Limo Accident Between States. Reasons for Denial?

[ponchomoran]

I'm sorry for the long post, but I want to tell this in good detail. I have a limousine company that is very small, we already sold two cars in the past and our only vehicle, which is an H2 stretch, was involved in an accident one month ago. The car was going from Las Vegas to San Diego (the company is in Orange County). We knew it was risky, but business is very slow and we needed the money. The car broke down in the middle of the highway. After many hours, the passengers were picked up and taken by another company and the mechanic couldn't fix the car. It was 3 AM in the morning, and the driver said it was better to call the tow truck first thing in the morning when we knew where to take it for repair. Long story short, the driver must have left the car not properly secured, the handbrake was not set right, or we don't know why, but while he was resting in the back, the car went down the ramp and was hit by an incoming pick up.
I made the claim the following Monday, after two weeks they confirmed the coverage and they even sent me an estimate and a check to pay for the repairs, but the day the sent the check, a person from the insurance called me and asked me all details about the accident. I told him I wasn't there so I didn't know, and I was going to get the police report in a few days. He then asked me why did we go to Las Vegas if we are not supposed to, I said: I don't even know if they even reached Las Vegas, because the passengers were still in the car when it broke down (turns out, as I later found out, the passengers were picked up in Las Vegas, and they were going to San Diego and left there, this is my company but I have a day job, and my brother is actually the one who runs the business, makes reservations, etc. I basically just pay the bills). Anyway, he started saying that I must have been lying. I told him we never go to Las Vegas, which was a figure of speech, because we had been 3 times in the last 5 years, so what I meant was, we rarely ever go, but he took it as I had said never and later I said 3 times before, so I was lying. I know I should have been more careful, but it was a really bad day for me, and I was under a lot of stress. So, basically they put the claim on hold, because they want to find out if we go to Las Vegas very often, and they want me to take a statement under oath. I have no problem with that because I really don't have anything to hide, we actually 'never' go to Las Vegas (last time we went was July 2009 and before that in 2007). They asked me to bring with me a lot of papers and records, and I'm glad because that will show them where our business is in, which is 80% in Orange County, the rest in LA and some in San Diego. The problem is that I have a feeling once they cannot prove that we go to Las Vegas as often as they think, they will try to find out any other way to deny the claim based in other facts. My insurance agent told me that going once to Las Vegas is not a reason for them to deny the claim; problem is when you go there multiple times. We really haven't done anything wrong, it was just one very regrettable mistake. The only thing I can think of that I didn't do, and I want to find out if it could be a reason for denial is that the car was originally garaged in my house. But when my brother moved to a bigger house, we decided to park it there because he had a bigger driveway and it was much safer, but he lives 6 miles away from me in a different zip code. My agent said there shouldn't be any problem, because even though is a different city, it is the same territory. I didn't notify the insurance, because it never crossed my mind, actually; but the want information and pictures of where the car is garaged at. Anyway, I can't think of any other reason why they could deny this. It is a legitimate claim, but I know they will try to find something. I already talked to a lawyer, and he's going with me to the SUO just to make sure they don't ask me crazy questions and to be protected. Do you know anything else that can make them deny my claim based on the facts I just gave you?
Thank you very much

 

[FL P&C Broker]

Get a lawyer.

 

[djs]

Probably no need for a lawyer. Let me tell you though, this story has fraud written all over it. This is why the insurance company is looking at it. You don't have to worry about it, if what you say is true. Simply tell the truth, everything will be fine.

Why does it have fraud written all over it? You have to look at it from a carriers perspective. There has been a large spike in claims from people trying to avoid payments on vehicles. You're story makes this sound like a possibility, albeit, not necessarily a fact.

The whole story, which is probably 100% accurate, sounds suspicious to someone who, by nature and by job, are paid to be suspicious. I want to stress this doesn't mean anything is wrong, it just means there were enough caution flags raised to warrant the carrier doing a bit of extra investigation.

What will they do? Totally a guess:
- Verify with your bank that your limo payments are reasonably current. They use this as a gauge to see if further investigation is warranted. Don't worry about it.
- Look at the financial health of your business. If it is about to go belly up, you can imagine this is a flag. Again, they can't deny based on this, its a flag.
- Review logs to make sure the issued policy matches (reasonably) the manner in which the vehicle is used. For instance, if you have a personal auto policy, then this claim will be denied because you were using the car 'for hire' during the event that led to the claim. If you have a commercial auto policy that covers livery, then you are fine. They may question the radius of use. Be honest.
- Garaging zip code had no bearing on the claim as presented. Probably not an issue, though it will be raised.
- They will grill you on why the car was not secured correctly or towed that night. Why was it 'safe' to abandon the car? They can't deny on this, but it is probably the initial red flag that went up.
- If the story all fits, they will then finalize the claim.

