issue with liability only insurance

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issue with liability only insurance

Postby Mitdac » Thu May 23, 2013 12:54 am

I have always been carrying car insurance for liability and UIM (with reasonably high limit 100k/300k). Comprehensive insurance is not needed, as I can deal with the loss if I'm at fault.

A recent accident exposes flaws in my thinking. Another car bumped my car from behind in a multi-cars accident, damaging my bumper/trunk/taillights. My insurance obviously doesn't deal with fixing my car. UIM is useless because the the other car does have insurance. The other car insurance admits that their car bumped my car, but refuses to accept liability until their investigation is complete. They did tell us, though, that if they paid, they might pay about 7k to fix the car or they might pay 13k and take the car, but those were just estimates and were not final. Their driver claimed that some sudden mechanical failure prevented him from operating his car so he was not liable to my car's damage (nor to someone else's injury neither). The investigation is still going on nearly 4 months after the accident to determine the mechanical failure and is still with no end in sight.

My car is in limbo in the mean time. I would never have thought of this situation when I bought insurance. If I had a comprehensive coverage, my insurance would have paid and would have sought reimbursement from the other insurance company.

What is your thought on this issue and what would you do if you are in my situation?
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Re: issue with liability only insurance

Postby SimonJester » Thu May 23, 2013 2:43 pm

First did you file a police report? Who was listed as at fault?

As you said you can cover the loss, so fix your car then take the costs and get with a lawyer and have them send a letter of demand to the insurer and the other driver. Given them a reasonable amount of time to pay up or stipulate your next action will be to sue the driver.

This should motivate the other driver to convince his insurance company to pay out.

You suffered a loss because of another party, they need to make you whole. Their insurance coverage is their business not yours...

Time to play hard ball...
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Re: issue with liability only insurance

Postby jsl11 » Thu May 23, 2013 4:00 pm

Mitdac wrote:My car is in limbo in the mean time. I would never have thought of this situation when I bought insurance. If I had a comprehensive coverage, my insurance would have paid and would have sought reimbursement from the other insurance company.

Comprehensive coverage does not cover collision damage to your car. Comprehensive covers fire, theft, malicious damage, etc. Collision coverage covers your car for collision damage. Collision and Comprehensive are two separate coverages.
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Re: issue with liability only insurance

Postby dm200 » Thu May 23, 2013 4:30 pm

jsl11 wrote:
Mitdac wrote:My car is in limbo in the mean time. I would never have thought of this situation when I bought insurance. If I had a comprehensive coverage, my insurance would have paid and would have sought reimbursement from the other insurance company.

Comprehensive coverage does not cover collision damage to your car. Comprehensive covers fire, theft, malicious damage, etc. Collision coverage covers your car for collision damage. Collision and Comprehensive are two separate coverages.
Jeff


I agree. Only your having collision coverage would have helped you in this case. Comprehensive, as I understand the coverage, has nothing (or almost nothing) to do with being "at fault". A tree falls on your car and destroys it, or (while you are not driving), the wind blows your car away, and similar situations would be covered by comprehensive coverage. IMO, as you describe your situation, both collision and comprehensive would be advisable (although with as high as a deductible as you can probably get).
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Re: issue with liability only insurance

Postby frugaltype » Thu May 23, 2013 4:53 pm

Mitdac wrote:I have always been carrying car insurance for liability and UIM (with reasonably high limit 100k/300k). Comprehensive insurance is not needed, as I can deal with the loss if I'm at fault.

A recent accident exposes flaws in my thinking. Another car bumped my car from behind in a multi-cars accident, damaging my bumper/trunk/taillights. My insurance obviously doesn't deal with fixing my car. UIM is useless because the the other car does have insurance. The other car insurance admits that their car bumped my car, but refuses to accept liability until their investigation is complete. They did tell us, though, that if they paid, they might pay about 7k to fix the car or they might pay 13k and take the car, but those were just estimates and were not final. Their driver claimed that some sudden mechanical failure prevented him from operating his car so he was not liable to my car's damage (nor to someone else's injury neither). The investigation is still going on nearly 4 months after the accident to determine the mechanical failure and is still with no end in sight.

