Two vehicles that are insured at the same company collided. One vehicle was 100% at-fault. The negligent party's adjuster won't pay for rental reimbursement beyond 30 days due to a delay in parts. The collision shop is the carrier's preferred shop. The not-at-fault insured used his own rental reimbursement for 30 days and is now responsible for the rental costs. The company says turning in the rental and filing a claim against the at-fault driver's policy isn't an option.  

Q: Should the negligent driver's policy pay for rental reimbursement beyond the 30 days listed in the policy? Is it legal to make the not-at-fault driver pay for the additional rental costs?

Response 1: Whether it's legal is a question for a lawyer. And for how much the negligent driver's carrier should pay can only be determined in court. I assume we're talking about a property damage liability claim and, if so, it is only obligated to pay what a court orders it to pay. The carrier's opinion of what's fair is obviously different than yours, but the only way to settle that argument is to bring it before a judge.

It sounds like you're on the side of the angels, so perhaps a memo from the insured's attorney would cause the other adjuster to see the light. Failing that, the only recourse is a property damage liability lawsuit. 

Finally, the insurer is under no obligation to pay any more for rental reimbursement than the amount provided in your policy. As much as they might be willing to help, they have no grounds for paying more than their limit and trying to collect the excess from the other carrier.

Response 2: The insurer should reconsider denying the claim for additional loss of use. The at-fault party has a legal obligation to the other for the reasonable costs of loss of use. Unless the repair delays become unreasonable—which is likely given the current supply chain challenges body shops are facing—the full cost is owed.

If the insurer won't pay, the client may ultimately have to file a claim in small claims court to get awarded the additional loss of use damages. When the insurer is insuring both parties and a preferred shop is being used, the insurer has an even greater duty to act in good faith—and it appears it might not be doing so. 

Response 3: In the past, I have reached out to the manager for some leeway, albeit with a ceiling on the rental. Beyond that, your only option is to contact your state insurance commissioner. That option will most likely be fruitless.

When the policy renews, seek alternative markets, if available. Sadly, this is where carriers suffer the consequences of public backlash due to no fault of the parties involved. This economic scenario needs to be addressed by carriers to foster trust from their policyholders.

Response 4: The at-fault driver's insurer should pay rental reimbursement for as long as it takes to get the other driver's car repaired. This should fall under property damage liability as loss of use. It should pay until the limit is exhausted. 

However, without seeing the policy, I don't know if that carrier has any limitation on what or how long they'll pay loss of use—for instance, the innocent insured's policy provides rental reimbursement with a daily and total limit.

As to whether it's legal, you could check with the insurance department or possibly your Big “I" state association. The innocent driver could also file a complaint with the insurance department.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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