Is my insurance agent giving good advice?

December 19, 2012 7:25 PM

I was in a car crash today that seems pretty straightforward, but my agent called with a proposition I hadn't expected, and I don't know what's best.

So a school bus (no kids, fortunately) failed to yield right-of-way and pulled right out in front of me. I hit the brakes, but the front of the car had a fair amount of damage. It's an older vehicle, and I'm thinking it's likely totaled, but I haven't heard yet.

The bus driver admitted fault to the police when they arrived, and everybody was very grown-up and calm about the whole affair. I called my insurance company and filed a claim (I'm in MN, which is a no-fault state).

So far, so good. However, a couple of hours later, my insurance agent called and explained that filing a claim with my carrier meant that I wouldn't see the amount of my deductible until my carrier had received payment from the bus company's carrier. Here's the key bit: he said that I could withdraw my claim, and go against the other insurance company for direct compensation. He even said that he'd arrange and participate in a conference call with them to resolve the issue. As he explained it, the upside is that I wouldn't have to wait nearly as long to recoup the amount of my deductible from the other company as I would if I kept my claim with my insurance carrier.

This sounds slightly appealing, but I feel like I'm opening myself up for a risk if they fight with me; a lawyer then becomes my responsibility, and my insurance company is off the hook. I also wonder what other ulterior motives my agent might have. I tend not to trust someone to whom I'm giving money when they say they're just looking out for me.

Anyone have experience with this sort of thing, or just any general advice?

posted by Ickster to law & government (24 answers total)

You pay your insurer to go to bat for you, no? I don't see their value add here.

If it were me, I'd respectfully decline and find a different insurance company/agent after this is over.
posted by Atrahasis at 7:34 PM on December 19, 2012 [10 favorites]

I'm no insurance expert, but that sounds... weird-ish. To me, the primary reason for insurance is the whole "cash to cover my car / someone else's car in case of a crash" thing, but a VERY BIG secondary reason is the whole "YOU GUYS handle the whole pain-in-the-ass aspect of the aftermath of a crash". There is no way in hell I'd ever go after another insurance company directly - they don't make money by settling claims nicely. Case in point: I'm with State Farm (whom I love). I was in an accident; the other driver was SO at fault that she was actually sentenced to probation as a result of the incident. State Farm still had to fight with her insurance company for - no lie - FOURTEEN MONTHS - before they'd agree to cough up my deductible. I wouldn't have wanted to deal with that headache myself.
posted by julthumbscrew at 7:38 PM on December 19, 2012 [1 favorite]

I'm with State Farm (whom I love).

Funny, I'm with State Farm too.
posted by Ickster at 7:41 PM on December 19, 2012

You pay insurance so that THEY go to bat for YOU. Take the long route and find a new insurance company ASAP.
posted by sanka at 7:44 PM on December 19, 2012 [3 favorites]

So the upside of the arrangement he's proposing is that if it goes well you'll get your deductible amount slightly faster than you otherwise would. The downside for you (and the upside for your agent) is that fighting for that check becomes entirely your responsibility.

That does not sound like a good idea to me. it sounds downright sketchy.
posted by ook at 7:48 PM on December 19, 2012 [3 favorites]

If you stick with your carrier, you won't see the amount of your deductible until they receive compensation from the other insurer.

If you withdraw from your carrier, you won't see any money until you receive compensation from the other insurer. Where would the money come from? So even ignoring the whole aspect of having the insurance company to navigate through the complicated legal side of things, I can't see how this would speed anything up. It's unlikely that the opposing insurance company will move any faster if it's an unrepresented party on the other end (my first instinct is the opposite, since you don't know the process and might slow things down without planning to.)

I would decline. Make sure you document everything with your agent. Then I would go over their head to a manager/etc and ask for an explanation. That should let you know whether or not you should drop the insurance company or just get a new agent.
posted by Lemurrhea at 7:49 PM on December 19, 2012 [9 favorites]

That actually sounds similar to what happened with me when I was hit by someone running a red light. I called my insurance (Geico,at the time). and they told me that I might be better off dealing with the other party's insurance for similar reasons. But, they told me that if I encountered any difficulty with the other company, to call them and they would get involved.

I contacted the other guy's company, Travelers, and they were already aware of the accident and it was pretty painless, they paid to fix my car and got me a rental. IIRC my insurer checked in with me after a couple of days to make sure everything was sorted.
posted by ghharr at 7:51 PM on December 19, 2012 [7 favorites]

My (State Farm) agent suggested I do the same thing after a guy attempted to hit-and-run after an accident with my car in the school parking lot (dude was blocked in by wily parents, police were called and cited him). Agent said that if the claim got contested by the other guy's insurance or otherwise went funny then I should go ahead and make a claim against my own insurance. It worked out fine for me, but it did feel a little weird. If I had gotten any runaround I would have just filed with my agent, but I didn't.

Anyway, just so you know it's possible it isn't a total scam. Maybe ask your agent to guarantee that you can still file a claim with them if things go sour?
posted by charmedimsure at 7:52 PM on December 19, 2012 [6 favorites]

This happened to me last year situation to a T (not a bus though).

