QuestionI met with an accident two days back. I rented a new Toyata Camry and collided with another car at right angle. I just have LDW cover for 3000$ from the rental company. I do not have any insurance. Both the cars have significant damage. My credit card company says they would cover only if I had declined the LDW cover at the rental. I am not sure whose fault it is. But the witnesses point its me at fault. So I am worried that I will have to pay a huge sum for the rental car repair as well as the other car. I dont have lot of money. I am still waiting for quotes. I am not sure how to handle this.
AnswerDear Babu,
You did not write to me for a lecture, so I will go easy on you. But folks, THIS IS A PRIME example of why you ALWAYS need insurance and you should NEVER drive without insurance. Now, on to your issues.
I will take your questions with respect to your obligations to the rental company first, and with respect to the other party in the accident second. Then I will show you what to do next and, finally, how to discharge your obligations in bankruptcy.
As to the car rental company, you purchased what is called "Loss Damage Waiver", with a deductible of $3,000. This is an add-on in case you have no insurance and no credit card with a large open balance.
LDW is NOT insurance. It is a waiver of the rental company's right to collect from the renter for 100% of the loss or damage to the rental vehicle. They waive the amount cited: in your case, ONLY the first $3,000.
Here is how it will work in your case. You paid somewhere around $20 per day for the Loss Damage Waiver. This covers rental vehicle damage, regardless of fault, BUT ONLY UP TO THE AMOUNT CITED, i.e. $3,000. Everything beyond that is YOUR RESPONSIBILITY.
To summarize, your rental company waived up to the first $3,000 of loss or damage to the rental vehicle. You will then pay for any loss or damage in excess of $3,000 up to the full value of the vehicle.
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Next, as to the other party in the accident, you will pay all of their damages, including personal injury claims.
If you caused an accident that resulted in that much physical damage, then surely there will also be personal injury claims stemming from the accident.
HOWEVER, your liability will ONLY be in proportion to your NEGLIGENCE. Thus, it would behoove you to fight the charge of 100% fault if there is the chance of finding negligence on the other party. Read below for ideas on this via hiring a legal referral program attorney.
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If you are largely at fault, then the consequences of driving with no insurance will be a huge debt to pay. You will owe for both cars and for injuries. Your state will require you to post financial security or surrender your driver's license.
By the way, DO NOT DRIVE WITH A SUSPENDED LICENSE. It will be checked for any contact with law enforcement, and DWLS is a "biggie" for both habitual traffic offender status and future insurance costs.
Also, once you are in a financial responsibility category, you will find that next time your insurance will cost more than it would have this time. That is because you will be in a "high risk" category according to the insurance industry. Some states require you to make what is called a "SR-22" filing for proof of insurance. Your costs for insurance just took a hit.
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What is next?
First, get some idea of whether you can fight the liability aspect of this claim. I would contact my state bar association http://www.settlementcentral.com/links.php
Ask for the local lawyer referral program coordinator and hire an attorney for one hour for some very low rate, such as $40. Since they are not allowed to take on personal injury claims, make sure you avoid mentioning personal injury. This is a traffic defense and a potential defense to execution on a judgment that may be filed against you in the future.
An alternative to hiring an attorney from the lawyer referral service is to go to a personal injury attorney who handles injuries and present yourself as an injured victim of the other driver. In most states, if there is substantial liability in the other driver, you can collect for your injuries, reduced in proportion to your own negligence.
Thus, one of those attorneys can help to sort out the liability issues. That will give you some idea of whether or not you will owe anything, and if so, how much.
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Next, you need to get yourself some idea of the amount of damages you will owe. If it is only $5,000 or so, maybe you can pay if off over time. Tell them you will discharge any judgment in bankruptcy unless they agree to monthly payments. If it is something that you could pay over time, such as $400 a month or so, then by all means work to get that agreement reduced to writing and start making your payments.
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What can you do if the amount is way too high to pay off over time? GET YOURSELF A BANKRUPTCY ATTORNEY ASAP. So long as you were not committing a crime at the time of the act that caused the accident, you can bankrupt any and all judgments that will be filed against you. Thus, as for the licensing department, your attorney can argue that the bankruptcy might work to eliminate any chance of collecting on the state judgment and hence you will argue against having to post financial responsibility.
Note that while traffic offenses are not considered crimes under the bankruptcy prohibitions, DUI WILL BE CONSIDERED A CRIME. Hence, unless you were DUI, you should be able to discharge all of these debts via bankruptcy.
Subject to maximum limits set by your state in named exemptions, you will be allowed to keep certain equity in your home, a specified value in your car, and tools and money and other personal property (all in specified limited amounts).
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I trust my extra time here has been of value to you and hence I respectfully request that you take the time to find the feedback forum on this site and to leave some feedback for me.
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
Http://www.SettlementCentral.Com
