insurance company refusing to pay for rental car

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Latest post Sun, Jan 1 2006 12:27 AM by laiels8731. 7 replies.
  • Fri, Dec 30 2005 6:47 AM

    insurance company refusing to pay for rental car

    State of CA

    Hi. A friend of mine was involved in a car accident back in early November. Anyways, the other fault was deemed at fault by his insurance company and so his insurance company is paying for the repair of the car. Fine and dandy. THe insurance company also agreed to pay for the rental car while her car is in the shop. Again fine and dandy. Well it's now been almost 2 months and her car still has not been fixed by the shop. (It's scheduled to be done by early next week.)
    THe problem is......the other day she had contacted the insurance company because her car rental company had informed her that they needed to get an extension from the insurance company to continue renting her the car. (Unless she wants to pay it out of her own pocket). THey had been trying to get an extension but were having communication problems. My friend decided to take it upon herself to call the insurance company to find out what the deal was. The agent on the phone informed her that they were only willing to pay for the rental up to Dec 3, and that she would have to pay for the rest of the days. She's ok with them not wanting to pay for anymore car rental days, because she agrees it's been an unreasonable amount of time that her car as been in the garage. However, she feels that she shouldn't have to pay for the days beyond Dec 3 that have already passed, especially since the insurance company never informed her of a time limit or that they were going to stop paying for the car rental. She argues that there wasn't any indication from the insurance company that would lead a reasonable person to think that they would not pay beyond Dec 3. Had they informed her they were going to stop paying ahead of time, she would have been ok with it. But they didn't bother to inform her until just this past week. So how was she to know that her rentals weren' t being payed for? Had she known, she could have made other arrangements (i.e borrow a friend's car to get to work ect.)

    THe agent at the insurance company (as well as her supervisor who the issue was escalated to) agrees that she shouldn't have to pay for the excess days, but that she needs to collect the difference from the car shop since they are the ones who have taken such an unreasonable amount of time (I guess compared to industry standards for the kind of damage that occured) to fix the car. While she agrees that ultimately the car shop is most likely at fault for the extended time needed, the financial responsibility towards her lies with the insurance company, not with the car shop. The insurance company is financially responsible for making her whole and not the auto shop. So they should still pay the extra days and then they can try to collect from the auto shop.

    Sorry about the long post, but can someone please shed some light on the matter here? Does she have a valid argument here? and if so, what can she do about this as they are refusing to pay for the extra days beyond dec 3.
  • Sat, Dec 31 2005 12:52 PM In reply to

    re: insurance company refusing to pay for rental car

    anyone?
  • Sat, Dec 31 2005 2:41 PM In reply to

    • dennis
      Consumer
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    • Joined on Fri, May 26 2000
    • TN
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    Feedback [*=*] re: insurance company refusing to pay for rental car

    Am am not sure what your friends rights may be in this case. At least in every case that I was given a car rental after an accident I was always informed of the maximum days theIns. co. would pay for. Of course it was always my Ins. Co. that was paying so they would be sure that I kew what was up as they wouldn't want to lose a customer over something like this.

    I suspect that she will end up having to pay for the extra days and then sue the other driver for the the difference. I suspect at that point the other drivers Ins. will reimburse her for those days as it would cost them more in legal fees (As they MUST defend thier insured) than it would be to pay for the days. Just make sure she understands she would have to sue and have this settled before she signed any release from the Ins. Co.

    Dennis
  • Sat, Dec 31 2005 3:23 PM In reply to

    re: insurance company refusing to pay for rental car

    So would it be correct to say that she should be going after the insurance company rather than after the auto shop?
  • Sat, Dec 31 2005 5:43 PM In reply to

    • dennis
      Consumer
    • Top 200 Contributor
    • Joined on Fri, May 26 2000
    • TN
    • Posts 208

    Feedback [*=*] re: insurance company refusing to pay for rental car

    Technically she can't go after the other driver's Ins. Co. as she has no contract with them. The two options are either sue the other driver or sue the auto shop.

