Is my insurance company giving me a fair price for my damaged vehicle?

For many New Brunswickers, our vehicle is one of our most valuable possessions.  Unfortunately, vehicles sometimes sustain damage from incidents such as collisions, vandalism, or storms.  When our vehicle is damaged, what are we entitled to from our insurance company?

Every automobile insurance policy in New Brunswick compensates the owner for damages to the vehicle, its contents and for loss of use, in a few limited circumstances.[1]  However, most New Brunswickers purchase additional optional insurance coverage to protect their vehicle against a wider range of perils, including situations where the owner is at fault for damaging the vehicle.[2] 

When a vehicle is damaged by an insured peril, the insurance company can repair the vehicle using material of like kind and quality.  However, if the cost of repairs is greater than the “actual cash value” of the vehicle at the time the loss or damage occurs, then the insurance company can pay the owner the “actual cash value” instead.  The “actual cash value” of a vehicle is the fair market value of the vehicle, which factors in depreciation.  When this occurs, the insurance company may tell the owner that the vehicle is a “total loss” or a “write off”. 

What can you do when the insurance company offers to pay you an amount for the “actual cash value” of your vehicle that you believe is unfair?  What can you do if the insurance company refuses to make repairs to your vehicle that you believe are necessary? 

Many New Brunswickers wrongly believe they must accept whatever the insurance company offers them.  This is not true!  There is an appraisal process that vehicle owners can use to resolve such disagreements.[3]  Under the appraisal process, both the owner and the insurance company appoint their own appraiser.  For any disagreements between the two appraisers, they choose an umpire to decide.  If the two appraisers cannot agree on an umpire, a judge of the Court of Queen’s Bench will appoint one.  Each party pays for their own appraiser and half of the umpire’s fees.

There is also an optional insurance called “GAP” insurance.  You may be offered “GAP” insurance when purchasing a vehicle from an automobile dealership.  This product is sold when a vehicle is being financed to cover the difference between the loan values on the car and the cash value paid out by your insurance company if your car is in an accident and is written off.

Car accidents can trigger many legal issues.  If you’ve been involved in a car accident, contact Moss Hachey Law’s personal injury lawyers now!

Please be aware that there are exceptions to the rules summarized above.  This blog entry contains information of a general nature only and should not be relied on for legal advice.  The information is current only to the date of publication and may be subject to change.

[1] S. 254.1 of the Insurance Act (laws.gnb.ca/en/ShowPdf/cs/I-12.pdf)

[2] Page 9 of the Standard Automobile Policy (66001-01.q (fcnb.ca))

[3] S. 107 of the Insurance Act (laws.gnb.ca/en/ShowPdf/cs/I-12.pdf)