Clark's auto insurance consumer headache resolved on clarkhoward.com

Several weeks ago, Clark told you that his wife was in an auto accident. While everyone involved was fine, he promised to report back about the challenges he was having with the other party's insurance company. They didn't want to pay and kept pushing Clark to file a claim with his own insurer -- a process known as subrogation. The problem with subrogation is that 2 insurers can cut a deal, leaving each driver with an at-fault accident on their driving record. In this case, there was no question that the other driver was the one who hit Clark's wife.

While the insurance struggles were going on, Clark and his wife were able to use a spare vehicle they have to get around. The insurers like to play a waiting game because they know that not everyone has more than one vehicle. So most people eventually roll over and just go the subrogation route. Clark was able to instead become politely persistent. He got on a first-name basis with the investigator and called every single day. On the 8th day, the other person's insurer agreed to pay for damage to his wife's car.

The game is to continually stall in the hopes that you'll eventually go to your own insurance company. Clark's just glad he didn't have to file suit in a small claims court against the other driver. But had he done so, their insurance company would probably have capitulated when they were faced with the expenses of a court date. In the end, you are your own best advocate.

What others are saying

No Fault Insurance State
Oregon is a no fault insurnce state so when I was in an accident the insurance companies work behind closed doors to get a settlement and you are tagged with a no fault accident even if the other driver is at fault. Saftco did refund part of my $500 collision deductible so the other party did get stuck with more fault for running into my auto.
By Martin @ 02/03/09 03:52:50 AMreport abuse
auto accident
I was in an auto accident last month and am in an identical situation to Clark's wife. I am wondering what Clark said each of the eight days to the other person's insurer that made them agree to pay for 100% of the damages?

Thanks.
By Helen Tray @ 01/15/09 04:24:10 PMreport abuse
Oh really, Mr. Hagen?
Your comment is quite interesting, sir. You ask that Clark "believe" you. Is there some question as to whether you should be believed?

Well now, you seem to base your logic on the idea that it is in the insurer's financial best interest to find a way keep people from getting fair treatment, what with those vast sums of money spent for just that. Sounds logical but if so, is it not just as logical that one might question the financial motives of "P.I."'s who take 25-35% on settlements? Since I'm using your logic there, I'd say you'd have to agree.

If an insurer pays anything for a liability claim, it means they conclude their insured is liable. The amount then offered is the amount the adjuster concludes is a reasonable amount to indemnify the claimant, inasmuch as money can do that. For anyone reading along, indemnity simply means putting you back where you were before the accident. While an offer to settle for general damages is only an offer, the claim will settle for a reasonable amount in line with what similar claims settle for.

Now read very closely because here's the kicker, folks: The presence or lack of a lawyer has nothing to do with indemnity.

What does that mean? It means the claim is not worth more just because an attorney represents you. So, for anyone considering hiring an attorney, do ask one question of that attorney. Who pays that 25-35% fee? Not the insurance company. It comes out of the settlement which is that amount needed to indemnify. This means, obviously, for smaller soft tissue injuries, the claimant nets less money if they are represented. An attorney MIGHT be helpful to the claimant in cases involving multiple insurance policies or excess damages or for anyone who would not mind getting less money in exchange for not having to deal with the claim. The attorney is NEARLY ALWAYS helpful to the adjuster because they do turn in those neat little packages of bills and reports. Very nice.

Exactly where lies the immoral greed, this blight on our society? This comment submitted merely in the interest of prompting people to think about it.
By Brian Whithers @ 12/21/08 12:22:13 AMreport abuse
Clark Stinks on this one continued
You say the insurance company would probably have "capitulated" had you filed a small claims action. Think about it Clark. If liability rests with the insured, the path to resolution of the file is to settle the claim. There is no capitulation. If the claim is owed, you settle for the damages. If it is not owed, you deny the claim. Liability does not change just because you're in court. The insured is liable or they are not.

But indeed the claimant is their own best advocate. They know what they saw, felt, heard, experienced in the accident. They know their own property and they know their own needs (such as if they would need a rental vehicle). If liability rests with the insured, reasonable damages are owed. It is reasonable that the claimant would claim for the loss of use of the vehicle (rental expense) just as it is reasonable that they should claim for the cost of repairs.

In this comment, I have spoken repeatedly about liability and what is owed. When an adjuster receives a new claim, they have to investigate that claim to determine coverage, liability, and damages - in that order. Sometimes, for whatever reason, the adjuster is not able to immediately resolve some part of that coverage investigation. It could be that the insured has not returned calls. It could be that the police department has not yet released the police report pending charges from the D.A.'s office. There are any number of reasons why completion of the investigation could be delayed.

