repair or replacement: liability insurance, uninsured motorist coverage, and collision coverage. If the at-fault driver had insurance when the accident occurred, the liability policy covering the vehicle and driver who caused the accident will provide payment for vehicle repair or replacement, towing charges, storage charges, rental car expense, and diminution of value. If the at-fault driver did not have insurance, you turn to your uninsured motorist policy for coverage. This coverage is subject to a $100.00 deductible, which is far less than the typical collision deductible. If the at-fault driver’s liability insurance carrier is slow to accept fault or difficult to deal with, you always have the third coverage option, which allows you to collect for vehicle damage claims through your collision policy.

Collision is optional coverage in North Carolina. Thus, to secure payment, you must confirm that there is collision coverage for the vehicle involved. Collision coverage is also subject to a deductible. Your deductible is the uninsured portion of the vehicle damage claim, which you pay first, and then insurance pays all damage claims that exceed the amount of your deductible.

If fault is clear and injuries are relatively minor, you should allow the at-fault driver’s liability coverage to pay all vehicle damage claims. However, in cases involving disputed liability or serious injury, you should handle vehicle damage claims under your own collision policy. This allows you to avoid immediate dealings with the liability insurance company that will defend the at-fault driver and oppose your injury claims. In some cases, your collision carrier will even agree to waive the deductible and pay the full cost of repairs/replacement. Even if a deductible applies, this is a small investment to protect your rights and your privacy.

Collision coverage is no-fault coverage. The mere occurrence of a collision resulting in vehicle damage triggers coverage, regardless of who caused the accident. If the accident was not your fault, use of collision coverage would not result in policy cancellation or cause any increase in your premiums. Further, as soon as all vehicle damage claims are paid, your collision insurance carrier will immediately secure reimbursement through a legal claim called subrogation. Through this process, your insurance company will approach the at-fault driver’s liability insurance carrier on your behalf to recoup their claims payout and your deductible.

As a former insurance adjuster, I can assure you that insurance carriers use property damage claims to earn your trust. Don’t take the bait. Their hands are legally tied, and they are required to tender fair payment for all property damage claims. While some cases can be difficult, most property damage claims do not involve dispute. Please understand that insurance carriers pay full and fair value for property loss because they are legally required to do so. They then use the process to build trust so they can later control the injury claim. They often also seize the opportunity during property damage dealings to initiate injury discussions to gather evidence that can later be used to diminish or oppose your injury claims. Be very careful in all property damage discussions, and limit those adjuster conversations purely to property loss matters.

If the accident was your fault, collision coverage is the only source of payment for towing, storage, and vehicle repair/replacement cost. If you loaned your vehicle to another friend who caused the accident while driving your vehicle, collision remains the only source of coverage. If you did not purchase this coverage, you have no right to payment for your damaged car.

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