My car is in limbo in the mean time. I would never have thought of this situation when I bought insurance. If I had a comprehensive coverage, my insurance would have paid and would have sought reimbursement from the other insurance company.

What is your thought on this issue and what would you do if you are in my situation?


Wow, that's incredible. Who's the other insurance company (I'm guessing State Farm :-)

Is there no legal recourse about this?
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Re: issue with liability only insurance

Postby Mitdac » Thu May 23, 2013 5:53 pm

@jsl11: I probably mispoke here. I have always have liability insurance -- didn't even know the difference between comprehensive and collision coverage. Thanks for the clarification.
@SimonJester: yes, the police did came and made a report about the accident. Their insurance agreed that their driver was at fault as stated in the police report, but they claimed that being at fault didn't mean that they were liable.
@frugaltype: the other car insurance is Nationwide. Their car also hit two other cars in that same accident, one of which hit another car as the result.

It was a multi-cars accident, and from what Nationwide told me, two lawsuits were filed against them -- as the reason for the delay in their investigation. Given the amount of money involved, I'm reluctant to file a lawsuit (and pay lawyer's fee at this time) myself. Is this the right thing to do?
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Re: issue with liability only insurance

Postby scrabbler1 » Thu May 23, 2013 8:10 pm

The only possible liability coverage which may help you out is called Underinsured Motorists Property Damage (UIMPD). It is not valid in most states but it may be valid in Texas (your home state, right?). This coverage would apply if the at-fault driver has insurance (Property Damage, here) but not enough to pay for the damages he caused. And given that there are many cars involed, this may occur. I do not know all the administrative hoops you have to go through to collect from your insurer for a UIMPD claim, but if you do have this somewhat obscure coverage then you shold at least ask about it.
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Re: issue with liability only insurance

Postby dm200 » Thu May 23, 2013 9:18 pm

Mitdac wrote:@jsl11: I probably mispoke here. I have always have liability insurance -- didn't even know the difference between comprehensive and collision coverage. Thanks for the clarification.
@SimonJester: yes, the police did came and made a report about the accident. Their insurance agreed that their driver was at fault as stated in the police report, but they claimed that being at fault didn't mean that they were liable.
@frugaltype: the other car insurance is Nationwide. Their car also hit two other cars in that same accident, one of which hit another car as the result.

It was a multi-cars accident, and from what Nationwide told me, two lawsuits were filed against them -- as the reason for the delay in their investigation. Given the amount of money involved, I'm reluctant to file a lawsuit (and pay lawyer's fee at this time) myself. Is this the right thing to do?


Did Nationwide, in any way, explain why their insured might not be "liable"?

Is it possible to have an attorney take on the case on a contingency fee basis? Probably a longshot, but might be worth a try.
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Re: issue with liability only insurance

Postby FrugalInvestor » Thu May 23, 2013 9:58 pm

This sort of situation is why it's important to have some level of collision coverage, even if it's subject to a very high deductible. Having coverage means you deal with your insurance company and your insurance company goes to bat for you against the responsible party and their insurance. They're professionals at this sort of thing, you obviously are not.

I know this doesn't help you in this situation but hopefully it might help others who may be trying to save money in the same way.

This also applies to health insurance. Having some coverage, even if high deductible, gives you the benefit of the insurance company's negotiated rates and 'buys' their expertise and support.
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Re: issue with liability only insurance

Postby Mitdac » Thu May 23, 2013 11:34 pm

@scrabbler1: I have uninsured/under insured coverage, but my insurance said it was not applicable. An adjuster for Nationwide once told me that if they accepted the liability, there would likely be enough money for all property damages. He had a 50k/100k/50k liability insurance or something like that. There probably would not be enough for all personal injury damages, though.

