I ran into the back of a rental car a couple of years ago. It was a very minor fender bender and my insurance company paid for the damage to my car and more than they wanted to for the damage to the rental car. Now the rental car company is claiming fees due for “diminuation in value” ($2600) and “loss of use” ($719). My insurance company balks at these fees and says they should not have to pay them. Meanwhile, the rental car company is harassing me on the phone and by mail, saying they’re going to turn it over to a debt collector and ruin my credit if I don’t pay up. The insurance company says they shouldn’t be contacting me at all.
You probably have something in your policy about your insurance company protecting you from things like that. If it comes down to it, your policy probably states that they have to supply you with a lawyer to defend you.
I have an insurance company supplied lawyer defending me against a (false) personal injury claim. I agree that the company should not be contacting you. You have insurance for that and tell them to contact the company.
You could just tell them to shut up and file suit if they mean it (not legal advise). Your insurance company should be liable for everything associated with such a suit.
While I have worked in auto insurance claims, it’s been a while, I don’t know the laws of your state, blah blah blah. (does that cover the disclaimers?)
Loss of use is a standard thing asked for by car rental companies and they are allowed to collect it in most places. (check your rental agreement, it might be mentioned there). Diminished value is harder to quantify in many cases and I haven’t seen it paid that often. That’s not to say that they’re wrong for asking for it, just that they might not get it.
As far as them calling you directly, that is very bad form. If they call you again, advise them to contact your insurance company.
I’d wonder what the terms of the settlement your insurance company made were - I’d expect it to say that the settlement was final. I know rental companies like to charge renters who get in accidents for loss of use, etc., but you have no contract with them. I’m not aware of people whose cars get damaged asking for this sort of settlement, so there is no reason they deserve it.
I’d also record the frequency and times of these calls. I wonder if this falls under harassment?
They are allowed to claim loss of use for any time their car was being repaired and thus not available to be rented to others. That doesn’t apply with private individuals.
Another thing I thought of, you said it was a few years ago. Do you know what the statute of limitations in your state is? If it’s past that time they don’t have a claim left. Or if it’s coming soon and the settlement hasn’t gone through, they’ll likely file suit to protect the statute.
Whether or not you’re responsible for this debt, under the Fair Debt Collection Practices Act, you are entitled to demand that they cease contacting you in an effort to collect it:
With regard to the last sentence, I’d send your Cease and Desist demand via Certified Mail.
Now, wrt to the claim itself, I just phoned my insurance agent and she said that there’s a statute of limitations on filing any claims against you – one year to file any physical damage claim and 2 years to file bodily injury. Since they’ve already settled with you for damages, and didn’t invoke this claim at the time of the original claim they cannot legally pursue this any further.
She said that if you want their address to send a Cease and Desist letter, to pretend that you’re going to send a payment, otherwise they’ll never give it to you. If it were me, I wouldn’t say it quite like that, since they sometimes record these calls and might try to use it against you, but I’d say something to the effect of, “If I were going to make a payment on this account, to what address and to who’s attention should I send it?” She said to then refer them to your insurance agent, who is responsible for handling this on your behalf, and not accept any further calls from the rental agency – just hang up on them every time they call. And if they don’t stop calling, you can file criminal harrassment charges against them.
If the accident was to a car that JillGat had rented, with a contract, there would be no issue. Remember, however, that the rental car was not hers, so she has not contractual obligation to pay for loss of use. I don’t see how the rental car company would have any more standing than a private individual. If they had sued, and a judgement awarded, that would be something else - but any private individual could sue also.
I did misread that bit about the other car being the rental, but LOU, in my experience as a claims adjuster, can still apply. And of course, they shouldn’t be coming after her now, I was just explaining why LOU applies to rental companies and not to most private individuals.
