Horrible Claim Issue - Need Advice

[NotEnough]

Hi All!

Hope everyone is doing well. I'm asking this question on behalf of a good friend.

He was robbed at knife point for his car early 2015. He filed a police/theft claim right away. A few days later the cops recovered his car then the insurance company took over it due to damages. The thieves also damaged his transmission from not being able to drive a manual transmission correctly.

It has been over 1.5 years (it is now Oct 2016) but he still haven't received his car back. The mechanic's shop is saying the insurance company is arguing over the price of the transmission. Long story short this have been the issue since last year. Every 30 days the insurance company would send him a letter saying they are still working on resolving his claims issue.

I had him file a complaint with the CA DOI so far. I'm not sure what else he could do. Is there anything illegal or wrong the insurance company is doing? I'm also worried about the car accruing more damages such as bad seals from sitting outside for so long.

Any help with be greatly appreciated, thank you!

*P.S. - I'm not sure of this matters but a few months after realizing how bad this company was, he got new insurance from another company. He have to keep full coverage on it due to a loan on the vehicle. Is the insurance company taking their time because he is no longer insured with them?

 

[djs]

To set the record straight, the insurance company is probably not arguing over the price of the transmission, the transmission shop is. By that I mean, in most cases, insurance companies pay book rate for labor and repairs. They tend not to argue this to much. The transmission shop is looking to get more, probably considerably more, then the normal rate for the repair. Yes, I'm guessing, but I've seen it happen.

Now, it comes down to who picked the shop. If it is the insurance company then they are on the hook to settle this and settle it now. If it was the insured, then the insurance company should pay the going rate and the insured may be on the hook for the excess charges.

There are a lot of details missing in your explanation. Normally, storage charges by now would have made the car a lien nightmare. How much is the difference between what the insurance company is willing to pay and what the shop wants? Why is there a difference?

The letter is a requirement when a claim goes unsettled and they will continue to get one every 30 days.

Dan

 

[NotEnough]

To set the record straight, the insurance company is probably not arguing over the price of the transmission, the transmission shop is. By that I mean, in most cases, insurance companies pay book rate for labor and repairs. They tend not to argue this to much. The transmission shop is looking to get more, probably considerably more, then the normal rate for the repair. Yes, I'm guessing, but I've seen it happen.

Now, it comes down to who picked the shop. If it is the insurance company then they are on the hook to settle this and settle it now. If it was the insured, then the insurance company should pay the going rate and the insured may be on the hook for the excess charges.

There are a lot of details missing in your explanation. Normally, storage charges by now would have made the car a lien nightmare. How much is the difference between what the insurance company is willing to pay and what the shop wants? Why is there a difference?

The letter is a requirement when a claim goes unsettled and they will continue to get one every 30 days.

Dan

Hi Dan,

Thank you for the insight. The shop was recommended by the insurance company during the claims process. He has all the documents for me to see but haven't gotten a chance to go through the stack. I'm not an adjuster so unsure if the claims process. I was just shocked that a claim can take this long since I've never heard of one this bad my time as a producer.

So since the company did pick the shop, what can we do to expedite the process?

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Dan,

Also, he told me they were fighting over the cost of repairs due to the depreciation. I looked at the insurers website (small non standard here in CA) and they have whats called a PPO Endorsement for a preferred shop. I think it is just a sales strategy for the clientele though. It says by going to their preferred shop in their "PPO Network", the car will be repaired using state of the art technologies and work will be guaranteed for life of the vehicle's ownership.

It also says word for word "If you elect to have your vehicle repaired at a PPO shop, you will only be required to pay your deductible, plus any appropriate betterment /depreciation."

Not sure if it is wise to say the company's name in this situation?

 

[djs]

Hi Dan,

Also, he told me they were fighting over the cost of repairs due to the depreciation. I looked at the insurers website (small non standard here in CA) and they have whats called a PPO Endorsement for a preferred shop. I think it is just a sales strategy for the clientele though. It says by going to their preferred shop in their "PPO Network", the car will be repaired using state of the art technologies and work will be guaranteed for life of the vehicle's ownership.

It also says word for word "If you elect to have your vehicle repaired at a PPO shop, you will only be required to pay your deductible, plus any appropriate betterment /depreciation."

Not sure if it is wise to say the company's name in this situation?

That is a VERY troubling statement. Per most policy language, it is technically correct. I still don't really understand the problem though.

I'm not sure how old the car is, but lets say it's 10 years old and the transmission normally lasts for 20 (not sure if either of these are true). The transmission is half used. Putting in a new transmission would be a 'betterment' and the insured would be on the hook for the deductible plus the cost of half a transmission (plus potentially half the labor). Most shops would put in a used / rebuilt transmission and call it a day and because it is used, there is negligible betterment issues, if any, to deal with.

What is there to argue about? I don't care who the company is, but is the shop asking for an excessive amount or is the insurance company really bottom lining this thing? How much are they apart?

The devil is in the details on these things. Non-standard companies tend to nitpick claims a lot more then preferred carriers, but this sounds like a family feud between the shop and the carrier.

Dan

 

[NotEnough]

That is a VERY troubling statement. Per most policy language, it is technically correct. I still don't really understand the problem though.

I'm not sure how old the car is, but lets say it's 10 years old and the transmission normally lasts for 20 (not sure if either of these are true). The transmission is half used. Putting in a new transmission would be a 'betterment' and the insured would be on the hook for the deductible plus the cost of half a transmission (plus potentially half the labor). Most shops would put in a used / rebuilt transmission and call it a day and because it is used, there is negligible betterment issues, if any, to deal with.