Here's the thing, carriers HATE paying fraudelent claims. Because of this, they look for them. The overwhelming majority of claims that run through the carriers special investigation unit are totally legit, but needed to be looked at. From your story, you fall into this category. Don't sweat it to much (just tell the truth) and realize that it is part of the process to help keep rates down.

I've been through dozens of these investigations with my clients. Strange things will trigger them, but they get worked through, usually pretty quickly.

I could tell you some strange stories about special investigations. I won't bore you with details. I've done lots of recorded statements, take your time with this, don't answer more than they ask. They don't ask trick questions, they just want a baseline for their investigation.

How much is the claim for?

Dan

 

[joshb]

Probably no need for a lawyer. Let me tell you though, this story has fraud written all over it. This is why the insurance company is looking at it. You don't have to worry about it, if what you say is true. Simply tell the truth, everything will be fine.

Why does it have fraud written all over it? You have to look at it from a carriers perspective. There has been a large spike in claims from people trying to avoid payments on vehicles. You're story makes this sound like a possibility, albeit, not necessarily a fact.

The whole story, which is probably 100% accurate, sounds suspicious to someone who, by nature and by job, are paid to be suspicious. I want to stress this doesn't mean anything is wrong, it just means there were enough caution flags raised to warrant the carrier doing a bit of extra investigation.

What will they do? Totally a guess:
- Verify with your bank that your limo payments are reasonably current. They use this as a gauge to see if further investigation is warranted. Don't worry about it.
- Look at the financial health of your business. If it is about to go belly up, you can imagine this is a flag. Again, they can't deny based on this, its a flag.
- Review logs to make sure the issued policy matches (reasonably) the manner in which the vehicle is used. For instance, if you have a personal auto policy, then this claim will be denied because you were using the car 'for hire' during the event that led to the claim. If you have a commercial auto policy that covers livery, then you are fine. They may question the radius of use. Be honest.
- Garaging zip code had no bearing on the claim as presented. Probably not an issue, though it will be raised.
- They will grill you on why the car was not secured correctly or towed that night. Why was it 'safe' to abandon the car? They can't deny on this, but it is probably the initial red flag that went up.
- If the story all fits, they will then finalize the claim.

Here's the thing, carriers HATE paying fraudelent claims. Because of this, they look for them. The overwhelming majority of claims that run through the carriers special investigation unit are totally legit, but needed to be looked at. From your story, you fall into this category. Don't sweat it to much (just tell the truth) and realize that it is part of the process to help keep rates down.

I've been through dozens of these investigations with my clients. Strange things will trigger them, but they get worked through, usually pretty quickly.

I could tell you some strange stories about special investigations. I won't bore you with details. I've done lots of recorded statements, take your time with this, don't answer more than they ask. They don't ask trick questions, they just want a baseline for their investigation.

How much is the claim for?

Dan

Excellent post/advice. And as Dan first started off, I too would agree, there is no need for a lawyer to assist you, especially if your going to tell the truth anyway. If you need the money that bad, ditch the lawyer and the money that you were going to pay him will be in your pocket. Let us know how this turns out.

 

[ponchomoran]

Dan,
Thanks for your reply, it's very informative and without getting over-confident I understand what you say and I'll be a little more secure when I answer those questions. The claim is for 13 thousands dollars (initially, although it could go up based on a new estimate which we will do in the body shop).
Like you say, I understand what they could be thinking of. I believe the misstatement I made of saying first "we never go to las vegas" versus "we have been 2 or 3 times in the past" is what raised the biggest red flag. Although the fist was a figure of speech, and the second statement was not even reffering in the past 12 months, but in the past 5 years altogether, so it shouldn't be an issue. I received a letter from their attorney asking me for a lot of paperwork, which I have all. But acording to the things they asked me for (lease payments, lease agreement, trip logs, how do we market the biusiness, driver's records, maintenance records, etc.) it all makes sense to what you said. Basically they want to prove that we do a lot of business in las vegas, which we dont, but showing them those papers will help us prove that. Now, if they go thorugh the actual incident, and why the car was left there and not repaired or towed, that I can agree is pure negligence, but at the same time, that's why we pay insurance, and that's why we will have to pay a deductible to repair the car. However it happepend, if it's an accident, they should honor the policy that we paid for.
I already talked to an attorney, and he's going to go with me. It probably is a bit of a waste of money, which we dont have, but I'd rather be safe. And also, I dont want them to smell weakness, and know that at least somebody is telling me what are my options. Anyway, I made a good deal with him, and he's not charging me too much right now. I'll feel better not going alone.
I really dont have anything to hide, when they want to know how was the business doing, they will find out it wasn't that good, but the car was only 2 thousand dollars left to pay it off. Why would I want to commit fraud on a car that is practically paidoff? it doesnt make sense, and it became much more expensive to me, because even if they had totalled the car, I wouldnt have gotten a fair price for it, I'm sure. The thing with the Vegas trip was really a bit of bad luck, and a bit of bad business decision, but I'm paying for it. Right now, all I want is to go back to work and the only way I can do it is if they repair my vehicle. Since the car was going to be paid off, the profit margins were going to be much higher, and we had plans to do a lot of things with the extra money to inprove the business. I hope everything is over once I give them the information they want and nothing else comes up, although like I said, it's all true, and we dont do anything wrong with the way we operate the buisiness. Thanks again for your information

 

[djs]

The good news is, insurance covers negligence Well, as long as its unintentional.