Really, the specifics of this vary radically between state to state. Wyoming has case law, jury instructions and legal code effectively saying “nuts!” to Loss of Use unless a vehicle was actually rented as the temporary replacement. Other states grant it with equal vigor irrespective of the actual loss sustained. BUT. With regard to the blood-sucking rental agencies:
The rental agency does not use the vehicle for private company business, and therefore did not have to acquire a replacement vehicle while their car was being repaired. The vehicle IS used by the rental agency to meet the demands of customers, however. Its down time may have led to a loss of income for the rental company. For you to be responsible for this lost income, the rental company must demonstrate that it had no other similar vehicles available for rental during the period in which the car was being repaired. Follow me? You or I would have a valid Loss of Use claim because we use our cars on a daily basis for our own personal transportation and can not conduct our normal daily business without it.
Diminished Value is virtualy impossible to justify as well. If the rental agency still owns the car they certainly have nothing to base such a claim on–how do they know what the vehicle’s value is if they still own it? There is no standardized and accepted method of devaluing a vehicle which has been properly repaired with parts, often in NEWER condition than those removed. A case could just as easily be made that they owe the insurance company for betterment–that rear bumper has 30,000 fewer miles and newer paint on it than the rest of the car!
I’ve never seen a diminished value claim paid, and never seen a loss of use claim paid to a rental agency–except once. And that one time the agency was able to provide a list of its entire local inventory and to whom each car was rented. They actually presented a believable case supporting loss of income from that one car’s absence.
In order for you to be in a position where you owed the rental agency anything, they have to demonstrate the debt. Otherwise you could just as easily turn around and bill them for for the income you lost because you missed a promotion at work because your work product suffered as the result of their pestering you.
They need to discuss this with your insurance company. Give their information to your insurance company. If they circumvent your insurer and do you with collections and damage your credit by trying to collect a debt they have not demonstrated you owe, then they are truly in deep doo-doo and have set themselves up for defamation/personal injury at the very least. And then you can screw them six ways to Sunday with punative damages that are limited only by a judge’s wrath.
Inigo, it’s always interesting to hear how other states handle insurance matters. Something like this shows how specific local information is needed to evaluate a situation. Thanks for sharing your experience and knowledge of WY law, I always like to learn.
only applies to debt collectors–those who collect the debt of another. If it is the rental car company place calling, the FDCPA won’t help. State law might.
Depends on the state.
Depends on many things. State law, whether there was a release, and what the release said, for starters. JillGat, what state are you in?
Every insureance check I have ever been near has had a release either attched which had to be signed before the check was turned over, or wording on the check that cashing it acknowledged that the claim was paid in full.
I always thought this was SOP with every insurance company.
Turn this over to your insurance company. They can proabably make it go away real quick. If not they owe you right of defense.
This is what my insurance company is saying. They have asked the rental car company to provide evidence of diminished value and proof that they didn’t have other cars available to rent. The company hasn’t provided any of this information, so my insurance company refuses to pay them. They also promise to defend me against them, if it comes to that. I’m in New Mexico.
JillGatwas not renting the car that was damaged, so their little contract and clauses don’t apply to her. It’s a strict insurance/liability question; not a contract question.
So really the question can ignore the fact that the car damaged belonged to a rental company. It could have belonged to any industry that needs a car to make a living – Molly Maids, let’s say. So, if you’re liable for damages, are you also liable for loss of value and loss of use? Heck, substitute “widgets” for “car.”
Those agencies would be helpful only if I had complaints about my insurance company. The issue is the rental car company contacting me directly and threatening me with debt collectors. They should be dealing with my insurance company, because my insurance covers the costs of any damages that they can show they’ve suffered. So far, the rental car company has not responded to requests that they provide that information.
Well if your state has some sort of anti-harassment laws with penalties, and you can document this harassment, you may be able to turn the tables on them and extract some cash from them for this illegal (assuming it’s illegal) harassment.
Here’s my take on the OP.
There are two separate issues here. The loss claim that your insurance company is
responsible for, up to the terms and limits of your policy, and the issue of the rental
car company trying to collect directly from you.
Your insurance company may try to help you w/ the second problem, in the vein of
good customer relations, but I don’t see where they have any legal obligation to do
so.
If the rental car company’s actions damage you in some way, you may have a cause
of action against them, but that’s going to require that you consult your own attorney
and pursue it separately from the accident case.
