What a wreck! No-fault state = no rights for basic compensation?

November 15, 2010 5:29 PM

Help me make sense of no-fault state car insurance shenanigans! Covered person's insurance company not really proactive or informative. Other driver's insurance company dragging heels and giving the run-around..

My sister in NJ was rear ended while stopped at a red light. Police arrived, report taken, 100% fault of the other driver was established and recorded. The car was towed for repairs. She rented a car until car was repaired. She got a call Friday afternoon just as she was going to pickup kid from school and couldn't make it before closing to return rental and pick up car. Body shop is closed on weekends.

She had to pay a deductible for repairs (which her insurance company will recoup for her) but she has medical bills from a doctor's exam for muscle strain resulting from the accident and out-of-pocket rental car costs which her insurance says they will not reimburse. She's been working with the other insurance co. to get reimbursed but the agent is giving her a hard time about the body shop hours and the additional rental days (body shop closed weekends, car *technically* ready Friday afternoon).

I know you're not her lawyer, and likely not even a lawyer, but anybody have experience with no-fault state car insurance procedures/laws? She's an extremely busy, worried, stressed out and nearly $1k out of pocket full time mom trying to get back on track. No-fault states don't allow people to sue unless there are severe monetary damages resulting from the accident. My sister's case doesn't come close. Does this mean she's SOL on her medical bill(s) and can't be compensated for the weekend portion of the car rental? It's not like she wanted to drive the rental any longer than necessary!

I've suggested she consult a lawyer for advice and if she doesn't get anywhere with the other driver's insurance company, she'll probably pursue that option.

posted by loquat to law & government (3 answers total)

Ms. Vegetable works in car insurance pricing (and on no-fault states, but not on NJ specifically):

- If your sister does not have rental coverage on her policy, she is SOL with respect to HER insurance paying. However, as the other person is 100% at fault, it *may* be reimbursed by the other insurance company. Note: This is NOT guaranteed. It's more of a goodwill gesture than required.

- Re: medical costs. Her insurance company is in the wrong. My understanding is that no-fault/PIP is required. This means - and check her policy for limits - that her company is required to pay for her medical costs regardless of who is at fault. This is the point of no-fault coverage. I would send her company a letter, via registered mail, with copies of receipts and her no-fault/PIP contract language. This may be from a lawyer; that's really up to her.

So yes, her insurance company is wrongly giving her the runaround.
posted by a robot made out of meat at 5:54 PM on November 15, 2010

I'm in-house counsel for an insurance company.

Insurance adjusters, particularly in personal auto lines, are basically employed to administer claims, but as they're paid by the insurance company, there's a huge incentive to avoid paying claims where possible and to minimize payments where not. There are some companies whose adjusters are specifically charged to make sure that insureds get paid--my company is one of those--but they're rare, and usually found in commercial lines where retention is a bigger deal. So the adjuster is probably just doing his job here.

That being said, if your sister has a valid claim which is covered by an applicable policy of insurance, she is entitled to prompt and adequate resolution of said claim, though she may have to be firm and insistent about talking to someone with more authority than the adjuster. Even then, she has recourse before she hires an attorney. Insurance is a regulated industry, and just about the only thing that insurers like less than claims are unfriendly calls from regulators.* So to the extent that the insurer is giving her the runaround, she can make noises about unfair claim practices. That ought to get the adjuster's attention. I'd threaten to complain to the New Jersey Department of Banking and Insurance if she doesn't get what she needs--and then actually do it if the adjuster keeps yanking her around.

I'm actually going to recommend that your sister not hire an attorney here. It's likely to make the adjuster even more defensive, and we're talking about such a small amount of money that attorney's fees are going to make hiring one prohibitively expensive. The best thing here is to be firm with the adjuster until she gets what she needs, combined with a willingness to go to the regulator if there's trouble.

Either way, it's pretty unlikely that this is going to be resolved in the immediate near future. I'm thinking weeks to months. Which sucks, but it's how the cookie crumbles in this business. My company has a bunch of claims going back two and three years, and a handful as old as a decade. And we're actually really good about claims. Less scrupulous carriers have all the incentive in the world to drag their heels.

*Really. A single claim can cost the company, what, a couple of hundred grand? That sucks, but it's peanuts compared to the millions in fines and administrative costs which can result from a single audit.
posted by valkyryn at 7:38 PM on November 15, 2010 [1 favorite]

I had a situation where my wife's parked car was hit by a delivery truck. Complete fault on the part of the other party. It was totalled.

She was looking for a replacement car, but it took some time, about 2 weeks. The other party's adjuster called me a few days into it to tell me that they wouldn't be covering any more days of a rental.

He (amusingly) told me that the company had a policy of only paying for 3 days of rental vehicles.

This is almost verbatim:

Me: "That's nice that your company has a policy. It doesn't happen to correspond to Oregon law however."

Him: "What?"

Me: "Oregon law xx.xxx says 'reasonable time to find a replacement vehicle." I don't think 3 days during a work week is reasonable. We'll be billing you for the full amount of rental cost until we find a replacement vehicle."

Him: "How long do you think that will take?"

Me: "A week or two"

Him: "That's pretty long."

Me: "Yes, we have jobs. It will take a while."

Him: "We'll pay for a maximum of 14 days."

Me: "You'll pay until we find a replacement car, but 14 days is probably enough."

(click)

It took 11 more days, they paid.

Lessons:

1) Laws are very easy to look up, and very much support you on the phone.

2) "Company policy" is crap designed to fool the uninformed.

3) Being firm is both fun and profitable.

4) Hahahaha.
posted by Invoke at 9:11 PM on November 15, 2010 [4 favorites]