Expert: Richard Hixenbaugh - 8/25/2009

Question
We live in Michigan and my son was involved in a car accident while running an errand for his employer.  He was not cited for it and the officer handling the situation said the insurance company would probably waive the deductible ($500.00)because of that.  My husband and son checked online to see what the value of the car, a 1996 4 door Pontiac Grand Prix was and decided that the damage to the car vs. it's worth ($1500.00)would probably be greater.  My question is this...my husband feels that because he would not have been in the accident if he hadn't been running an errand for work that he should be compensated through his employer over and above the $1500.00.  His point would be that the kid has made $1300.00 worth of repairs to the vehicle in the past 5 months only to have it basically totaled just a few months later.  The cost of a reliable safe get-to-work-&-school car will undoubtedly surpass the payoff from the insurance company which means my son will have to suffer the misfortune of unanticipated car payments for some time.  Are we in line with expecting his employer to compensate him within reason for the purchase of anther vehicle?

Answer
Hi Gina,

Unfortunately, your son will not be entitled to anything from his employer. Regardles of the fact that he was doing a work related errand, it was someone elses negligence that caused the accident. Also, Michigan is a no-fault state. This means that regardless of who is at fault, everybody goes to their own insurance company to get their vehicle repaired or payment if it is totaled. In addition, in most states a persons recovery is limited to the fair market value of the vehicle that they owned, not the cost of replacement.

I'm sorry to say that your son will only be able to collect from his insurance company the actual value of his car.

I hope this helps
Richard Hixenbaugh