Even so, while that investigation is ongoing, the claimant is responsible to take reasonable measures to mitigate their own damages. Filing with your own insurer and letting them subrogate is one easy way to do that.

Clark, I love the show and have learned much from you. I can't speak on the accuracy of things you say about mortgages, banking, etc. since I don't work in those areas but your advice in those areas seems helpful. But when it comes to insurance, Clark, you've said a number of things over the years that perpetuate incorrect ideas about insurance and are just plain wrong. Tort law is based on common sense as is 99% of insurance adjusting. Think about it.
By Brian Whithers @ 12/20/08 11:57:46 PMreport abuse
Clark Stinks on this one
Clark, there are several errors in what you're saying here. There aren't any "deals" cut between insurers when they subrogate. If both parties are "at fault", they would each be barred from recovery in a contributory negligence state. In a comparative negligence state, recovery would be reduced or barred depending on the law. Thus, subrogation would not be possible in a contributory negligence state at all. In a comparative negligence state, you would only be able to recover at most a portion of damages so filing with your insurer would be the only way you could recover for all of your damages. What one insurer does with rates has nothing to do with what another insurer does as a result of a claim.

You say insurers play a "waiting game". As an adjuster, I can tell you that is not the case. Adjusters are human beings, Clark. Like anyone else, we work and we go home. New files continually come in and no adjuster has any time or interest in waiting on anything. The purpose of everything I do in a file is to bring that file to completion so I can close it. There is no policy in place with my employer nor with any adjuster I know at any other company wherein anyone tries to wait out a claimant.

I can close a file much faster if the claimant does not use their own carrier. If they do, the adjuster at that insurance company must do all the same things I do and then (meaning more time passing) has to submit a subrogation demand to me for my review (again more time passing). Meanwhile, more files are coming in all the while.

You say the game is to "continually stall in the hopes that you'll eventually goto your own insurance company". How do you think any adjuster would prefer that? If a liability claim is owed, the amount owed is the same whether settled directly with the claimant or through subrogation.
By Brian Whithers @ 12/20/08 11:56:56 PMreport abuse
Auto Insurers Stalling on Property Damage Payments
I am a personal injury lawyer and see this type of thing every day. Fortunately you had the resources and ability to fight for justice. Auto insurers spend vast amounts of money to keep consumers from getting fair treatment in auto wrecks, which unfortunately creates a need for P.I. lawyers like me. Believe me, I'd be much happier if insurance companies just treated people fairly, but they are inherently incapable of doing that. Their blind devotion to greed at the expense of the individual is immoral and a tremendous blight on our society. Congratulations to you on your triumph, small that it was.
By Bruce Hagen @ 10/30/08 11:24:40 AMreport abuse

No Fault Insurance State

Oregon is a no fault insurnce state so when I was in an accident the insurance companies work behind closed doors to get a settlement and you are tagged with a no fault accident even if the other driver is at fault. Saftco did refund part of my $500 collision deductible so the other party did get stuck with more fault for running into my auto.

By Martin @ 02/03/09 03:52:50 AMreport abuse

auto accident

I was in an auto accident last month and am in an identical situation to Clark's wife. I am wondering what Clark said each of the eight days to the other person's insurer that made them agree to pay for 100% of the damages?

Thanks.

By Helen Tray @ 01/15/09 04:24:10 PMreport abuse

Oh really, Mr. Hagen?

Your comment is quite interesting, sir. You ask that Clark "believe" you. Is there some question as to whether you should be believed?

Well now, you seem to base your logic on the idea that it is in the insurer's financial best interest to find a way keep people from getting fair treatment, what with those vast sums of money spent for just that. Sounds logical but if so, is it not just as logical that one might question the financial motives of "P.I."'s who take 25-35% on settlements? Since I'm using your logic there, I'd say you'd have to agree.

If an insurer pays anything for a liability claim, it means they conclude their insured is liable. The amount then offered is the amount the adjuster concludes is a reasonable amount to indemnify the claimant, inasmuch as money can do that. For anyone reading along, indemnity simply means putting you back where you were before the accident. While an offer to settle for general damages is only an offer, the claim will settle for a reasonable amount in line with what similar claims settle for.

Now read very closely because here's the kicker, folks: The presence or lack of a lawyer has nothing to do with indemnity.

