Auto Insurance Claims/Subrogation question
Hello. I hope you can assist me with an auto insurance question.
Eight months ago, my car was struck as I was pulling into my own driveway. The other driver sideswiped my car and then crashed into my backyard fence. My insurance carrier referred me to a an auto body shop and required me to pay a deductible for repairs. I did not have the money for this out of pocket. I stressed this to my carrier. My carrier then instructed me to independently pursue a claim with the other carrier. So I did. After an investigation, they found fault with the other driver (he had a suspended license and had borrowed a friend's car). I went back to the repair shop, the carrier made a check out to them and began work on my car. At this time, I then received a check, made out to me, personally, from MY carrier. I assumed this to be for fence damage as I have this carrier for homeowner's too. I deposited it in the bank, and made repairs to my back yard. I just now, months later, received a call from my carrier seeking me to return the money they gave me back, saying I can not collect from both carriers. I understand that in theory, but I only did what they instructed me to do, and the money has been long spent. I say the error is theirs and a matter for them to correct internally with their own claims processors. I don't have the money to give back at this time, even if I wanted to do so. What are my rights here?
ANSWER: Hello Joseph,
Under Property Damage Liability, the carrier that accepted responsibility should have paid for the damage to your car PLUS the damage to your fence.
Since this was obviously not the case, let's try to sort this out.
First, was there any type of appraisal done on the fence? By which carrier? Did the liability carrier even know about the damage to the fence?
Second, did your carrier appraise the damage to the fence?
Finally, did either carrier provide you with an estimate for damages to your fence?
It appears to me that you received payment twice for the damage to your car. Yes, that was apparently a mistake on the part of your carrier. Although it would have been a good idea for you to have contacted them before cashing the check. In a worst case scenario, they could demand the refund. But there are other alternatives you should pursue.
The fact remains, you are entitled to receive compensation for the damages to the fence. Hopefully you have the receipts for the repairs. I suggest you contact the liability carrier and re-open the claim for the damages to your fence, using your repair receipts (and hopefully photos) as the basis. Hopefully they will honor your claim, although they may balk at not being able to inspect the damage - assuming they did not appraise it at the time.
As for your own carrier, you do have a problem. They are correct that you cannot receive payment for the same damages from both insurance companies. But what about the Homeowner's coverage? Did you file a homeowner's claim? Even if the payment could be "applied" to that coverage, you would still owe a deductible. Theoretically, however, if your Homewner's coverage applies to these damages your carrier could pay for those damages and then subrogate the liability carrier for that payment including your deductible.
What you need to do is to work with your carrier. If Homeowner's is not applicable for some resaon, perhaps you can persuade them to allow you to pay them directly from the proceeds for the damage payment from the fence.
Right now your best bet is to work with both insurance companies to attempt to resolve the problems. You might suggest that they work together to that end, though neither would be obligated to do that unless there was a subrogation to reimburse a Homeowner's claim.
Strictly speaking, the liability carrier is responsible to pay for your damages, although you should be prepared for some resistance. As for your own carrier, the fact remains that as of now you owe them the money back. But I suggest you pursue the Homeowner's coverage if the other carrier will not cooperate.
Read your policies. Determine precisely what those policies cover. Then proceed to find a better alternative than what currently exists.
---------- FOLLOW-UP ----------
QUESTION: Many thanks, Jane!
That is indeed fair and honest advice.
In hindsight I should have sent my carrier's check back, but at the time, I was doing as instructed in working with the liability carrier. My carrier's check was made out to me personally, not the auto repair shop. I assumed (mistakenly) that I was entitled to that as part of the overall compensation including homeowners, saw no reason to question it, and put it in the bank.
I gave my homeowner's number to my carrier's claims agent, I assumed that to be included in consideration of the overall incident.
To be honest, I forgot all about it. Until getting a call now, eight months later. I feel entrapped.
I guess my follow-up question, in closing, would be: legally, since the check was made out to me personally, and I was working with the liability carrier as instructed, and the error is no my own, do I have a right to refuse this subrogation attempt on me?
Thank you so much!!
Hello again Joseph,
Glad I could be of assistance.
This isn't actually a subrogation as that is an action between insurance companies. At this point in time, your carrier is demanding a return of the money. But, again, I believe you have other options, and I think they have an obligation to work with you to find the coverage you are entitled to.
But assuming everything fails (which I don't think will happen if you work diligently to correct this mess) you cannot "refuse". In a worst case scenario, they could sue you. That would genuinely damage your insurability not to mention your credit.
Don't focus on refusing. Instead find the solutions.
Again, good luck!