Customers no doubt wonder what their rights are when the...

In this month’s article, I would like to shed some light on this subject.

Imagine you are returning from a shopping trip and you strike a deer which has run out in front of you. Your vehicle is smoking on the side of the road and not drivable, you are shaken-up and you think to yourself it will be fine, after all, I have been paying my insurance for 20-years and surely they are going to take care of this so there shouldn’t be a problem.

You have your vehicle towed to your chosen shop for repairs, only to find out that your insurance is refusing to pay to have your vehicle repaired back to its pre-loss condition in appearance and safety. Well, now there is a problem and what will you do? The first step is to understand the insurer’s responsibilities to you. I will attempt to shed some light on this.

Insurance contract

A contract of insurance or “policy contract” is basically an agreement between two parties creating legal obligation/duties for both. Each party is legally and contractually bound to perform the specified duties (as outlined in the policy contract), such as rendering a payment or delivering goods and services.

In order for the contract to be enforceable, each party must exchange something of value (“valuable consideration”), such as the named insured paying their premiums on time in exchange for continued insurance coverage and peace-of-mind regarding the benefits (economic and asset protection) owed in the event of a covered loss.

Generally, an insurance policy/contract is known as an “adhesion contract,” where the insurer determines the policy language (promises, duties and exclusions) and the consumer either purchases it as written or not. There are no negotiations as to the terms of the policy. The only modifications will be the addition of excluded drivers, types of coverage such as rental, optional accessories, the limits (levels) of coverage chosen and provided for, and the types of coverage as well as those declined. These definitions, positions and mandates vary by state.

It is very important to read your policy before you sign it!! Most insurers have in their contract that they can use alternative parts on your vehicle that will not match OEM standards, there is no arguing this because you signed it.**“When an insurer representative fails to fully ascertain the full extent of all loss-related damages, and/or fails to provide proper consideration for each necessary process, part and/or material, the failure can be defined as either: ignorance, gross incompetence or intentional misrepresentation (or a combination thereof).”

As one can see, in a first- or third-party claim, any of the aforementioned events could be found to be a breach of contract or failure to act in good faith by the insurer.

Summary

It’s important for all to know that insurance claims people and collision repair professionals are placed in a position of public trust, and the unwary consumer often relies upon expert professionals to do the right thing and protect them in their time of need.

The medical profession has the Hippocratic Oath, where a new physician swears to uphold long standing professional ethical standards and to “do no harm.” This pledge also strongly binds the student to his teacher and the greater community of physicians with responsibilities similar to that of a family member.

The collision industry would do well to develop a similar oath and abide by it when serving their industry and their one and only true customer: the vehicle owners and their families.