Ooh, a thread I may actually know something about!
I work in the auto liability claims field, specifically, third party liability claims. My employer is the biggest auto insurer in the US not employing Flo, or using good hands, or involving themselves with state farms. My ultimate boss has often been referred to as an oracle. That out of the way, my opinions do not necessarily reflect those of my employer, I am not your auto liability claim adjuster, I am not licensed to adjust claims in New Mexico (which I believe requires all P&C adjusters to be licensed), etc etc. I am licensed in the four New England states which require P&C adjuster licenses, so my technical knowledge is roughly limited to the states I handle.
That said, I believe the OP’s original dilemma may be solved by the simple “statute run” defense. I wouldn’t put it past some shady attorney for the rental company to try to argue that since the claim was not adjucated, though presented, within the New Mexico PD statute of 4 years, that technically they are still with standing to present this claim. That’s what you have your insurance carrier to defend.
Case law, with some state-specific exemptions, has generally held that the generic “diminution of value” claim has merits. The problem though is that it’s an extremely difficult claim to prove. The burden of proof, as in all liability claims, is on the claimant. How can they prove, not just demand, that your damaging their rental vehicle 8 years ago somehow caused a financial loss to the company when they went to sell their old fleet vehicles 4 years ago?
I can’t speak for your insurer (unless they’re my employer, in which case my words aren’t official anyway), but generally speaking, when I am presented with a diminution of value claim - and these are nearly always presented by fleet companies (i.e. rental companies, leasing pools that provide vehicles for XYZ Corp.'s employees to use, taxi companies, and the like) - we have a very specific set of guidelines and requirements that the claimant must meet. And even then there’s absolutely no guarantee their claim will net them one cent. Because the burden of proof is set so high, industry-wide, most companies simply drop it and cease pursuit.
All the above advice, to simply refer the rental company to your insurer, is exactly right. They have the obligation to defend you to the extent of your policy limits, and one question I haven’t seen answered here is the simple question: was the rental company’s actual physical damages claim near or over your property damage liability limits? If so, my company as SOP requires the claimant to sign and have notarized a Property Damage release releasing you, us, your firstborn, your lienholder, your spouse, etc from any further claims as a result of this settlement. If they did, and your carrier can dig that up from their claim file, you are golden.
(Regarding the post above whereby the poster stated that SOP for all carriers is to have claimants sign releases regardless, this is typically only true for bodily injury claims. Joe Sixpack, who owns the 1978 Pinto that you rearended causing the rust spots to flake off, doesn’t have to sign a release to get his check for $74.92 in damages, nor does the wording on the property damage check itself suggest that the check is full and final settlement for all claims resulting from this date of loss. If that were so, what would poor Joe do if when his body shop went to reapply the rust, and found more damaged rust below the original rust layer, caused by you? There are often supplements for property damage once the vehicle is in the shop for repairs, while there are never supplements for bodily injury.)
As to their loss of use claim, technically this is a loss of business/rental income claim. The terminology is similar to your generic LOU claim (you busted my car, now I need a rental to get to work), but the requirements to sustain and prove this claim are different. A previous poster essentially alluded to this earlier, but basically the company has to prove to me that
- they sustained a loss (duh);
- this loss caused a negative effect in servicing their business needs;
- there were no other vehicles in the fleet that could be substituted to negate this effect.
Ever seen a fleet utilization report from Big Honkin’ Rental Company, listing all the vehicles within that particular market sector? Probably not because most companies don’t want to take the time to generate it, and even when they do we nearly always find something along the lines of “hey, I see you had a surplus of vehicles over at your Hartford location, which is only 6 miles from your Bumfck branch which you are claiming sustained this loss, and the Hartford branch carried this surplus for, gee whiz, the same days your Bumfck branch vehicle was in the shop.”
These are the proofs your insurance company is seeking from the rental company. I can guarantee you the rental company either doesn’t have any of the paperwork required, or can’t be bothered to jimmy something up because they know some carriers will roll over and pay, as a customer service and/or protect their insured to settle and avoid a lawsuit. My company typically makes the claimaint, you know, prove their claim. And if they take you to court, we will defend you on our nickel (because it’s our money that will be paid out if you lose, within your PD limits).
Hope this helps, and always happy to answer (or attempt to) general questions about auto liability and the auto claims process.
drew