Help! Car rear-ended! I have an insurance question.

[Luke Clemens]

I'm hoping there's an insurance/law genius out there who can give a noob like myself some advice.

Someone rear-ended my friend, and it was not my friend's fault. The trunk was damaged so that it wouldn't seal properly and now water and debris are getting inside. The other guy's insurance company has given him the runaround for two months now (Infinity Auto). They had him take pictures of the vehicle after the accident. He brought it to a shop a week ago, and the insurance company is refusing to pay because in the pictures, there is a dime-sized chip near the keyhole. Their claim is that because there was "prior damage" and they are repairing the trunk better than it was before, they can subtract the amount estimated to fix the tiny chip. As a result, the final total according to their calculations is that their payment is a couple of bucks while my friend gets to pony up the remaining 90% of the bill. My friend doesn't know if the chip happened before or during the accident. It's an older car, and even if the chip was there, my friend wouldn't have taken it in to get it fixed.

It seams to me, that even if the chip happened before the accident, the trunk had no leaking problems before their client rear-ended my friend, and as a consequence, the insurance company should pay for the trunk fix.

In the eyes of the law, who's correct? What would you recommend as the next course of action?

Thanks guys!

 

[fed up]

I will guess that your friend has liability only on the vehicle? If he had full coverage he could have his insurance policy cover the damage/repair and let the insurance companies argue it out. Without viewable damage it is always tough to prove that the water issue did not happen prior to the hit and it could be possible that you don't have the whole story from your friend.
With liability only your friend's insurance carrier owe's him not much because he is not paying them to represent a damage claim

 

[InsCommentary]

He should have turned the claim in to his own carrier under his physical damage coverage and let them deal with the other insurance company. They know how to deal with issues like this, but your friend doesn't and he doesn't have any clout with someone else's insurance company.

If he doesn't have physical damage coverage, he made his bed. Now he and maybe an attorney can lie in it.

 

[Luke Clemens]

Hey thanks so much for your help guys!

He only has liability (the car itself is only worth a couple of thousand). It seems like a lot of people don't get full coverage if the payment is > 10% of the car's value.

It's a dime size chip in the paint - there are several on the car because it's a second-hand car and some of the paint is chipping.

This seems really strange to me... so basically, if you're an insurance company and your client rear-ends someone, and the person they hit doesn't have full coverage, you just look at a photo and find any scratch or dent and suddenly you don't have to pay? That seems too easy! I was under the impression that in America the law requires people to have liability so that if you hit someone, you can cover the damages regardless of the type of insurance the person you hit has. Likewise, if you hit someone who doesn't have full coverage you're in luck because neither you nor your insurance will need to pay for the damage. So liability is really only for cases where the other person is injured or the other car gets totaled?

 

[fed up]

Hey thanks so much for your help guys!

He only has liability (the car itself is only worth a couple of thousand). It seems like a lot of people don't get full coverage if the payment is > 10% of the car's value.

It's a dime size chip in the paint - there are several on the car because it's a second-hand car and some of the paint is chipping.

This seems really strange to me... so basically, if you're an insurance company and your client rear-ends someone, and the person they hit doesn't have full coverage, you just look at a photo and find any scratch or dent and suddenly you don't have to pay? That seems too easy! I was under the impression that in America the law requires people to have liability so that if you hit someone, you can cover the damages regardless of the type of insurance the person you hit has. Likewise, if you hit someone who doesn't have full coverage you're in luck because neither you nor your insurance will need to pay for the damage. So liability is really only for cases where the other person is injured or the other car gets totaled?

The other insurance company has an obligation to THEIR insured just as your carrier has an obligation to you and your friend's company has an obligation to him to defend against frivolous claims. There seems to be more paint chips around the vehicle so they would listen to their insured who states that any impact wasn't so bad as to cause damage and how do you prove/disprove when and where the chips came from? Your friend has liability only so his carrier will defend him against liability only but he is not paying for them to protect HIS car via Collision coverage or Comprehensive

 

[InsCommentary]

The insurer is usually obligated to pay actual cash value based on market value or depreciated condition in a liability claim.

For physical damage claims, if they replace a worn/scratched/chipped fender with a brand new one, their argument is that there had been a betterment and they should be allowed to reduce payment by the amount of the betterment.

I don't believe in that argument. If you're looking only at the fender, yes it's a betterment. But it's not a betterment in the total value of the vehicle. If anything, it probably detracts from the market value slightly. Of course, if you're talking about a new engine, then there's a different argument.

Regardless, as I mentioned above. Without physical damage coverage, you are at the mercy of the other person's insurance and there are insurance companies that know this and take advantage of it.

The argument that, if your physical damage premium is more than 10% of the value of the vehicle, you should drop coverage is bogus. The odds are likely that you're going to have a physical damage claim within 10 years. Plus, far too many people today don't have several thousand dollars laying around to replace a totaled vehicle.

 

[adjusterjack]

Luke, your friend can get his trunk fixed, pay the bill, and sue the other driver in small claims court. A judge will decide how much of the damage is payable.

 

[Luke Clemens]

Thanks InsCommentary fed up and adjusterjack for sharing your advise and expertise... I certainly learned a lot of new aspects about how auto insurance is working between the lines. It's disappointing, but I guess human nature sometimes is. I suspect he's going to just suck it up as a loss because the $300 bill isn't worth the court hassle.

 

[geneseehill]

In some states the carrier cannot take betterment unless they can prove the cost of the replacement or repair of the part improved the overall value of the car. If it is an older car I doubt the repair on such a small portion of the car improved the overall value of the car. I say your friend should file a small claims court action against the adverse driver. He will pay a filing fee and a fee to serve him. You can look up the costs in the County where the loss happened typically. There is a dollar limits on the amount of recovery in small claims court. 5k is typical but I have seen up to $7500. Bring estimates of repair, Police Report, photos and a calculation of typical loss of use (car rental expenses expected while vehicle in shop such as $25 a day times 5 days) to the hearing and let the judge decide. If you prevail a judgement will be entered against the adverse driver including reimbursement of the filing and service of process fee. The judgement will need to be paid within 30 days or it starts to accrue interest at a statutory rate, such as 12%. Be aware that the adverse driver cannot bring the insurance company representatives to testify or an attorney. If I recall, Infinity Insurance is a High Risk Carrier, I suspect they did a desk review of the estimate and photos submitted and took the deduction as they see fit. It is not an agreed price. Just an offer. Don't let the matter sit. Even if you win the case your not obligated to repair the vehicle. Believe me, the adverse driver does not want to go to Court and spend a day dealing with this or being prepped to talk shop on behalf of the carrier.