What is there to argue about? I don't care who the company is, but is the shop asking for an excessive amount or is the insurance company really bottom lining this thing? How much are they apart?

The devil is in the details on these things. Non-standard companies tend to nitpick claims a lot more then preferred carriers, but this sounds like a family feud between the shop and the carrier.

Dan

Hi Dan,

The car is a 2012. From what he tells me, the shop wanted to use a rebuilt transmission but the insurance company is requiring them to source a used one with comparable miles. He only went with a non standard because he was a newly licensed driver and lived away from his parents policy so couldn't be listed under theirs.

Is there anything the CA DOI could do to expedite this by making the complaint? I've only been in the P&C side for two years so still have a lot left to learn about these stuff.

 

[djs]

Using a used, comparable transmission is normal, but then there is no betterment, so he would be paying his deductible.

Again, I still don't understand the real problem here. It sounds like the insurance company authorized a replacement transmission. Are they not paying for it? What is the real disagreement over?

Filing a complaint with the DOI will do some good if the insurance company is not paying for what they need to pay for. It will not help at all if the transmission shop is wanting to overcharge for the services provided, except as you said, it was an insurance company recommended shop.

If its been over a year, yes, file the complaint, but also realize you need to articulate the problem better then just saying its taking to long. I'm guessing from what you said, the problem is the difference in price between a rebuilt transmission and a used transmission.

Dan

 

[InsCommentary]

No auto physical damage claim should take this long. Since coverage is not an issue, just the amount, does the policy have an arbitration clause? I'd take this up with the California DOI under their Fair Claims Settlement Practices law:

Table of Contents - Fair Claims Settlement Practices

Section 2695.1: Preamble

Section 2695.2 Definitions

Section 2695.3 File and Record Documentation

Section 2695.4 Representation of Policy Provisions and Benefits

Section 2695.5 Duties Upon Receipt of Communications

Section 2695.6 Training and Certification

Section 2695.7 Standards for Prompt, Fair and Equitable Settlements

Section 2695.8 Additional Standards Applicable to Automobile Insurance

Section 2695.85 Auto Body Repair Consumer Bill of Rights

Section 2695.9 Additional Standards Applicable to First Party Residential and Commercial Property Insurance Policies

Section 2695.10 Additional Standards Applicable to Surety Insurance

Section 2695.11 Additional Standards Applicable to Life and Disability Insurance Claims

Section 2695.12 Penalties

Section 2695.13 Severability

Section 2695.14 Compliance Date

Fair Claims Settlement Practices Regulations

 

[INSUREGEEK]

None of this makes any sense.

I don't wait 5 minutes for a drink.

I sure as hell don't wait 18 months for a transmission>> WTF??

Tell your friend to start raising holy heck with everyone involved. Like, 17 months ago start raising holy heck. Your "friend" has been WITHOUT A CAR for 18 months?

BS.

Call the shop. Call the insurance. Call Donald Trump.

BS.

 

[kgamarketing]

None of this makes any sense.

I don't wait 5 minutes for a drink.

I sure as hell don't wait 18 months for a transmission>> WTF??

Tell your friend to start raising holy heck with everyone involved. Like, 17 months ago start raising holy heck. Your "friend" has been WITHOUT A CAR for 18 months?

BS.

Call the shop. Call the insurance. Call Donald Trump.

BS.

Call Donald trump is the most logical answer yet.

 

[NotEnough]

Using a used, comparable transmission is normal, but then there is no betterment, so he would be paying his deductible.

Again, I still don't understand the real problem here. It sounds like the insurance company authorized a replacement transmission. Are they not paying for it? What is the real disagreement over?

Filing a complaint with the DOI will do some good if the insurance company is not paying for what they need to pay for. It will not help at all if the transmission shop is wanting to overcharge for the services provided, except as you said, it was an insurance company recommended shop.

If its been over a year, yes, file the complaint, but also realize you need to articulate the problem better then just saying its taking to long. I'm guessing from what you said, the problem is the difference in price between a rebuilt transmission and a used transmission.

Dan

Hi Dan,

So I got some clarification from my friend. The insurance company recommended to go to their preferred shop otherwise they would have a 20% copay of the cost of repairs. Now the shop the car is at...its actually a body shop. The insurance company is saying the price of the transmission is too high forcing the body shop to find replacements. The insured, my friend, isn't getting that much information aside from that. I also think since it is a body shop and not a mechanic's shop, they probably aren't very good at situations like this as far as finding parts and charging the right labor.

The shop gave the insured their loaner car since that day but just earlier, the loaner car gave out. I have been insisting my friend to get things taken care of it but they just switched adjusters on him so its becoming a bigger mess.

Maybe someone here on the forums know someone at Western General Insurance and can help? =(.

My friend is a huge push over...I would think a situation like this would push someone to their limits lol

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None of this makes any sense.

I don't wait 5 minutes for a drink.

I sure as hell don't wait 18 months for a transmission>> WTF??

Tell your friend to start raising holy heck with everyone involved. Like, 17 months ago start raising holy heck. Your "friend" has been WITHOUT A CAR for 18 months?

BS.

Call the shop. Call the insurance. Call Donald Trump.

BS.

I would call Donald Trump but don't know if he can make this claim situation great again, if it ever was. lol