• I want to consult a lawyer in the Yaizu, Yoshida, Makinohara, Fujieda, or Omaezaki area
• I was told that my repair costs would not be fully covered, even though the fault ratio is 100-0 in my favor
• The insurance company said "we can only pay up to the car's market value," and I cannot accept that
• I believe the vehicle market value presented by the insurance company is too low
• I am unsure whether to repair or replace my car

Are you troubled by issues like these in Yaizu, Makinohara, Omaezaki, Fujieda, Shimada, Yoshida Town, or surrounding areas?
Yaizu Sogo Law Office offers a free initial legal consultation regarding traffic accident concerns. There is no obligation to retain our services after the initial consultation. We are also available on weekday evenings and Saturdays. Please feel free to contact us by phone or email.

Can Repair Costs Be Denied in Full Even When You Are 0% at Fault?

Another driver's car crashed into your car while it was parked in your driveway.

Your car was completely stationary, and the fault ratio is 100% on the other party and 0% on your side.

However, when you obtained an estimate from the repair shop, the repair cost was ¥700,000, yet the other party's insurance company told you,

"The market value of this car is ¥600,000, so we can only pay up to ¥600,000."

This kind of situation does occur.

Such cases are not uncommon.

From the victim's perspective, it is only natural to feel,

• "I did nothing wrong — why should I have to pay ¥100,000 out of my own pocket?"
• "If the accident had never happened, I could have kept driving my car as usual — this is unacceptable."

Such frustration is entirely understandable.

However, when it comes to property damage in a traffic accident, even a 100-0 fault ratio does not guarantee that repair costs will be covered in full without limit.

When the repair cost exceeds the value of the car at the time of the accident, the issue of "economic total loss" arises.

That said, even if the other party's insurance company tells you "we can only pay up to the market value," you are not necessarily obligated to accept that amount as is.

There is room to negotiate the vehicle's market value and replacement-related expenses.

"Total Loss" Has Two Meanings

In traffic accident cases, "total loss" is broadly classified into two types:

• Physical total loss
• Economic total loss

These are the two categories.

⑴ Physical Total Loss

Physical total loss refers to a situation where the vehicle is so severely damaged that it is physically impossible to repair.

For example, a major accident may cause such extensive deformation of the car body that it cannot be technically restored.

⑵ Economic Total Loss

In contrast, economic total loss means that while the vehicle can technically be repaired, it is more economically rational to replace it with a comparable vehicle than to repair it.

This is the type of total loss that most frequently becomes an issue in property damage claims arising from traffic accidents.

For example,

• Repair cost: ¥700,000
• Vehicle market value at the time of the accident: ¥600,000

In this case, it may appear at first glance that "the repair cost is ¥100,000 higher, so it is an economic total loss."

However, the determination is not made on that basis alone.

When judging whether an economic total loss exists, it is necessary to consider not only the vehicle's market value but also "replacement-related expenses."

The Comparison Should Be Between Repair Costs and "Market Value + Replacement Expenses"

To determine whether an economic total loss applies, the basic comparison is between:

"Reasonable repair costs" and "vehicle market value at the time of the accident + replacement-related expenses."

These two figures are compared.

For example,

• Repair cost: ¥700,000
• Vehicle market value: ¥600,000
• Recognized replacement-related expenses: ¥120,000

Suppose these are the figures.

In this case,

The repair cost of ¥800,000 is below ¥820,000.

Therefore, simply concluding that "the repair cost of ¥800,000 exceeds the market value of ¥700,000, so it is an economic total loss and only ¥700,000 will be paid" may not be appropriate.

Accordingly, when the insurance company declares an economic total loss, it is important to verify not only "what is the market value" but also "how much is recognized for replacement-related expenses."

Our firm has handled numerous cases where the insurance company claimed total loss, but we successfully negotiated on the grounds that, when replacement-related expenses were included, it was actually a partial loss — and we recovered the full repair costs.

What is crucial in such cases is preparing objective evidence of replacement-related expenses, namely an estimate for a replacement vehicle.

You do not need to actually purchase a replacement vehicle (i.e., you do not need a "purchase order"). As long as you have a "quotation" for replacing the damaged vehicle with an equivalent one, you can negotiate persuasively with concrete figures.

What Exactly Is "Vehicle Market Value"?

Even if the insurance company tells you, "The market value of your car is ¥600,000," that ¥600,000 is not necessarily correct.

The vehicle market value in a traffic accident is generally determined by reference to the price required to acquire a similar, equivalent used car at the time of the accident.

Specifically, the following factors are considered:

• Vehicle model
• Grade
• Model year
• Mileage
• Remaining vehicle inspection period
• Condition of the vehicle
• Selling prices in the used car market

These factors are taken into account.