    The contract she signed to authorize the auto shop to do the repairs would govern in determining if she could get them to pay for the extra days. In otherwords if the contract stated that the car would be fix by a certain date, she might be able to get them to pay. Personally as a layman I have never seen such a statement on a repair contract of an auto body shop as quite often they will find hidden damage during the repair and have to wait on an insurance adjuster to authorize the additional repairs. Also since they may have to wait on parts to be shipped to them this could also cause them contract problems if they put in writing when the work will be finished.

    Has your friend asked the auto shop why it has taken so long for the repairs to be finished? Did they have to wait around for an extended time for the Ins. Co. to authorize additional repairs for hidden damage? If they did this could be a factor to present in a suit against the other driver for the extra days.

    Dennis
  • Sat, Dec 31 2005 8:05 PM In reply to

    re: insurance company refusing to pay for rental car

    Hi. Thanks for responding.

    I understand that technically she is suing the other driver and not the insurance company. But in effect, the insurance company is bound by their contract with the other driver to defend him as well as act as his "bank" (within the limits of his insurance policy). So while not legally or technically, in practicality, I see it as essentially suing the insurance company. But I understand the distinction you make.

    The estimate that was given to her was that the job would take 3-4 weeks. The reason for the delay was because the insurance company would only authorize the order of a used part for repair of her car. When the part came in, according to the shop, it was not in good enough shape to be used for repairs. So they had to reorder it again, this time a brand new part. This second time, the part that came in wouldn't fit her model car. (Not sure where the error happened here). So they had to order yet a 3rd time.

    My question is in regards the path of responsibility. The insurance company is stating that since the delays are not their fault she needs to go the shop for reimbursement. She is stating that she has no recourse with the shop as they have no financial responsibility towards her. There only responsibility towards her is to fix her car. Since the other driver is responsible for the accident, that means the other driver (and thus the insurance company that represents him) is responsible for making her whole, including repairs, as well as rental car. If then the insurance company finds that the car shop screwed up, then they can go after the auto shop. However the responsibilty lies with them. They can not transfer that responsibility to her. Would that be a valid argument to make in your opinion?

    Again thanks for your help.
  • Sat, Dec 31 2005 9:39 PM In reply to

    • dennis
      Consumer
    • Top 200 Contributor
    • Joined on Fri, May 26 2000
    • TN
    • Posts 208

    Feedback [*=*] re: insurance company refusing to pay for rental car

    Well at least from what you said about the delays in the repair, I would think the Ins. Co. does bear at least some responsability for the delay since they insisted on used parts that were not good enough to effect the repair, neccessitating a re-order of parts. Especially if the shop had to wait for any length of time to get them to finally ok new parts. (ie. adjuster had to show up to see why the used parts were not good before the new parts could be ordered).

    As to finincial liabilty between your friend and the shop. That does exist even though the Ins. Co. is paying the bill. If the Ins. Co. at the last minute did not pay the shop, she would still be held responsible for the bill by the shop and have to pay it. After which she could then sue the driver because the Ins. Co. didn't pay. While that is not likely, it could happen. In addition if after the repairs were completed and your friend was driving down the road when a wheel fell of because the shop didn't put on the lug nuts properly, it would be the shop that would be financially resposable for fixing any damage caused. Also at least when I have had my car repaired after an accident the Ins. Co. would make the check out to both me and the shop. And then I would sign it over to the shop when I picked up my car. I guess they do it that way to keep both the shops and damaged party honest.

    But even with the finincial responsibility, in my opinion since the Ins. Co. did not inform your friend that they would only pay for rental until the 3rd, until much later your friends argument would be valid.

    Dennis
  • Sun, Jan 1 2006 12:27 AM In reply to

    re: insurance company refusing to pay for rental car

    Thank you so much for your info, Dennis. I really appreciate it. Have a happy new year!!
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