There are different types of accident claims. There is the bodily injury claim when you sustain personal physical injury. Property damage claims are generated when property, such as a vehicle is damaged.
A third type of claim is the windshield claim and applies to chipped, cracked, or broken windshields. And, the fourth type of claim is the third-party insurance claim.
When filing a claim, it can be either a first party claim or a third party claim. A first party claim involves your insurance company, while a third party claim involves the insurance company of the other driver in an accident. If the third party insurer agrees that its customer caused the accident, it will pay for your accident expenses, and your insurer won't be involved. Unless of course the carrier is USAA and then you may just be up a creek.
While USAA did admit in writing and verbally over the telephone several times that their insured driver was at fault and that they (USAA) was responsible for the cost of the repairs, apparently they do not take their obligations or commitments seriously. Within two weeks they called and left me a voice message that they had decided not to make the repairs, that I should relinquish the vehicle title and return the rental car immediately.
Florida is specific in their statutes regarding the processing of claims. Here is an excerpt:
Claim settlement practices relating to motor vehicle insurance.—
(1) This section shall apply to the adjustment and settlement of personal and commercial motor vehicle insurance claims.
(2) An insurer may not, when liability and damages owed under the policy are reasonably clear, recommend that a third-party claimant make a claim under his or her own policy solely to avoid paying the claim under the policy issued by that insurer. However, the insurer may identify options to a third-party claimant relative to the repair of his or her vehicle.
(3) An insurer that elects to repair a motor vehicle and specifically requires a particular repair shop for vehicle repairs shall cause the damaged vehicle to be restored to its physical condition as to performance and appearance immediately prior to the loss at no additional cost to the insured or third-party claimant other than as stated in the policy.
(4) An insurer may not require the use of replacement parts in the repair of a motor vehicle which are not at least equivalent in kind and quality to the damaged parts prior to the loss in terms of fit, appearance, and performance.
In my case, USAA told me in writing they were responsible for the repairs and the costs of the repairs because their insured was at fault. They told me in writing and verbally, they were going to make the repairs and strong armed me into delivering my vehicle to their certified repair center. USAA openly “elected” as stated in (3) above, to repair my vehicle, as required under the state statutes. However, two weeks later they “decided” not to repair my vehicle and demanded I relinquish the title.
Now, I am not a lawyer, CPA, or insurance agent but there are a few thoughts you may want to think about and then talk with your advisors. This is a difficult position to put yourself in, and I know you want to have enough coverage to protect not only yourself, but others and any property involved. But, sometimes you just have to be realistic.
Insurance is designed to protect you from financial risk. If you have no assets – investments, live from paycheck to paycheck or retirement check to retirement check, do not own property, have little or nothing to lose, and drive a vehicle your insurance carrier is sure to write-off as a total loss, do you really need to carry more than the minimum limitations of coverage?
If you have supplemental medical coverage, are a retired veteran covered under TriCare, on Medicare and Medicaid, do you need more than the minimum limitations required?
I am not telling you to carry only the minimum limitations. I am simply pointing out questions you should raise with your advisors, especially if money is a factor.
When it comes to car insurance you are between a rock and a hard place. Your state government tells you that you cannot register or drive a vehicle that is not insured. The state also tells you the limits of the insurance they expect – demand, you to carry, including the uninsured and no-fault insurance. Here is a thought. If all states require personal injury and property damage insurance and, no-fault insurance, then how can we have uninsured motorist?
Anyway, the other unfortunate circumstance is that insurance companies are very happy to accept premium payments from you for coverage on vehicles they know from the time you sign on the dotted line, or renew your policy, they are not going to pay on any claim you submit. Why, because the vehicle is probably over five or six years’ old, and 80% or more depreciated.
Satisfy your own curiosity. The next time you are out driving. How many cars do you see on the road over five years old? Do you think those people know they are driving with a false sense of security thinking they have insurance coverage and that claims will be honored? Certainly not if they are covered by USAA! Would you consider purchasing a used car knowing you are going to have to pay for insurance in order to get it registered and knowing you would not receive any benefits should a claim have to be filed?
Do you understand how insurance companies are building their net worth? They are collecting premium monies from innocent car owners when they know, like USAA, they will not pay on claims. How many USAA customers would fall within the 20% depreciated category? Do insurance companies have a moral obligation to tell their customers, that are within that 20% category that in the event of a claim, their vehicle will probably be written off as a total loss? Is this a case of unfair and deceptive business practices?
Do not get me wrong, I firmly believe every driver should be insured, not just as a vehicle owner, but as a licensed driver.
Do you believe it is a cooperative scheme between car manufacturers and auto insurance companies to force people to purchase new vehicles at least every three years?
Here is a closing thought. When you purchase health or home or life insurance – any kind as a matter of fact, other than auto, your premiums are based on an annual contract. Not auto insurance. The insurance companies refused to establish annual contracts. They wanted to be able to adjust premiums on a six month basis, not on a 12 month basis, the way all other insurance is based.
I hope I have provided some insight, information and opinions into the world of auto insurance that will prove to be helpful or beneficial to you.
Author Resource:-
I am a world traveler, public speaker, writer, author of four published books, and business entrepreneur currently living in Florida.
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