Property Damage Law in North Carolina
Persons in automobile accidents in North Carolina typically sustain damage to their vehicle. Although less common, other types of property can be damaged, such as a house, a transformer, a pet, a computer etc. When this occurs and another person is at fault, one must determine the damages to which the injured person is entitled.
In the context of an automobile accident, those persons with damage to their vehicle might have “collision” coverage, which will provide coverage for the loss, subject to a deductible. Collision coverage is optional, and not mandatory, and therefore everyone does not have this type of coverage. The scope of this coverage is determined by the terms of the insurance policy, but such a policy typically provides that the insurer will pay for the cost to repair the vehicle, up to seventy-five percent (75%) of the value of the car. A regulation provides:
When a motor vehicle is damaged in an amount which, inclusive of original and supplemental claims, equals or exceeds 75 percent of the preaccident actual cash value, as such value is determined in accordance with this Rule, an insurance carrier shall “total loss” the automobile by paying the claimant the preaccident value, and in return, receiving possession of the legal title of the salvage of said automobile. 11 N.C.A.C. 4.0418(5).
The claimant has a right to retain title to the vehicle, but the insurer essentially receives a credit for the salvage value of the vehicle. There are also other provisions regarding determining the value of the vehicle,1 and payment for storage of the vehicle.2
If the other motorist was at fault, then the claimant should ultimately be reimbursed for the deductible.
The owner’s own policy, in addition to covering the property damage under collision coverage, might cover the cost of a rental vehicle.
If the owner of the damaged vehicle does not have collision, then the only other recourse is to pursue a “liability” claim against the other driver. (If the other driver does not have insurance, then the owner of the damaged car might have uninsured motorist coverage to cover the loss.) Such a claim is available only if the other driver was at fault, and the owner pursuing the claim was not at fault. (If the owner is at fault, then his own contributory negligence will prevent him from having a valid claim.)
In this type of claim (i.e. a liability claim against the other driver’s insurance company), the traditional measure of damages for property damage is the diminution in the value of the vehicle as a result of the collision. Thus, if the vehicle was worth $5,000 prior to the accident, and it is worth $3,000 in salvage value after the accident, then the damages are $2,000. The important issue here is that the cost to repair the vehicle could be, e.g., $4,000 — but this is not the true measure of damage. It should be noted, however, that such claims are often based on the cost of repair, and there is some limited legal authority indicating that the cost of repair is an appropriate measure of damages (as long as it does not exceed the value of the vehicle).
In addition to this claim, the liability carrier is responsible for the cost of a rental vehicle for a reasonable period of time. Further, the carrier can also be liable for “loss of use” of the vehicle. Thus, if the damaged vehicle was a dump truck or a taxicab, then the owner would likely have a claim for loss of use of the vehicle. The duration of this claim depends on whether a replacement vehicle is available, and on the length of time to repair the damaged vehicle. (John Kirby has litigated three claims for property damage to verdict in North Carolina. In two of these, he represented the plaintiff in the action and the bulk of the jury verdict was for loss of use of the vehicle. In one case, the jury awarded approximately $50,000 for loss of use alone. This or similar results cannot be guaranteed in other cases. Further disclaimers as to results are available on this site.)
Other types of property can become damaged in an accident. The general rule for the recovery of damages in these other cases is similar to the rule for automobiles. The injured party can recover the diminution in value of the item, plus any “consequential” losses (such as lost profits). The full scope of damages is discussed in greater detail in another Article in this site.
1. The regulation states, “If the insurer and the claimant are initially unable to reach an agreement as to the value of the vehicle, the insurer shall base any further settlement offer not only on published regional average values of similar vehicles, but also on the value of the vehicle in the local market. Local market value shall be determined by using either the local market price of a comparable vehicle or, if no comparable vehicle can be found, quotations from at least two qualified dealers within the local market area. Additionally, if the claimant represents that the vehicle actually owned by him was in better than average condition, the insurer shall give due consideration to the condition of the claimant’s vehicle prior to the accident.”
2.”The insurer shall be responsible for all reasonable towing and storage charges until three days after the owner and storage facility are notified in writing that the insurer will no longer reimburse the owner or storage facility for storage charges. Notification to the owner shall include the name, address, and telephone number of the facility where the vehicle is being stored. Notification to the storage facility shall include the name, address, and, if available, telephone number of the owner. No insurer shall abandon the salvage of a motor vehicle to a towing or storage service without the consent of the service involved. In instances where the towing and storage charges are paid to the owner, the check or draft for the amount of such service shall be payable jointly to the owner and the towing or storage service. ”