If a motor vehicle crash was someone else’s fault, you are entitled to payment for any damage done to your vehicle. You are also entitled to compensation for any damage to personal belongings in the vehicle. There are three types of insurance coverage that typically pay for a property damage loss. The types of insurance are as follows:
1. Liability coverage under the other owner’s policy. Initially, insurance coverage runs with the vehicle, not a person. For example, if I lent my car to a friend and he caused a crash, my insurance would cover the damages, not my friend’s insurance policy.
If the other vehicle owner’s insurance company accepts fault in your crash, they will more often than not concede liability and perhaps pay a fair amount to have your vehicle repaired. Unfortunately, insurance companies often take weeks and sometimes months to decide to accept fault in a given crash. This is despite Vermont’s insurance regulations, which I include at the end of this blog. Therefore, there is always a possibility your vehicle will not be repaired or you will receive a check for a total loss in a timely manner.
Under Vermont’s regulations, you are entitled to a reasonable rental car payment. However, many times you will have to pay for the rental car and then expect to be reimbursed by the other driver’s insurance company. They do not always pay fair market rate, even though the regulations dictate that they should.
2. Collision coverage under your insurance. Using your insurance coverage is usually the fastest way to get your vehicle fixed. Your vehicle repairs (or payment if the vehicle is a total loss) will be paid by your own insurance company regardless of who is at fault in the crash. You pay the deductible, which will be returned to you if the other driver’s insurance company repays your insurance company. This is called subrogation and is something that normally occurs where liability is clear.
3. Uninsured motorist coverage under your insurance. If the other vehicle is uninsured or is unidentifiable because it was a hit and run crash, you are protected under your insurance policy’s uninsured motorist coverage. Depending on the type of crash and insurance policy, you may be responsible for paying a deductible.
Vermont’s regulations regarding insurance claims are outlined in Regulation 1-79-2 (Revised effective 7/1/18), Fair claims practices. The pertinent section dealing with insurance settlements is listed below:
Section 7. Standards for Fair & Equitable Settlements
A. If an insurer denies a claim in whole or in part, it shall provide claimant with appropriate reasons therefore, including reference to applicable policy provisions, conditions or exclusions.
B. All claim payments shall include an appropriate explanation of the basis of the payment (example, full explanation of all deductions for depreciations, deductibles or coinsurance).
C. All insurers who do not maintain a claims office or offices in Vermont shall provide claimant with toll-free telephone number of the representative handling the claim for claimant’s retention.
D. Where liability has become reasonably clear, an insurer is prohibited from withholding payment under one portion of a liability claim in order to influence settlement of another portion of a liability claim.
Section 8. Standards for Settlements of Property and/or Physical Damage Claims
A. Adjustment of Partial Losses Applicable to Physical Damage Claims
1. If requested, insurer shall furnish claimant a copy of the completed appraisal or estimate specifying all deductions.
2. If the claimant chooses to select repairer, insurer shall make every reasonable effort to reach an agreed price with the repairer.
3. If insurer insists that repairs be done by a specific repairer, said insurer shall guarantee all work performed by said repairer.
4. Insurers shall not require a claimant to travel unreasonably either to inspect or to obtain a replacement of the damaged property or motor vehicle or to obtain a repair estimate.
5. Insurer shall advise claimant of and pay for all known hidden damages attributable to the accident or loss.
6. Matching of Exterior and Interior Partial Losses. When a covered loss requires the replacement of an item or items and the replacement item or items do not match adjacent items in quality, color or size, the insurer shall replace such items with material of like kind and quality so as to conform to a reasonably uniform appearance within the same line of sight, taking into account natural breaks. The insured shall not bear any cost over the applicable deductible, if any.