Insurance companies sometimes calculate the market value by referring to the so-called "Red Book" (Auto Guide Monthly Vehicle Price Report).

However, the price listed in the Red Book is not the sole and absolute market value.

If vehicles of similar model year, grade, and mileage are being sold at higher prices in the actual used car market, this can serve as a basis for challenging the insurance company's proposed amount.

If the Insurance Company's Market Value Is Too Low, Research the Used Car Market

For example, suppose the insurance company tells you, "The market value of your vehicle is ¥700,000."

However, upon checking used car sales websites, you find that vehicles with:

• The same model designation
• The same grade
• A similar model year
• Similar mileage

are being sold in large numbers at prices ranging from ¥900,000 to ¥1,000,000.

In that case,

"It is impossible to actually acquire a comparable vehicle for ¥700,000"

— and on that basis, there may be room to request that the insurance company reconsider its market value.

In such a situation, merely saying "I cannot accept ¥700,000" is not sufficient.

You should gather multiple listings of comparable used vehicles and present them objectively, comparing factors such as:

• Vehicle model
• Model designation
• Grade
• First registration date
• Mileage

It is important to explain the discrepancy with objective evidence.

Since the condition of each used car varies, presenting multiple vehicles with similar conditions is more persuasive than pointing to just one exceptionally high-priced listing.

Replacement-Related Expenses May Also Be Claimable as Damages

When the vehicle is declared an economic total loss and you are forced to replace it, you may be able to claim not only the vehicle's market value but also certain expenses incurred as a result of the replacement.

These are called "replacement-related expenses" (買替諸費用).

For example,

• Certain expenses required for vehicle registration
• Certain expenses related to the parking space certificate
• Expenses required for the scrapping procedure
• Fees for agents handling the registration process

If a causal relationship with the accident is recognized, these may be recoverable as damages.

However, not every expense involved in replacing a car is automatically recognized in full.

For instance, expenses that you would have had to bear regardless of the accident may not be recognized as damages.

Therefore, it is necessary to examine each expense individually to determine which ones are claimable as replacement-related expenses.

Even with a 100-0 Fault Ratio, Compensation That Puts You in a Better Position Than Before the Accident Is Generally Not Allowed

What victims often find difficult to understand is:

"If I am 0% at fault, why can't I be made completely whole?"

This is a very common question.

The fundamental principle of traffic accident compensation is to restore the victim to the pre-accident condition through monetary means.

For example, if a car was worth only ¥600,000 at the time of the accident, and the repair costs ¥700,000, the legal reasoning may be:

"The property value lost due to the accident is approximately ¥600,000, so the at-fault party cannot be required to bear repair costs that significantly exceed that amount."

This conclusion may be reached in certain cases.

Therefore, even when you are entirely without fault, there is an inherent limit on compensation based on the actual extent of the damage.

This is an entirely different issue from "comparative negligence," which reduces compensation because the victim shares some fault.

"A 100-0 fault ratio" and "whether the full repair cost is recoverable" must be considered separately.

What If You Want to Repair Your Car Because of Sentimental Attachment?

If you have driven a car for many years and taken good care of it, you may naturally think, "I don't want to replace it with a used car — I want to repair this car and keep driving it."

Unfortunately, however,

• "I have a personal attachment to this car,"
• "I have cherished it for many years,"
• "This car holds family memories,"

— personal sentimental reasons alone are generally not sufficient grounds to claim the full repair cost beyond the economic total loss threshold from the other party.

That said, if there are special circumstances — such as the difficulty of obtaining a comparable vehicle in the used car market — there may be room for further consideration.

For rare vehicles, classic cars, or vehicles with special specifications, it may not be possible to properly evaluate the market value.

In such cases, it will be necessary to prove the vehicle's fair value using appraisals from specialized dealers or data from the used car market.

The "Excess Property Damage Repair Cost Rider" May Be Available

The other party's optional insurance may include a rider known as the "Excess Property Damage Repair Cost Rider" (対物超過修理費用特約).

This rider covers, within certain conditions and limits, the difference when the repair cost of the damaged vehicle exceeds the legally recognized compensation amount due to an economic total loss.

For example,

• Repair cost: ¥700,000
• Legally recognized compensation: ¥600,000
• Difference: ¥100,000

In such a case, if certain conditions are met, it may be possible to receive payment for this difference from the other party's insurance.

However, this rider depends on the terms of the other party's optional insurance policy.

In addition, there may be conditions such as actually having the vehicle repaired before payment is made.

When you are told that the vehicle is an economic total loss, it is worth asking:

"Does the other party's insurance include an Excess Property Damage Repair Cost Rider?"

It is worth making this inquiry.

The Victim Can Choose Whether to Repair or Replace

Just because a vehicle is declared an economic total loss does not mean that, as a matter of law, you must scrap the car.

