Does The Amount Of Damage To My Car Effect The Value Of My Personal Injury Case?
It absolutely does. The insurance industry's approach to cases in which the property damage is less than $1000 is explored in other guides. For the purposes of this discussion, note that a low property damage number may mean the insurance company will refuse to pay you anything at all. Several years ago, 70 of the nations largest insurance companies began to use a program called "Colossus" [or an analog e.g. Claimsearch] to determine the amounts they would pay to a victim of negligence. These programs incorporate property damage estimates into the formula to evaluate the value of the case. Lower property damage estimates lead to lower overall valuation of the claim. The insurance company logic here is that if the car wasn't damaged significantly, the occupants were not hurt, or not seriously hurt.
The hard reality is that there is no scientific or medical evidence that supports the contention that one cannot sustain a significant personal injury where the vehicle in which they were riding did not sustain a significant amount of property damage.
There is no scientific evidence finding a correlation between high property damage and the seriousness of an injury, either. But the insurance industry employs dedicated, skilled advocates, to argue their cases in court, and these attorneys have been quite successful in convincing jurors that someone just can't get hurt where there is not a lot of visible property damage, or the repair estimate does not add up to a lot of money.
Here is where it gets interesting. Those same insurance companies that are going to pay you less money if you have low property damage, are the ones that are determining how much your property damage is. At least one major insurance company has purchased and directly owns auto repair facilities. "The Allstate Corporation said yesterday that it had acquired Sterling Collision Centers for an undisclosed amount, making it the first major auto insurer to move into the car repair market....Sterling, which operates 39 car repair shops in seven states and has about $100 million in annual revenue." New York Times, May 9, 2001. Other major insurers have contractual relations with a network of "authorized providers" or "preferred providers". These are auto repair facilities that derive income from, and in some cases are paid incentives for, participating in the insurer's "network" of repair facilities. And these auto repair facilities determine what the amount of the property damage.
-This Legal Guideline was updated by Eric Kirk on 2/25/19.