@dm200: it took a while for me to understand their arguments. Their driver had to be liable for the accident, i.e. he had to do or fail to do something for the accident to happen, in order for them to pay. They suggested that some mechanical failure happened suddenly and such failure was beyond what their driver could anticipate. They had to investigate to find out the mechanical failure, and they could not accept the liability until they were done with the investigation. I wouldn't be surprise if the Nationwide adjuster I talked to was really an attorney based on the kind of language he used, no straight answer on pretty much anything -- and my understanding may not be exactly what he told me...
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Re: issue with liability only insurance

Postby Quasimodo » Fri May 24, 2013 11:17 am

FrugalInvestor wrote:This sort of situation is why it's important to have some level of collision coverage, even if it's subject to a very high deductible. Having coverage means you deal with your insurance company and your insurance company goes to bat for you against the responsible party and their insurance. They're professionals at this sort of thing, you obviously are not.

I know this doesn't help you in this situation but hopefully it might help others who may be trying to save money in the same way.

This also applies to health insurance. Having some coverage, even if high deductible, gives you the benefit of the insurance company's negotiated rates and 'buys' their expertise and support.


I think this is wise advice.

John
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Re: issue with liability only insurance

Postby dm200 » Fri May 24, 2013 11:44 am

Mitdac@dm200 wrote:: it took a while for me to understand their arguments. Their driver had to be liable for the accident, i.e. he had to do or fail to do something for the accident to happen, in order for them to pay. They suggested that some mechanical failure happened suddenly and such failure was beyond what their driver could anticipate. They had to investigate to find out the mechanical failure, and they could not accept the liability until they were done with the investigation. I wouldn't be surprise if the Nationwide adjuster I talked to was really an attorney based on the kind of language he used, no straight answer on pretty much anything -- and my understanding may not be exactly what he told me...


Wow, that's an interesting position for an insurance company to take. It sure seems to me that if a drive has "mechanical failure" in his car and that mechanical failure causes damage to me and or my car, that this is "liability". I wonder if this is some new kind of "insurance theory"?

Are you dealing with the lowest level representative at Nationwide? Many years ago, when I had an issue with my insurance company, I got the results I wanted by asking/demanding to speak with the regional representative (or some title like that). My "story" relates to the (sometimes fine line) distinction between "collision" and "comprehensive". At the time, I had different deductibles for collision and comprehensive, with the deductible on the comprehensive lower. At the time, before I was married, I shared a house with several other guys and I went on vacation for a week. One of the other residents was doing something in the driveway when I left (did not take my car), so I asked him to move my car (left the keys) into the driveway when he was finished doing whatever he was doing. The next day, I received a somewhat frantic call from him. Before he had a chance to move my car, he noticed the street was collapsing. So, he got into my car, with the intent of moving it, but before he moved it, the street collapsed and the front of my car fell in. Then, to ensure the future safety of my car, he had a tow truck pull my car down the street to a safe place. The collapsing street was caused by a broken water main.

So, I told him that I would deal with all the details when I got back, but please call my insurance company to notify them and that I would be in contact in about a week.

When I got back, I drive the car (could barely drive it) to the State farm place for an "estimate" and authorization. They estimated the damage and repair costs, but used the collision deductible. No, I said, comprehensive - the car fell into the hole. No, they said, the car was driven into the hole. Then, they looked at the damage again, and said the car was moving forward when the damage was done. Of course, I said, the car was falling forward. The rep I dealt with was a summer law school intern, and she knew I was right (I could tell by demeanor and body language), BUT she had to go with the party line. I asked/demanded to escalate to the regional director (or some title like that) and the local decision was overridden. After the local rep told me the new decision (comprehensive), she then said, very "off the record" that she knew I was right, was happy that I was persistent, but that her hands were tied by company rules and procedures. I learned more than I ever wanted to learn about the difference between collision and comprehensive. The example is that if your car falls into a hole (or similar) - it is comprehensive, BUT if you drive into a hole (or something similar) it is collision. My guess, then, is that if a tree falls on your car, it is comprehensive, but if you drive into a (falling) tree, it is collision. Now, I have the same deductible for both.
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Re: issue with liability only insurance

Postby scrabbler1 » Fri May 24, 2013 1:48 pm

Fascinating story, dm200!