If the victim decides,

"I want to repair the car and keep driving it, even if I have to pay the shortfall out of my own pocket,"

then repairing the vehicle is certainly possible.

However, there is a limit on the amount of compensation that can be recovered from the at-fault party.

For example,

• Repair cost: ¥1,000,000
• Market value + replacement expenses: ¥800,000

If the vehicle is determined to be an economic total loss, and you still wish to repair it, you will generally need to bear the ¥200,000 difference yourself.

That said, if the Excess Property Damage Repair Cost Rider mentioned earlier is available, you may be able to reduce this out-of-pocket expense.

First, it is advisable to confirm the following before deciding whether to repair or replace:

• Is the vehicle truly an economic total loss?
• Is the market value accurate?
• How much are the replacement-related expenses?
• Is there an Excess Property Damage Repair Cost Rider?

We recommend making your decision after confirming these points.

What If You Cannot Buy the Same Car for ¥600,000 When Replacing It?

In economic total loss disputes,

"The insurance company said ¥600,000, but when I actually search for used cars, comparable vehicles cost close to ¥1,000,000."

Such cases do occur.

This is precisely the kind of case where the vehicle's market value should be contested.

The market value for compensation purposes is not merely a book value; what matters is the exchange value — the amount needed to acquire a vehicle equivalent to the one just before the accident.

For this reason, researching the actual used car market is important.

Do not simply match the vehicle model alone; compare factors such as:

• Grade
• Model year
• Mileage
• Drivetrain type

Match the conditions as closely as possible for comparison.

If you are not satisfied with the insurance company's proposed market value, it is also important to ask them to disclose the basis for their calculation.

What About Rental Car Expenses?

When you are unable to use your car due to the accident, you may be able to claim rental car (substitute vehicle) expenses under certain conditions.

For example, if the car is essential for commuting, work, or daily life, and no other vehicle is available.

However, there is a limit on the period during which rental car expenses are covered.

For repairable accidents, the standard is a reasonable repair period; for total loss accidents, it is a reasonable replacement period.

The fact that negotiations with the insurance company over the economic total loss have dragged on does not mean that rental car expenses will be covered indefinitely.

Therefore, if you need a car, it is important to start considering whether to repair or replace early on, and to confirm the rental car coverage period with the insurance company.

When the Vehicle Can Be Repaired, "Diminished Value" May Also Be an Issue

Even when the vehicle is repaired rather than declared a total loss, the accident may cause the car's value to decrease.

This is known as "diminished value" or "loss of value" (評価損 / 格落ち損).

For example,

• Relatively new vehicles
• Vehicles with low mileage
• Luxury vehicles
• Vehicles with significant damage to the structural frame

In such cases, even after proper repair, the accident history may reduce the vehicle's value in the used car market.

In these situations, it may be possible to claim diminished value in addition to the repair costs.

However, diminished value is not automatically recognized for every accident-damaged vehicle.

The determination is made based on a comprehensive assessment of the vehicle model, model year, mileage, location of damage, and repair details.

In a 100-0 Accident, Your Own Insurance Company Cannot Negotiate the Settlement

In accidents where the victim's car was stationary when struck — such as being hit while parked — and the victim bears 0% fault,

"I'll just let my own insurance company handle everything"

— you might think this is possible.

However, when the victim is not at fault and the victim's insurance company has no obligation to pay compensation, the victim's insurance company generally cannot act as a representative in settlement negotiations with the other party.

As a result, the victim with a 100-0 fault ratio must negotiate directly with the other party's insurance company.

The other party's insurance company is experienced in traffic accident settlement negotiations, so negotiating over the vehicle market value and replacement-related expenses can be quite burdensome for the victim personally.

In such cases, check whether you can use your attorney's fee rider (弁護士費用特約).

If the attorney's fee rider is available, you may be able to retain a lawyer to handle the settlement negotiations while minimizing your own cost burden.

What to Check When Told It Is an Economic Total Loss

When the other party's insurance company tells you,

"It is an economic total loss, so we can only pay up to the market value,"

do not agree to a settlement immediately. At the very least, confirm the following points:

• Is the repair estimate accurate?
• What vehicle market value has the insurance company proposed?
• On what materials did they base their market value calculation?
• How much are comparable used vehicles selling for?
• Have replacement-related expenses been included?
• Does the other party have an Excess Property Damage Repair Cost Rider?
• To what extent can rental car expenses be claimed?
• Can you use your own attorney's fee rider?

Just because you were told "the market value is ¥600,000" does not mean that figure is final.

Especially during periods of rising used car prices, or for popular models and well-maintained vehicles, investigating the actual market prices is crucial.

Summary

When the repair cost of a car exceeds its market value after a traffic accident, the full repair cost may not be recoverable, as it may be classified as an "economic total loss."

This applies even in accidents where the victim bears 0% fault.