Glad I could shed some light on this for you. Don't panic over the process, I've seen this happen lots of times. If what you are saying is true, then it won't be a problem at all.

Dan

 

[ponchomoran]

Hey Dan,
Just wanted to let you know, I took the examination under oath last Tuesday.
I think everything went fine. The lawyer who interviewed me was actually pretty decent and even tough it was really long, he just asked me things that for the most part I was prepared to answer. And, just like you said, they went through so many things regarding the state of the company, how we operate, financial health, how is the company set up, how do we market the business, what time of the year is the business stronger and weaker, etc etc., aside from the actual event that happened with the accident, which I always said I can tell what the driver told me and nothing else. I recorded the whole thing with my phone and I listened to it afterwards, and on a second listening, I only found a couple of things I should have probably never mentioned, but I hope they are not big deal (one being that the driver was not very available to me after the accident before I made the claim, because he was too busy and too tired and stressed, so I couldn't get too much information from him, I probably shouldn't have said that, it was an overstatement and not even necessary). But over all I think that what they were looking for, they couldn't find it, I provided so much evidence that we don't do business regularly in Las Vegas, which was the main issue.
Now, my question is. Since you said you have experience with this kind of things, how long should I wait till I call the insurance company and tell them what is the result. I was thinking of waiting till tomorrow and if they haven't call me, give them a call and find out how much longer is this going to take. You say it is normally pretty quick, but is it one week, two weeks? what do you suggest?

 

[djs]

I don't know who the carrier is, so I can't say I have any particular experience with this carrier. My first line of defense here is this is why the agent gets paid. He/she should make these calls DAILY to get updates. He wouldn't be told much, but just knowing there is a call coming in helps keep it on top of the stack, rather than the bottom.

If you call to often, it could slow it down some. My recommendation is call Friday, and when they say we are still looking into it, ask the person when you should call back for an update. They will tell you they will call you, then say you'll call back on Tuesday if you don't hear. Don't be pushy, just emphasis you need the car fixed/replaced to get the business back to work.

Dan

 

[ponchomoran]

Thanks Dan, that's what I was thinking. Don't be too pushy, but let them know you will be on top of it.
I also started preparing the form to send to the Department of Insurance in case this gets ugly, so we do that right away and stop losing time. And have contacted a couple of lawyers, as a final resort.
My agent told me before that we should wait for the final decision before he tries to call his contacts with the carrier, and try to see if he can help in case the decision is not good for us.
The insurance company, by the way is State National Insurance, and the claim manager, who I'm dealing with is Knight Management insurance.
Again, thank you for the information and your advice...

 

[ponchomoran]

Dan, I hope you see this message and can help me with a question about my situation.
I was finally able to speak to this person from the insurance co. after almost four weeks of calling and leaving messages. He then told me that the reason why he wasn't calling me back was because I had an attorney and he can only speak to him. I told him I hired a lawyer just to accompany me to the EUO, but he said he then should have been notified that the lawyer wasn't representing me anymore.
So I called the lawyer and asked him to call this person and tell him that. He left a message saying he could talk to me because he was not working for me anymore, and then I called the insurance person again, and he said he got the message and said it was fine to talk to me then.
so he told me he hadn't even read the transcript from the EUO and he still needed to speak to the attorney who did the interview and ask for his opinion. So I called back the next day and he said he still didnt know anything, but maybe they would also need to interview the driver this time. I told him to please hurry up, because this was just taking too long for no good reason, and told him I was already thinking of filing a complaint with the DOI because of the delay and the lack of communication from their side. He kind of got upset and told me that in fact he actually now needed a written letter from my former attorney saying that he is no longer representing me and he would not speak to me again until I do so, even though it was verbally told and he had already agreed to it. Is this something right in your mind? Does he have a right to change his mind and now demand this? Or he just did it because I told him about the complaint? My former lawyer is not available until after new year's and he's not going to send a letter this coming week. What is your quick advice?
By the way, I haven't sent the complaint to the DOI, but I have everything ready, and now I am even including this part in the letter. I am this close to send it, because I just can't play their games anymore. I think I will send it on monday if there is no real progress.
Give me your thoughts please.
Thank you very much in advance.