I wouldn't do it, your insurance company is better poised to get that check then you are, thats what you pay them for. You would be solely responsible for chasing this up as well as relying on the insurance plan of the bus driver which could be vastly different to your own. Its better to do this the formal way i.e. let the two insurance companies thrash it out and you just sit back and relax. Is a hire car included in your plan? I would be checking on your plan for those sort of questions instead right now. What is the insurance company going to do for you while you wait for them to sort this out promptly. Yes this way could take some more time to get the car fixed and or paid for a new car but at least it will happen according to your plan, your expectations and what you've been paying for.
posted by Under the Sea at 7:59 PM on December 19, 2012

No. File your claim because this is what you pay your insurance company to do.

The way it works is you submit your claim, your insurance company pays you, and then the insurance company can sue the driver and the school district under its subrogation rights. You dont pay your premium to make their lives easier.
posted by Tanizaki at 8:02 PM on December 19, 2012 [4 favorites]

I have been rear ended two different times. Both times it was the other persons fault, cops came, other person admitted fault to the police officer & officer wrote his report as such.

Both times I filed a claim with THE OTHER PERSONS insurance company, not mine. My car was fully repaired and I got a rental while it was in the shop. I never paid one dime. The other persons insurance company paid for everything directly to the body shop and the car rental agency, no hassle. It was painless. Honestly, it never occurred to me to file it with my insurance since it wasn't my fault & I had the at fault party's insurance info. I thought that was just the way you were supposed to do it.

This happened in NC and SC.
posted by ZabeLeeZoo at 8:15 PM on December 19, 2012 [5 favorites]

You can go through either insurance company, the pros and cons are pretty much explained by the commenters above. If the adverse driver's carrier doesn't consider their driver 100% at fault and quickly handle the issue, then yes, your carrier can go to bat for you by filing a claim against your own policy. The procedure by which carriers get money from each other is subrogation, that's what you're looking for here.

In short, if the adverse driver's carrier is quick, you could be made whole faster than if you went through your carrier (since they won't release the deductible until after the adverse carrier pays out to them). The subrogation process is sometimes quick and sometimes it gets held up. (What if Ins Co A has a bone to pick with Ins Co B and starts haggling over percent of fault on a few thousand claims between the two of them to prove a point?)

If you have a high deductible and cannot afford to be out the money now, that would be another reason to file with the adverse driver's carrier.
posted by Brian Puccio at 8:24 PM on December 19, 2012

This is completely normal.

I have GEICO and my parked car was sideswiped by a passing truck. Driver stopped, exchanged information with me, admitted fault. No poilce were involved and there was only minor damage to the side of my car, thankfully. (Of course, minor still came out to $1,300.)

I called up GEICO and they said the same thing your carrier did. I filed a claim with GEICO, the customer service rep with GEICO suggested filing a claim with State Farm (who represented the other driver), called State Farm on my behalf, State Farm contacted their driver, who admitted fault to them, and then State Farm agreed to pay me for the damage (as estimated by their estimator of course). GEICO closed my claim, characterized it as "for reporting purposes only," and assured me that it would not affect my premiums since it wasn't a real claim. It didn't.

There's no need to go the subrogation route if the other driver is admitting fault. Still, I think it's always a good idea to report any accident that is not your fault to your insurance company. It's always possible that the guy who admits fault to you (and maybe the police) at the scene will turn around and tell his insurance company something entirely different, requiring your insurance company to go to bat for you.
posted by saslett at 8:52 PM on December 19, 2012 [1 favorite]

Ask your agent if taking this route would cause any problems to you if it turned out to be burdensome and you later decided wanted your insurance to step in and handle it after all. Ie, are you making a point-of-no-return decision?

I dealt with a company directly - only because I had no choice - and while it worked out ok for me, it was pretty clearly a case of I take whatever they offer and consider myself lucky, because the only recourse would be a fight where I don't know the rules and they (but not me) are able to cheat.
posted by anonymisc at 10:03 PM on December 19, 2012 [1 favorite]

I had this happen recently, too. But the way it was presented to me, my agent pointed out that to collect from my insurance company, I'd have to pay the deductible up front (obviously, as that's what a deductible is); whereas if I collected straight from the at-fault party's company, it might take longer but I wouldn't be anything out of pocket for any amount of time. I opted for that.

I don't think this is unusual or scammy. You can always go back and file with your company if you run into trouble with the other, can't you? I'm not sure what you mean when you say your carrier will be "off the hook."
posted by torticat at 10:11 PM on December 19, 2012

THis is not a scam or unusual. If you try it, and after some reasonable amount of time (One week?) it looks as if it is going to be a PITA, just file with State Farm and let them take over.
posted by JohnnyGunn at 10:34 PM on December 19, 2012 [1 favorite]

Nthing everyone above.

I went through the other party's carrier directly, but called my agent often for advice and to intervene occassionally. My situation was WAY more complicated than yours, but it worked out in the end.

