Help! The insurance company will not pay me enough to buy a new car!

Insurance Buy New Car

If you have just been involved in an automobile accident, then your car was likely damaged or, worse, considered a total loss. If that is the case, then you might be simultaneously dealing with the stress of trying to get physically better at the same time that you are left without reliable transportation. In the process of buying a new car, you may learn that the insurance company (your own insurance company or the at-fault driver’s insurance company) may not be offering you enough to buy a new car. As a practicing lawyer, I regularly receive telephone calls wherein the potential client is concerned about being able to get a new car after an accident. It is not uncommon for the potential client to be distressed by what they perceive to be a less than attractive property damage offer from the insurer.

Unfortunately, at least in Maryland, the insurer is often acting within its rights. There are times when a car is deemed a total loss or a salvage vehicle. An insurer will deem a car to be a total loss when the cost to repair the vehicle for legal operation on a highway exceeds 75% of the fair market value of the vehicle prior to sustaining the damage. In determining the cost to repair, an insurer may not use the cost of (i) towing, storage, or vehicle rental; or (ii) repairing cosmetic damage. If your vehicle has been completely destroyed or is a total loss, then you will be entitled to recover the fair market value of the property immediately before it was wrongfully destroyed.

Unfortunately, the “fair market value” of a vehicle does not often equate with the cost to purchase a comparable vehicle. So, for example, the fair market value of your reliable 2009 Toyota Corolla may not meet or exceed the cost to purchase a used 2009 Toyota Corolla. Under that scenario, you may feel that the property damage payment is anything but reasonable. Unfortunately, the insurance carrier may be acting well within its rights. That does not make the pain of losing one’s car any less manageable, but it does at least let you know the thought process of the insurer.

In terms of repairable damage, you are entitled to recover the reasonable cost of restoring the damaged property substantially to its condition immediately before it was damaged unless the cost of repair is more than the property’s fair market value. In those cases where the damaged property has been repaired but its fair market value nevertheless has decreased, you may also recover the difference between the fair market value of the property before the damage and after the repair. The total damages may not be greater than the amount by which the value of the property was reduced before it is repaired.

In addition, you may be entitled to recover for the loss of the use of the property during a reasonable period of time while it is being repaired. The measure of damages for loss of use is the reasonable rental value of comparable property. You will have the burden of proof of proving damage and may do so by proving either the cost of repairs or the diminution in the value of the property after the damage in order to establish a prima facie case. The party causing the damage then has the burden of showing that your evidence is not the proper measure of damages by offering evidence that the option not selected by the owner would be less expensive.

If you have been injured in a motor vehicle accident and have questions about your property damage claim, then you should immediately contact a lawyer. The lawyers at Henderson Law are available today to conduct a free, initial consultation. The lawyers at Henderson Law handle cases throughout the State of Maryland and the District of Columbia.


Henderson Law is accepting new cases in the District of Columbia and Maryland. Henderson Law is willing to take new clients across the State of Maryland, including, but not limited to, new cases arising in the following cities: Annapolis, Crofton, Bowie, Upper Marlboro, Crownsville, Davidsonville, Edgewater, Millersville, Odenton, Severna Park, and Pasadena. Please call Henderson Law for an initial consultation.