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Is hitting a fire hydrant covered by car insurance?

Question: My wife thought she put the car in park, but it rolled down a hill and hit a fire hydrant. We have full coverage with a $500 deductible, and they totaled the car. They are saying I have $5,000 in damage, and now it's a total loss. What would make them total the car? Will my rates go up, and is the hydrant's damage covered?

Answer: It's good that you had full coverage on your vehicle because that allows it to be covered for this unfortunate incident under your collision coverage.

There are various reasons that make an auto insurance company total out a vehicle. One leading reason is that the damage cannot be repaired. Another main reason that cars are totaled out is because the cost to fix it is not economical to the car insurance company.

It may be the cost alone to repair the car is equal or more to its actual cash value (ACV). Or it could be that the repair costs, plus other benefits you have as part of your car insurance policy such as towing and storage, rental car reimbursement, etc., make it more economical for your auto insurer to total out the car then to pay to fix it.

Some insurance companies will total out a vehicle when the repair and miscellaneous costs are 50 percent or more of its ACV, while others wait till it's 80 percent or more of the ACV. State laws may also regulate the threshold for a total loss. (See “How the recession totaled your car”).

So, if repair costs to your vehicle are $5,000 and say its value is only $6,000, then your insurer has decided that it’s not worth it to repair the vehicle, but instead to settle with you for the car's ACV, the worth of your vehicle the moment before the accident occurred.

Your claims adjuster should be able to tell you exactly why they totaled out your car. Keep in mind that your $500 deductible amount is taken off the settlement amount for your vehicle. So, if it’s worth $6,000, you'd receive $5,500.

While collision coverage takes care of your car's damages, it's your property damage liability coverage that will fix the fire hydrant that your car hit.

Whoever owns the hydrant (typically the city), will normally bill you for the cost of repairs and possibly even any water loss. The costs we have seen for this type of damage can be anywhere from $1,000 to over $6,000, so good thing you have your car insurance to pick up the tab.

As for your car insurance rates, yes, they may rise. Though it was an accident, it was your wife's fault and so your auto insurer will be paying out claims for the damages she caused. This usually means your rates can go up. By how much depends upon the rating system of your car insurance company, which your agent may be able to tell you about when you call about the claim.

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