Automobile damage by fire can be covered under your collision insurance, your uninsured or underinsured motorist property damage coverage or the other driver's liability coverage if the fire is a result of an accident; otherwise it may be a comprehensive claim. Some states have a fire and theft coverage as well as a physical damage policy that covers your vehicle if you elect to pay for the additional coverage. In all situations except the other driver's liability, you must have coverage in addition to liability on your vehicle to pay the claim.
Blue Book Value
Your insurance policy defines the terms for your coverage, and it probably covers "repairs" for damage. If your car is a total loss, or if the insurer decides it is not economical to make repairs, you receive actual cash value. Insurance adjusters base loss calculations for a total loss by fire on blue book value, determined from Kelley Blue Book at kbb.com or at Edmunds.com.
Adjusters submit the actual cash value of the loss, but your insurance policy covers only to policy limits. The insurance policy for the other driver is equally restricted to policy limits. Most states have a property damage liability limit that is the third number on the liability coverage. A policy written for 30/60/25 has $30,000 for an individual, $60,000 for an accident and $25,000 in property damage. If the other driver has insurance, he probably has sufficient property damage coverage for your vehicle. If you are hit by an uninsured motorist, your uninsured motorist property damage may pay your claim.
Your insurer pays only actual cash value. Any amount paid includes reductions for depreciation including mileage, year model and accessories. The insurer subtracts the deductible if the claim is for collision or comprehensive. A claim under your underinsured motorist property damage does not include a deductible. If the insurer determines the cause of the fire was from a collision that was the other driver's fault, you pay no deductible because payment comes from the liability insurance of the other driver. States often regulate the terms included in automobile insurance policies written in the state.
The insurance company makes no attempt to cover your replacement cost of a vehicle. You only receive the actual cash value of the vehicle, and the insurer takes the car. It receives salvage value to offset the payment of the claim so the actual amount the insurer pays out is significantly less than it appears to be. Insurers and adjusters look for fraud in automobile fire claims. Arson and vandalism are comprehensive insurance coverages, but if the insured caused the damage, the insurer does not cover the loss.
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