QuestionQUESTION: Jane, my 21 yr old daughter (with infant child in car) was involved in an accident in Texas with a woman who ran a red light. Since our insurance does not include auto rental, my daughter was told she would have to contact the other insurance company herself. This seems so unfair. She should not be inconvenienced at all. What should she expect through this entire process? She and baby were hospitalized briefly, but came out with only bruises and a totalled car. Thanks for your time.
ANSWER: Hi Ed,
One of the basic rules of insurance is that you cannot create coverage where there is none. In this case, your daughter has no coverage for auto rental.
While you have not provided all details, apparently the other company is accepting responsibility. In that case, they are responsible for the damages to her car, and they are responsible for providing her with a rental car during the settlement process.
If she has filed the auto damages i.e., Property Damages, with the at fault carrier, she would simply file the auto rental claim with them as well. On the other hand, if she has filed a Collision claim with her own carrier, collecting on PD could be a bit more complicated unless your carrier has already reached an agreement with the other carrier.
Filing Collision - when liability is not an issue - is not to her advantage as your daughter would need to pay her deductible. In a PD claim, there is, obviously, no deductible. And, of course, the adverse carrier is automatically responsible for the rental car.
If your daughter is filing through both carriers, this would obviously complicate the claims process.
As to her deductible, if she is filing through Collision, the deductible should eventually be returned to her through a process called subrogation. But really, why go through this if the other company has accepted responsibility?
As an aside, your daughter should add auto rental coverage to her policy. It is not expensive coverage and is well worth the small cost. For example ... if the loss had been her fault and she had no choice but to file through Collision.
Hope this clears up your questions.
---------- FOLLOW-UP ----------
QUESTION: Now I'm really confused. The accident was not my daughter's fault. I'm sure the other driver will accept blame, but I have always been under the impression that we are to notify our company anyway. Is that not true?
AnswerTechnically, you should notify your insurance company, although that is arguable depending on the language of the policy. And if she has Texas PIP, she would have to contact them anyway for any doctor bills. But for the reasons cited, it is better to file the damage claim - all of it - through the at-fault carrier.
And - liability is not up to the other driver. It's up to the other driver's insurance company. As long as they are willing to accept 100% liability, there is no practical reason to work through your own company at all. Why pay a deductible, why suffer without a rental if you don't have to?
