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No one likes to get in a car accident, and for some, dealing with the insurance company can be as stressful as the crash itself.

You may think that if you have collision insurance your car will automatically be repaired after an accident, but that's not the case. Insurance companies will determine what your car is valued at and if they feel the car is worth less than the cost of the repairs they would rather write you a cheque and write the car off.

Car values have been dropping over the past few years and many vehicles that are even a few years old can be worth half of what they were new. In the case of Ann Dubose who contacted Â鶹´«Ã½, her 2003 Dodge Neon SX was purchased new 7 years ago for $22,000 dollars. Following a crash her insurance company offered her $3,550 for the car. In photos the collision damage doesn't look very severe and she feels the car can and should be repaired. Dubose asked "Have they changed the definition of what a write off is these days?"

Economical Insurance Group told Â鶹´«Ã½ while the car may look fine from the outside they say it requires a new hood, fenders, radiator and air conditioning parts. They set the value of the car at $3,550 and the cost to repair it at almost $4,000. Katherine Kipper of Economical Insurance Group told Â鶹´«Ã½ "We need to ensure that the cars that we repair are safe to drive. To ensure that this car is safe to drive we would have to spend more to repair it than the actual cash value."

At the time of our story Ann Dubuse refused to accept her insurance company's offer. Below are some of the options available to her and other Canadians who may be in a similar situation with their insurance company.

• If you have collision coverage, your insurance company will pay for the repair or replacement of your car (including equipment but not contents), or pay you the actual cash value of your car in the condition it was in immediately before it was damaged
• If the estimated repair cost plus the salvage value of the damaged vehicle exceeds the cash value of the vehicle before it was damaged, the insurer may decide to treat the vehicle as a write-off instead of paying to repair it
• The insurer will pay you the pre-collision value of the car, minus your deductible, and keep the salvage
• Market value or actual cash value is what your vehicle could have reasonably sold for the day before the claim. Mileage, condition of the vehicle, equipment and retail selling price are all considered in determining the amount to be paid on the claim

Options for Dispute Resolution

Insurance Company: If you disagree with the cash offer, go back to your claims representative and discuss the matter. Advise him or her of the information you have gathered and ask how the amount was determined by the company. If there is still disagreement, discuss the matter with your insurance representative.

Arbitration: Arbitration is an option should the policyholder and insurance company disagree on a settlement figure. Arbitration is when a neutral, third party is brought in to settle a dispute, rather than having the dispute settled in court through litigation. Binding arbitration means that a final decision in arbitration is binding (or final) on both parties, and may not then be taken to court if one party does not agree with the outcome.

OmbudService: In the case of home, automobile, and business insurance, you can also contact the General Insurance OmbudService (GIO). This service is available free of charge, in both English and French, to any policyholder in Canada.

www.giocanada.org

Small Claims Court: This option may make sense for resolving disputes if your damages involve a relatively small amount. In Small Claims Courts, you can also generally sue without using the services of a lawyer. All Small Claims Courts, however, have a maximum amount for which you can sue, and this amount can differ depending on jurisdiction.

Lawsuit: You may consider filing a lawsuit if you're not getting anywhere with the insurance adjuster or the claim is more than the maximum limit in small claims court. However, this may also be a costlier option.

Determining the Actual Cash Value of a Car: Market value or actual cash value is what your vehicle could have reasonably sold for the day before the claim. Normally, insurance companies determine actual cash value by using a specialized software program or consulting a used-car valuation book, such as the "Canadian Automobile Red Book." If your car has very high mileage, or its body is rusting, you would be offered less than if it had lower-than-average mileage or special body work, like rust-proofing or a new paint job. That's why it's helpful to keep your car's maintenance records, as these can contribute to the proof of value.

Pat Foran