I wonder if the decision (comp or collision) came down to if your friend had put the keys into the ignition, had he started the car, had he put it in gear, had he disengaged the parking brake (assuming it was engaged beforehand). I mean, if he had not started the car but was merely sitting in the driver's seat and scrambled out of the car to safety when the street began collapsing around him, I can't see it being collision.
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Re: issue with liability only insurance

Postby dm200 » Fri May 24, 2013 3:59 pm

scrabbler1 wrote:Fascinating story, dm200!

I wonder if the decision (comp or collision) came down to if your friend had put the keys into the ignition, had he started the car, had he put it in gear, had he disengaged the parking brake (assuming it was engaged beforehand). I mean, if he had not started the car but was merely sitting in the driver's seat and scrambled out of the car to safety when the street began collapsing around him, I can't see it being collision.


I did not go into that level of detail, but when he called my insurance company, as I requested him to do, and spoke with them, they logged it as the car was being driven when street collapsed. What actually happened, as he told it to me, was that he rushed over to the car to move it before the street collapsed, got into the car, and was about to start it, when the street collapsed under the front of the car.
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Re: issue with liability only insurance

Postby jsl11 » Fri May 24, 2013 4:26 pm

One exception to the distinction between comprehensive and collision is the case where you collide with an animal, wild or domestic. In my experience, this is a comprehensive claim.
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Re: issue with liability only insurance

Postby dm200 » Fri May 24, 2013 4:36 pm

jsl11 wrote:One exception to the distinction between comprehensive and collision is the case where you collide with an animal, wild or domestic. In my experience, this is a comprehensive claim.
Jeff


Add "impact with animal" to the list of why to have both collision and comprehensive! :oops:
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Re: issue with liability only insurance

Postby Ged » Fri May 24, 2013 4:41 pm

FrugalInvestor wrote:This sort of situation is why it's important to have some level of collision coverage, even if it's subject to a very high deductible. Having coverage means you deal with your insurance company and your insurance company goes to bat for you against the responsible party and their insurance. They're professionals at this sort of thing, you obviously are not.


I generally carry a fairly high deductible collision insurance until the car value is at the point were it isn't worth fixing (12-15 years) if it were in an accident. Is there any reason for carrying collision at this point in the life of a car?
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Re: issue with liability only insurance

Postby LadyGeek » Fri May 24, 2013 4:42 pm

This thread is now in the Personal Finance (Not Investing) forum (insurance).
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Re: issue with liability only insurance

Postby scrabbler1 » Fri May 24, 2013 5:22 pm

jsl11 wrote:One exception to the distinction between comprehensive and collision is the case where you collide with an animal, wild or domestic. In my experience, this is a comprehensive claim.
Jeff


Good point. I worked for 23 years in the actuarial field specializing in personal auto insurance. In the last few years of my career, we had to create a special Comprehensive loss code for collision with animals because this cause of loss had increased so much over the years.
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Re: issue with liability only insurance

Postby interplanetjanet » Fri May 24, 2013 6:37 pm

jsl11 wrote:One exception to the distinction between comprehensive and collision is the case where you collide with an animal, wild or domestic. In my experience, this is a comprehensive claim.
Jeff

In mine as well. I have both driven into animals and have had them fall on my car from a height and it's always been a comprehensive claim.
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Re: issue with liability only insurance

Postby Mitdac » Fri May 24, 2013 6:45 pm

dm200 wrote:Are you dealing with the lowest level representative at Nationwide?


I didn't try to push very far. I filed a complain with the TX DOI (department of insurance) and received a reply from their "Customer Advocacy Coordinator/Pacific West Region" claiming they were working diligently on the case. DOI took their words for that (and besides, the DOI had no rules against long investigation for 3rd party claim). Given that the other parties in the accident filed lawsuits, the chance of asking Nationwide to finish their investigation quickly, let alone to admit liability, on my own is probably very small if not nonexistent.

What I hope for is that the lawsuits expose the fallacy of Nationwide claim. This likely takes a long time...
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