What does that mean? It means the claim is not worth more just because an attorney represents you. So, for anyone considering hiring an attorney, do ask one question of that attorney. Who pays that 25-35% fee? Not the insurance company. It comes out of the settlement which is that amount needed to indemnify. This means, obviously, for smaller soft tissue injuries, the claimant nets less money if they are represented. An attorney MIGHT be helpful to the claimant in cases involving multiple insurance policies or excess damages or for anyone who would not mind getting less money in exchange for not having to deal with the claim. The attorney is NEARLY ALWAYS helpful to the adjuster because they do turn in those neat little packages of bills and reports. Very nice.

Exactly where lies the immoral greed, this blight on our society? This comment submitted merely in the interest of prompting people to think about it.

By Brian Whithers @ 12/21/08 12:22:13 AMreport abuse

Clark Stinks on this one continued

You say the insurance company would probably have "capitulated" had you filed a small claims action. Think about it Clark. If liability rests with the insured, the path to resolution of the file is to settle the claim. There is no capitulation. If the claim is owed, you settle for the damages. If it is not owed, you deny the claim. Liability does not change just because you're in court. The insured is liable or they are not.

But indeed the claimant is their own best advocate. They know what they saw, felt, heard, experienced in the accident. They know their own property and they know their own needs (such as if they would need a rental vehicle). If liability rests with the insured, reasonable damages are owed. It is reasonable that the claimant would claim for the loss of use of the vehicle (rental expense) just as it is reasonable that they should claim for the cost of repairs.

In this comment, I have spoken repeatedly about liability and what is owed. When an adjuster receives a new claim, they have to investigate that claim to determine coverage, liability, and damages - in that order. Sometimes, for whatever reason, the adjuster is not able to immediately resolve some part of that coverage investigation. It could be that the insured has not returned calls. It could be that the police department has not yet released the police report pending charges from the D.A.'s office. There are any number of reasons why completion of the investigation could be delayed.

Even so, while that investigation is ongoing, the claimant is responsible to take reasonable measures to mitigate their own damages. Filing with your own insurer and letting them subrogate is one easy way to do that.

Clark, I love the show and have learned much from you. I can't speak on the accuracy of things you say about mortgages, banking, etc. since I don't work in those areas but your advice in those areas seems helpful. But when it comes to insurance, Clark, you've said a number of things over the years that perpetuate incorrect ideas about insurance and are just plain wrong. Tort law is based on common sense as is 99% of insurance adjusting. Think about it.

By Brian Whithers @ 12/20/08 11:57:46 PMreport abuse

Clark Stinks on this one

Clark, there are several errors in what you're saying here. There aren't any "deals" cut between insurers when they subrogate. If both parties are "at fault", they would each be barred from recovery in a contributory negligence state. In a comparative negligence state, recovery would be reduced or barred depending on the law. Thus, subrogation would not be possible in a contributory negligence state at all. In a comparative negligence state, you would only be able to recover at most a portion of damages so filing with your insurer would be the only way you could recover for all of your damages. What one insurer does with rates has nothing to do with what another insurer does as a result of a claim.

You say insurers play a "waiting game". As an adjuster, I can tell you that is not the case. Adjusters are human beings, Clark. Like anyone else, we work and we go home. New files continually come in and no adjuster has any time or interest in waiting on anything. The purpose of everything I do in a file is to bring that file to completion so I can close it. There is no policy in place with my employer nor with any adjuster I know at any other company wherein anyone tries to wait out a claimant.

I can close a file much faster if the claimant does not use their own carrier. If they do, the adjuster at that insurance company must do all the same things I do and then (meaning more time passing) has to submit a subrogation demand to me for my review (again more time passing). Meanwhile, more files are coming in all the while.

You say the game is to "continually stall in the hopes that you'll eventually goto your own insurance company". How do you think any adjuster would prefer that? If a liability claim is owed, the amount owed is the same whether settled directly with the claimant or through subrogation.

By Brian Whithers @ 12/20/08 11:56:56 PMreport abuse

Auto Insurers Stalling on Property Damage Payments

I am a personal injury lawyer and see this type of thing every day. Fortunately you had the resources and ability to fight for justice. Auto insurers spend vast amounts of money to keep consumers from getting fair treatment in auto wrecks, which unfortunately creates a need for P.I. lawyers like me. Believe me, I'd be much happier if insurance companies just treated people fairly, but they are inherently incapable of doing that. Their blind devotion to greed at the expense of the individual is immoral and a tremendous blight on our society. Congratulations to you on your triumph, small that it was.

By Bruce Hagen @ 10/30/08 11:24:40 AMreport abuse

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Feb 22, 2008 -- Clark's auto insurance consumer headache resolved

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