Auto Claim Question

[kingkrazy]

This is more for learning purposes and to be able to help out a family member.

A family member was involved in an auto accident that totaled his car. He has Farmers and they paid his car off within a week. The party that was at fault, or from what the paperwork says, was 75% at fault has Geico. The accident happened back on 2/12/10. He got a letter from Geico stating, in short that the accident involved many property damage claims, there was another vehicle involved, three all together. The letter states that the insured had only $10,000 worth of coverage. My wifes cousins loss was $18,922 (which I'm assuming is his car). It shows pro-rata amount of $9,090. They (Geico) is asking him to sign this letter to accept their offer. I'm confused in that Farmers already paid him for his car. Can someone help explain this to me. Does he sign it or not? I have already told him that I would look it over and give him my opinion but he should contact his agent.

 

[Crabcake Johnny]

While I'm sure you'll get some good advice from this board, he should consult with an attorney before signing anything.

 

[djs]

Geico is only obligated to pay up to the policy limits. In this case, $10,000. Sounds like the bulk was your family members car.

Farmers is on the hook for the balance of the damage. The only real difference it makes is in the refund of the deductible. The $9K or so Geico is offering will actually go to Farmers, not to your family member, since Farmers already paid the claim.

You should send the offer to your Farmers claim rep. He will have it resolved for you.

The normal way things happen is that you file a claim with your carrier, they resolve the claim with you, then send the bill to the Party B carrier, who reimburses your carrier, who then may send you a check for your deductible. In some situations, you can file directly with the Party B carrier, and they take care of everything for you without any need to involve your carrier.

Sounds like this case both events occured and never got straightened out.

Also, even though Geico is limited in damage to the limits of the policy, the individual is not. Farmers will send him a bill for the balance, though will likely never collect.

Lesson learned: $10,000 property damage limits are not even close to being enough. It costs very little to increase to $25000 (or higher) to provide significantly better coverages.

Dan