State Farm Refuses to Pay for Storage - Small Claims Court?

[mvarshavsky]

TL;DR version:
State Farm took 41 days to come up with a settlement (which was also their first communication with me), and now won't cover the storage fees (their client ran a red light and plowed into me). They've also included Retained Salvage Value of $1600 for a completely destroyed vehicle (that they never appraised). I went to retrieve it, and tow yard has already sold it (yesterday) for $600. In other words, I'm out $1000 (1600 - 600) from their overestimation and large portion of storage fees they refuse to cover ($1700).


On July 1st, My wife and I got plowed into by somebody who ran a red light. The case was as clear as day and night: we have a witness following us who confirmed we went on green; we have a witness following the other guy who confirmed he ran a red light; police report concluded that the other party was at fault because of overwhelming evidence (that, and the guy himself actually admitted it on the scene). Police called the tow truck form the scene and towed the car.
We only had liability coverage with GEICO on that vehicle, so as soon as they saw the police report, they found the other party to be liable, wished me luck in pursuing them and basically didn't want anything to do with me from that point.
I contacted State Farm (the insurance agency of the other guy) and of course they haven't done anything with my claim. I had to supply the police report, and they took two weeks to conduct an "investigation" because their client has changed his mind and claimed it was me who ran a red!!!
During all of this I receive a letter from the tow yard that they are charging $60/day for storage; now we live in an apartment building with strictly enforced CC&Rs, so I have no means of retrieving the vehicle. During my very first conversation with State Farm I describe the situation with towing/storage and their first reaction is "we're not going to pay for this". After a long discussion we get it to "you won' be responsible" for the charges (I don't have a recording of this conversation, unfortunately). Two more weeks pass and the day my salvaged car is supposed to be auctioned off is rapidly approaching. On the 41st day I receive a settlement letter which does not mention anything about towing/storage. It also contains "Retained Salvaged Value" of $1600, for a car I don't want to retain. The same day I went to talk to the tow yard, and it turns out the car has just been sold for $600.

After (a literally) 2 hour conversation (with breaks for when their Claim Representative hung up on me) State Farm agreed to pay for towing and first 15 days of storage. I'm looking to get all of storage fees covered and also lowering the RSV to what the market has determined to be $600.

P.S. - just submitted a complaint to CA Dept of Insurance

 

[LGilmore]

time to lawyer up. Just include his fee in your claim. Get your court date and i'll bet you lunch they will meet you at the steps with a check. There mo from my experience. fight fight fight then cave before court.

 

[mvarshavsky]

LGilmore - thanks for your suggestion and support; my problem is the lawyers (at least the two I've consulted with) quickly loose interest as soon as they hear about the amount in question. It's almost comical, the conversation instantly moves to "now tell us more about the injuries"

 

[GreenSky]

I don't know that State Farm will be liable for storage charges. They certainly will pay for the value of the vehicle and if you want to keep it, they will be allowed to deduct the salvage value - the amount they would get if they sold it for junk or any other reason.

As far as the storage charges, I think they are probably on you. It's your car and you could have removed it from storage after day one. The fact that you choose to wait is not State Farm's issues.

What you failed to do was mitigate the damages. You allowed the cost to increase by leaving the car in storage.

While I do have compassion for what happened. The accident was certainly not your fault. But State Farm did pay you for the cost of the car. That is their only obligation.

I may be wrong and you might win in small claims if for no other reason than it's not worth State Farm's time to defend.

On the other hand, I have a great 2003 Focus in So Cal for sale.

Sorry this happened to you and i wish you well. I hope I'm wrong.

Rick

 

[djs]

Rick is correct, and unfortunately, I've seen this situation numerous times.

You have an obligation to mitigate damages, basically you have to not allow further damage or allow bills to simply get run up. In this case, if you had contacted your own insurance company for coverage, they would have indicated the car as a possible total loss and immediately retrieved the car from the storage lot and put it into one of their own (to avoid the $60 a day storage).

The investigation, with the story change is very, very, very typical.

I'm not clear on the retained salvage value. Is this because State Farm could not buy the car from you since it had already been disposed of?