However, just because the insurance company says "we can only pay up to the market value" does not mean you must accept that amount.

The first things to verify are:

• Whether the vehicle market value is accurate
• Whether replacement-related expenses have been factored in
• Whether the case truly qualifies as an economic total loss
• Whether an Excess Property Damage Repair Cost Rider can be utilized

These are the key points.

In particular, when the insurance company's proposed amount is insufficient to purchase a comparable used vehicle, there may be room to request an increase in the market value based on used car market data.

In accidents with a 100-0 fault ratio, your own insurance company may not be able to negotiate the settlement on your behalf.

If you are not satisfied with the other party's insurance company's explanation regarding the economic total loss or the vehicle market value, we recommend consulting with a lawyer before agreeing to any settlement.

FAQ

The Initial Legal Consultation for Traffic Accidents at Yaizu Sogo Law Office Is Free of Charge

Yaizu Sogo Law Office provides a free initial legal consultation regarding traffic accidents.

We handle all traffic accident-related legal matters, regardless of severity or whether they involve property damage or personal injury. If you are feeling stressed by dealings with insurance companies, or if you want to know whether the amount offered by your insurance company is fair, please do not hesitate to consult with us.

Yaizu Sogo Law Office is available not only during regular weekday hours but also on weekday evenings and Saturdays. Please contact us by phone or email to schedule a legal consultation.

Are You Troubled by a Traffic Accident?

• Settlement Offers from Insurance Companies Are Almost Always Low
• The Insurance Company Said They Would Cut Off My Medical Expenses
• Dissatisfied with the Fault Ratio
• When and How to Consult a Lawyer About a Traffic Accident
• What Claims Can Be Made in a Personal Injury Accident?
• What Claims Can Be Made in a Property Damage Accident?
• What You Need to Know About Whiplash
• Traffic Accidents and Health Insurance
• Procedures and Steps to Follow After a Traffic Accident
• Fault Proportions Between a Through-Going Vehicle and a Right-Turning Vehicle at an Intersection
• Diminished Value (Loss of Market Value)
• Amount Claimable from the Other Party When Personal Injury Protection Insurance Was Used Prior to the Claim for Damages Against the Other Party
• Free legal consultation is available for traffic accidents
• Filing a Victim's Claim with Compulsory Automobile Liability Insurance (CALI)
• Lost Wages for Salaried Employees (Wage Earners) in Traffic Accidents
• Understanding a Company's Losses When Employees Are Killed or Injured in a Traffic Accident
• Finding the Court with Jurisdiction over Traffic Accident Lawsuits
• Want to Know Whether You Can Offset the Other Party's Damages Against Your Own in the Same Traffic Accident
• The at-fault party refuses to use their voluntary automobile insurance. What should I do?
• I was seriously injured in a traffic accident in June 2017, before the enforcement of the amended Civil Code (April 1, 2020). Three years have passed (but less than five years) since I completed my treatment. Is the statute of limitations still valid?
• How to Identify a Hit-and-Run Driver from a Vehicle License Plate Number
• Methods of Dispute Resolution in Traffic Accidents
• What You Need to Know About Medical Commuting Transportation Expenses
• How to Find the Insurance Company of the At-Fault Driver in a Traffic Accident
• Understanding Workers' Compensation Insurance in Traffic Accidents (Leave Compensation)
• How Much Is the Standard Compensation for a Traffic Accident?
• What Is Residual Disability Grade Certification in Traffic Accidents?
• How Much Compensation Can You Get for Whiplash from a Traffic Accident?
• Benefits of Hiring a Lawyer for Traffic Accidents
• Key Points When Dealing with Insurance Companies After a Traffic Accident
• How to Calculate Lost Income from a Traffic Accident
• The Relationship Between Number of Hospital Visits and Compensation for Pain and Suffering in Traffic Accidents (Key Considerations When Visit Frequency Is Low)
• What Is Maximum Medical Improvement (MMI) After a Traffic Accident?
• How to Use Lawyer Fee Special Coverage for Traffic Accidents?
• How to Handle a Traffic Accident When the At-Fault Driver Has No Insurance
• Damages in Bicycle Accidents
• Claiming Compensation When a Passenger Is Injured in a Traffic Accident
• Do You Have to Pay a Traffic Fine for a Burned-Out Brake Light?
• "I Said I Would Pay the Full Repair Cost" in a Bicycle Accident
• If Repair Costs Exceed Your Car's Market Value After a Traffic Accident, Can You Still Recover the Full Amount?
• Can a Car Proceed if a Pedestrian Yields at a Crosswalk?
• What Are "Replacement Incidental Costs" When a Vehicle Is Totaled in a Traffic Accident?
• What Damages Can Be Claimed When a Family Member Dies in a Traffic Accident?

See all articles on traffic accidents