Expert: Claims Guy - 8/10/2011

Question
QUESTION: Our RV tow car was rear ended and totaled by our insurance co. We had neglected to add the tow equip. as a modification but our ins co gave us $500 for it. However, it was 6 months old and cost us $2000 to have it installed, both on the old and the new replacement car. The other party's insurance co. is responsible and only agreed to pay the $500 to reimburse our ins. co. Is there anything we can do to collect the remaining $1500?

ANSWER: Yes.  You should make a claim with them directly for the full cost that your insurer did not cover.  Explain this was due to a policy limitation.  the other insurer owes the full amount their customer was liable for.  If they deny, you can sue the other driver in small claims court, and the other insurer will have to defend.

---------- FOLLOW-UP ----------

QUESTION: I thought so but their insurer says since the tow equipment is a modification to the car, the $500 is all it added to the value of the car. Is this true?

Answer
Sorry, I misunderstood the first time.  When a vehicle is declared a total loss, they pay the market value of the vehicle.  This is the amount the vehicle would havesold for on the open market prior to the accident.

Parts of the vehicle adjust the overall value but do not increase it dollar for dollar.  So new tire or breaks add some value, but not the full cost of installing them.  What would a reasonable person pay for this vehicle with new tires or breaks?

So that is where they are coming from - they are saying it only added $500 value to the vehicle.

Now I'm not sure I agree with them on this.  You could make the argument that they damaged 2 items - the vehicle and the tow equipment.  In this case, they would owe you the value of the tow equipment on the open market plus the value of the vehicle.  How much would thew tow equipment sell for by itself?

I would try to make this argument.  Explain you can't buy a similar vehicle with attached tow equipment, so combining them is not fair.  If the claim rep won't budge, ask for his/her supervisor.  If this does not work, complain to the state insurance dept.  If this doesn't work, you can sue the other driver in small claims curt.  no guarantee this will work, but it's worth a try.

When arguing, be polite but firm.  Do not yell or make it personal - this will not help.