MAKE SURE THEY PAY FOR RENTAL ASAP.

The other carrier calls the rental place, and arranges payment. You get to drive the rental until your car is totaled and the other carrier picks up your old car from whatever garage it is hanging out at.

This is a little sticky because it is a front end collision, but hopefully, they won't deduct and perecntage of fault from your settlement. That's why you want awesome advice and a favorable accident report on your side.

Good luck.
posted by jbenben at 10:56 PM on December 19, 2012

This sounds weird and possibly sketchy to me.

Last time I got hit, like you I had a police report (in my case, it was a hit-and-run driver); I filed with my insurance (also State Farm, but I'm in Virginia); they covered all costs and never charged me any deductible in the first place, so there was no 'delay' getting re-payment for that.

If it was me, I'd turn down your agent's suggestion; you pay them to deal with the other insurance company, so why should you pay them AND do the work yourself?!? Flie your claim, and after this is all settled, get another insurance agent.
posted by easily confused at 3:29 AM on December 20, 2012

I had a similar issue a couple of years ago. I talked to a friend who was an insurance agent and found out that agents get a bonus at the end of the year based on how little is paid out in claims for the year. If you file a claim with your agent then he will loose part of his year-end bonus, if you file with the other insurance company it won't affect your agent's bonus.

It is a crappy thing for you agent to do and I when my insurance agent did it I immediately found a new insurance agent.
posted by Broken Ankle at 4:19 AM on December 20, 2012

The upside is that you are not filing a claim against your insurance. Insurance companies rate you against whether you file claims or not regardless of fault. SO if you want to deal with everything yourself and maintain a clean insurance record, file with the other person's insurance company. If you don't want to deal with it, file with your company. But you might lose any "no claims in X years" discounts you might have.
posted by gjc at 5:11 AM on December 20, 2012

So to sum up, it seems like there's no simple answer, which is OK. I'm reassured to hear that other people have had the exact same experience and that it's worked out in each case when people followed that route.

Thanks, everyone!
posted by Ickster at 5:14 AM on December 20, 2012

I also have Geico and tried to go directly to the insurance company of the person who had hit me, but it turned into a mess because their car was a rental, and not in their name, and etc., etc. I went back to Geico and they did indeed take over the dealings and get it resolved.
posted by SampleSize at 7:49 AM on December 20, 2012

I've had overwhelmingly positive experiences with my State Farm agent and would generally trust him on this type of thing. It's why I use an Agent rather than just going with one of the insurance companies w/o the middle man. He's gone to bat for me with State Farm in the past, in ways that certainly cost the company money.

Agents would seem to have an incentive to be honest. State Farm won't punish the agent if you file a claim. On the flip side, if he/she gives you terrible advice and you get screwed, you'll leave the agent and they'll lose money.
posted by pjaust at 9:26 AM on December 20, 2012

There's a middle path you can take. I was in a situation one time where an extremely elderly woman turned left very slowly...straight into the front of my waiting, stationary car. So it was entirely her fault, yet she nonetheless made lots of noise on the spot about how her husband's a lawyer, she didn't do anything, etc. But I got her insurance information and she got mine.

I immediately filed an informational claim with my insurance company to let them know what actually happened, in case this woman decided to file a claim with them. (To my knowledge, she never did—it was all bluster.) Then I asked my claims representative what I should do. She hemmed and hawed a bit and said that she couldn't provide legal advice, but basically suggested that I would do best to file a claim directly with the woman's insurance company—otherwise the repair would likely be within my deductible, and I'd have to pay for it.

So I called her company and filed a claim. Her company told me to go to X body shop to get an estimate and arrange for a rental car and repairs. I did so, the body shop set me up with a rental car and a repair appointment, and they said they'd fax information about the damage to the car and the bill to her insurance company. The next we heard from her insurance company, I seem to recall, was actually after the repair had already been made and we thought everything was resolved—yet they'd sent a letter denying my claim because of "prior damage" to the front end of my car, which was apparently discovered in the course of the repair.

Well, I was unaware of any such prior damage, and it turned out to be minor, as well as something that hasn't actually been fixed in the course of the repair. Nor had the body shop billed for such a repair—it had just provided an estimate of what it would cost to fix the other damage at the same time. Nor was I asking her insurance company to pay to repair whatever it was; I simply wanted the damage done by this woman to be fixed, and it had been. The other information in the body shop's report was totally irrelevant to my claim.

At that point, I got back in touch with my insurance company, explained the situation to my claims representative, and asked for her help in explaining it to the woman's insurance company. And my claims rep was awesome—she put me on hold, called up the other insurance company, then brought all three of us together on the line and double-checked that we were on the same page in terms of the desired outcome. Her insurance company paid the bill, I didn't have to pay a cent, and the matter was completely resolved.

So just a heads up, if you go it on your own with the other person's insurance company and don't get the result you expect, you should definitely be able to get back in touch with your own insurance company for help and representation!
posted by limeonaire at 4:58 PM on December 20, 2012