Dan

 

[mvarshavsky]

GreenSky, djs - this is very helpful, you're providing great insight into what I might need in court. I could not have removed the car on day one. The police got to the scene within minutes (as my car was still smoking and I was tending to my hurt wife), separated us with the guilty party, took down the report and towed the car. I did not even know where the car was and had to wait for the police report to become available (10 calendar days). I live in an apartment building downtown San Francisco, there's no possible way I could have stored the car anywhere else. As soon as the information became available I made my insurance company aware of it (towing + 10 days of storage). As soon as my insurance company found the other party liable and said they're done with the claim but can call State Farm as a courtesy - I had them do that and made State Farm aware of the situation (towing + 21 days of storage). After that I had to call several times a week (and every day during the week the car was scheduled for auction) to push processing of my claim along, until I received a settlement letter.

I've made every attempt to mitigate damages. They didn't bother to request a police report (3 weeks in GEICO had to supply it); they chose to take 2 weeks for investigation and another to come up with a settlement - all while fully aware of charges piling up. Not to mention the phone conversation where they said I would not be liable. It's definitely not "your car - your responsibility" situation, as they are required by law to pay "reasonable storage fees". It's the gray area the meaning of "reasonable" leaves.

It's a pretty interesting predicament we are in. The law allows towers to collect extortionate, predatory fees - frankly not rooted in any sort of reality. At the same time it allows an insurance company to call those very same fees unreasonable and refuse to pay them.

 

[Bob Klee]

Well,

I only know One thing that I'd have done differently than you. I'd have an AGENT to represent me & my insurance needs vs. Geico. If you had an agent you could have gone to personally when this happened, you most likely wouldn't be in this predicament.

This goes back to another thread where someone asked if they needed to be concerned about being replaced by the internet. If this gentleman had a local agent instead of "1800-Geico" they could have helped him out vs. having to post here for advice.

Personally, I've helped many clients over the years with this exact same situation when I had my agencies....live & learn.

Sorry for the aggravation you are having to go through as you are right, this accident appears to be no fault of your own,yet you now have the grief of getting this situation handled. I don't know the rules in CA so I'd lean on those that do.

 

[FullAuto]

You should have taken steps yourself prior to the tow yard selling the car. It is your responsibility. You could have put it in a storage facility yourself, at a friend's house, etc. It's your car. You let it go.

The timelines are set by law. I'd bet State Farm met them for your state. These are not areas the largest auto insurer typically drops the ball on.

The estimated salvage value comes from data of what similiar models with similiar damage would bring at the salvage pool auction. That's what they felt they would get for it at auction had you not retained it. If you sell it for less, that's your choice. But in court, they'll have the data to support their figures. And when you argue what it actually brought, they'll say it shouldn't have been sold at a small wrecker yard auction. A salvage pool auction would have had much more competition, better prior advertisement, online bidders, etc.

As a side note, $60 per day storage is crazy. It's $10-15 per day here or $25-30 per day for inside storage.

Keep us informed how it goes. I see all the time where someone threatens to hire a lawyer to take on some big player company. The few that do are almost always worse off for it. And I understand you can just go to court without a lawyer, but I'd be interested in the results for that too.

 

[djs]

Almost everywhere in California is $60+ per day for impound storage. Its a racket and the police/state obviously get a huge kickback.

My daughter got her car towed one night, well after midnight. Somehow, it arrived at the tow yard 5 minutes before midnight, they charged the $60 for those 5 minutes.

They used the call time to justify it, not the pickup or arrival time. I'm not even sure the call happened before midnight.

Dan

 

[b61mack]

did you sign and except a check of settlement? if not sue the other party, in small claims court, state farm will have to defend them? supena everybody connected to the claim. including, anyone who sent you a letter... if you send a supena to lets say a claims person at state farm, someone routinely signs for certified mail.... supena excepted. now they must produce that person... that is how i finally beat rutgers ins from nj... i fought a simular case.. a 2400 claim, 5 court dates, a young lawyer(it didn't help, when i called him a slime ball), represented rutgers ins... this is what happens when you don't have full coverage. i asume you also did not have full coverage?
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and you do not have to take it a totalled car out of a tow yard.... if it is just the tow bill you are worried about. they sold it for the storage. they will not go after you for the rest of the bill.