Auto Insurance Problems

I recently spoke to a Buick Collectors club here in Cleveland, Ohio, about car insurance.  They asked me to write up a short summary of the points of my speech for the members who were not able to make it; below are the main points. It must be said that not all insurance companies do these things, but that some do.

First, if you are in a collision and your insurance company defends you, you are ordinarily entitled to reimbursement for the time you spend defending yourself, as well as any expenses you go through. Some companies have not been reimbursing their customers when they are supposed to.

Second, when a part of your car is replaced and paid for by the insurance company, the insurance company can reduce what they pay by the amount that the part is worn out. For example, if 40% of your tires are worn, the insurance company will only reimburse you for 60% of the cost of new tires, since you already got 40% of the use of the tires. However, some insurance companies are also applying this to the cost to install the new part, only paying 60% of the labor fees for installing the new tires. They then tell the customer that they have to pay the other 40%. Insurance companies are ordinarily required to pay the full cost of labor.

Third, if your car needs to be painted, there are specific steps that auto body shops have to go through in order to paint your car correctly. One of these steps – deburring – occurs at the end. Some insurance companies have been telling auto body shops to skip this step, which means the insurance company doesn’t have to pay for it. They cannot do this – they must pay for the full paint job.

Fourth, if your windshield is cracked or chipped, some insurance companies have been paying for them to be repaired. You are ordinarily entitled to receive the amount it takes to repair your windshield.

Fifth, “stated amount auto insurance.” When one buys Stated Amount insurance, the expectation is that the extra premium payments are in exchange for receiving the “stated amount” if and when the insured car is totaled. However, Stated Amount insurance contracts often have provisions stating that the insurance companies will pay the lesser of the stated amount or the Actual Cash Value (ACV) of the vehicle. If the ACV is lower, then they pay the ACV; if the stated amount is lower, they’ll pay the stated amount. Stated amount insurance only benefits the insurance company. If you paid for this “coverage,” you may be entitled to a refund.

If you have any questions about these issues, please contact Andrew Samtoy or call (866) 964-1806.