Not Enough Limit on Liability Insurance

Discussion in 'Auto Insurance Forum' started by davidb7, Dec 29, 2016.

  1. davidb7
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    davidb7 New Member

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    My new car has been rear ended on a highway by a young driver who claimed that he was staring at Ferrari driving in the adjacent lane and did not notice that I was slowing down. The car was not drivable and was towed to my house to avoid storage charges at towing company lot.
    Person at fault rejected to speak to his insurance (Wawanesa), so they accepted liability for an accident only after police report arrived (police report said that person at fault was driving in violation of VC 22350 and was cited and on top of that office accused him of possibly racing with Ferrari)
    Two weeks after an accident an estimator from his insurance company came to take a look at the car and estimated damages to be only $10k. My car bent to an extent where doors will not close and rear axel is not straight in addition it was only 4 days old with 300 miles. I have found the most professional body shop in my city and chose it to be repaired there. Upon completion of their estimate damages went up to $31k and three moths to fix it. I did not won't this car after such a big repair so I hired an attorney. After a month of negotiation they considered the car a total loss because they knew we would claim diminishing value and it will be huge. Now they are offering to pay for the car, but it turned out that person at fault has a limit of $50k for proper damages. My car is worth $52, but I was willing to take a loss of 2k and hope to recover them through personal injury. However, now they say they will subtract towing, storage and rental car for two moths from that because it is considered a part of property damages (total of about $10k).
    1. Is rental car and storage fees indeed considered part of property damage limit?
    2. What is the best way to go for me? Should I sue that person for property damages or take insurance money? (he is under 21, doesn't own anything and his car was totaled as well)

    I tried going through my insurance but they don't want to total the car, which seems strange because according to my math they won't loose a dime.
    If I go thorough another person's insurance they have a limit of $50k and they get to keep car's salvage value (estimated around $14k). If I go through my insurance company they pay $52 to me, and get to keep car (52-14=38) but they subrogate another party's insurance for the entire amount because after they pays all fees and rental there is still $40 left in limit.
    3. Is something wrong with my understanding of subrogation?

    UPDATE: Accident happened in LA, California.
     
    Last edited: Dec 29, 2016
  2. hesse
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    hesse Guru

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    not sure if your state has an established threshold for totaling a vehicle but your only at about 60% 31000 damage / 52000 value of car. So I don't think that would automatically total it. Have you talked to your agent and voiced your concerns?
     
  3. LostDollar
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    LostDollar Guru

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    Does your own insurance include underinsured motorist property damage coverage which might help with part of the shortfall?

    (Or couldn't you or your attorney get you $62K from your insurance and they recover $50K from the other insurance? That gives your insurance salvage value + recovery $14K plus $50K = $64K.)
     
    Last edited: Dec 31, 2016
  4. KenP
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    KenP Expert

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    Echoing everything else said.

    Worst-case scenario, you'd have to file a collision claim (I'm assuming with that value of vehicle you had collision coverage). You'll have to pay your deductible but the rest of the repairs they'll cover (since they won't total it, you're not going to just get a check back).

    Unfortunate to have to pay the deductible, but it'll still show as a not-at-fault accident so your rates would likely be unaffected at renewal
     
  5. AnzhelaDvorkina
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    AnzhelaDvorkina New Member

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    The maximum liability amount is used to limit the loss that can be sustained through one single policy. If the total loss of a policy occurring in one year exceeds the amount of the agreed maximum liability, the actual loss for this policy is limited to this amount. The maximum liability is often defined as a multiple of the earned premiums in a given policy contract.
     
  6. joannevalmera
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    joannevalmera New Member

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    Really depends on where you are though. My uncle had some trouble with this once and he really got shafted. I tried coveradvantage.ca for while so not sure if it works for you guys.
     

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