Monday, August 13, 2012

Will my car insurance really cover that? No way!




Here at Robison Service we see lots of unusual failures.  Many of the cars we work on come from a long way away, which means their owners do all their “easy service” close to home.  What we are left with is the difficult, complex, and time-consuming work no one else can do.

Sometimes that work is at the customer’s expense.  However, we find ourselves working for insurance companies more often that you’d think.  Most of the time, our clients do not know the problem with their car may be covered by insurance until we tell them.

What kinds of problems are covered?  I’ll give you some examples.  But first, let’s go over the components of your insurance policy.

Basically, you have three kinds of coverage:
·      Liability insurance covers injures to other people and their cars and property.  We don’t usually make use of the liability parts of people’s policies unless we are fixing a car someone else damaged, and that third parties’ insurance is paying.
·      Collision coverage pays when you damage your car by hitting something you could or should have foreseen.  This is the part of the policy that pays for repairs if you hit another car, a guardrail, or a tree.  It would also cover damage to the undercarriage if you hit a deep pothole.
·      Comprehensive coverage covers “all other risks” to your car.  The scope of coverage varies slightly from state to state, but in general, comprehensive covers all damage to your car that is not covered by collision, and is not a result of normal wear, negligence, abuse, racing, or certain other excluded activities.  People often refer to this part of a policy as “fire and theft coverage” because those are the best-known comprehensive claims.

On more than one occasion, customers have called me to say their car stopped running, and they were having it towed in.  When the car arrived we found it out of oil or coolant, with a damaged engine.  If the car “ran dry” due to a simple leak and the owner’s failure to check his fluids, he’s on his own.  But if there is a crack or hole because the owner hit something . . . we probably have a comprehensive insurance claim.

Am impact to the engine is covered just the same as an impact to the hood or windshield.  The difference is, an impact to the oil pan can lead to $10,000 in damage where an impact to the windshield is seldom more than a few hundred dollars. 

If you make a claim for engine damage don’t be surprised if the insurance company asks for proof the car was running well before the loss.  If they are asked to pay for a new engine they will try and determine the condition of the old engine before deciding what to offer in terms of repair.

That’s one more reason regular service and maintenance records are so vitally important! 

Every time we have a rain that suddenly floods roadways I hear from motorists whose cars swallowed water while driving through puddles where they expected clear road.  Most often water ingestion ruins the engine, and this too results in a comprehensive claim. 

What about damage under the car, when nothing was run over?  A common example comes from the Land Rover world.  The front drive shafts on Discovery II models are notorious for coming apart.  When that happens the shaft starts swinging round under the car.  If the vehicle is moving fast when this happens that shaft can do a lot of damage.  I see transmission cases smashed, floors torn up, and more.  Damage can easily exceed $5,000.

Damage from driveshaft failure will often be covered by comprehensive coverage.  The driveshaft breakage is a routine mechanical failure, which is not covered. However, all the damage that failed driveshaft causes is covered.   That fact is sometimes a surprise to appraisers, but here’s the theory, presented via a different example: Say your steering linkage breaks, and you lose control and crash into the guardrail.  “Of course crashing into the guardrail is covered,” you say.  Well, the guardrail crash was the consequential result of steering linkage failure.  And the torn up undercarriage is the consequential damage that results from the driveshaft failure.  Both should be covered under the same theory of coverage.

By excluding the specific failed mechanical part, and them making a claim for all consequential mechanical damage it is often possible to get a surprising amout of mechanical repair covered under the comprehensive insurance umbrella.

Another example:  A car won’t start, and we find the computer compartment filled with water.  The cause:  A water drain that was blocked with pollen.  The  repair: Thousands of dollars of new electronic modules to replace the ones that got immersed in water.  This claim isn’t so clear-cut.  If the car has drains, someone should be blowing them clean.  If the drain-cleaning is part of a scheduled maintenance activity, and the customer can show that was done, he should be all set.  If the drains clogged after a local “pollen storm” that will probably cover him too.   However, if the area is filled with rotted leaves and debris and it’s obvious the drains have not been cleaned in years – watch out!  The insurance company may tell the owner he caused the problem by failing to maintain the car as required.  The technical term for that is contributory negligence, and it can leave someone on his own with no coverage or reduced coverage.  The moral:  Always check stuff like that when the car is in for service.  You never know what you will find and a simple thing like leaves in a drain tube can have huge consequences if left unnoticed.

The final thing I’ll mention is rodent damage.  Some of our biggest insurance claims come when mice get into collector cars, and chew them up.  If they inhabit a car for long they leave a stench that cannot be cleaned except by upholstery replacement.  This damage too is covered by comprehensive insurance, and claims on Rolls-Royce and other collector cars can run into six figures.

Rodents can also cause fires, if they chew into electrical harnesses and they subsequently short out.  The moral:  pay attention to where you store your cars, and try and keep them rodent free.

I actually have a whole blog essay on rodent damage for those who have this problem.

In closing I will also add that I'm not a lawyer but coverage questions have more to do with reading the policy carefully and interpreting it that they do with the law.  I'm also not an insurance agent, or employed by any insurance company, except insofar as they pay us to fix their insured's cars.

Insurance rules vary, as do policies.  Read yours carefully.

Best wishes and bye for now
John Robison

19 comments:

Dan said...

Great article with a novel (at least to me) and more importantly intuitive way to understand insurance clauses on my autos and how they may be related. Much appreciated!

Dan

PS Just fyi - small typo - I think "about" in "surprising about of mechanical repair covered" is meant to read "amount".

Dan said...
This comment has been removed by the author.
John Elder Robison said...

Thanks for writing in, and you were correct on the typo.

Best wishes
John

city said...

thanks for posting.

Sarah Wilson said...

Hi John, I have a question I hope you can provide clarity on. I was in a front end collision, and the CEL came on. The insurance company paid for the body work, just under $4,000 but never had a mechanic inspect for the check engine light and the reason it came on due to the accident. My mechanic tells me after diagnostic testing that the CEL reads it's the catalytic converter. Today the insurance agreed to have a service station working for them look at it. Their mechanic came up with a similar reading in which the CEL reads that it's the rear oxygen sensor giving off the signal and not the front O2 sensor. The adjuster says that because it's the rear O2 sensor and not the front O2 sensor, it therefore couldn't have been caused from the accident. My question is do you wholeheartedly agree with the insurance company's diagnosis? Any advice or lead will be helpful as I continue to pursue coverage for the damage. Thank you. _ Sarah

John Elder Robison said...

Sarah, your question does not contain enough information for a full response. There are some o2 codes that could be related to the accident but the most important clue would be the freeze frame data. If the o2 fault was logged before the wreck it's a pre existing fault. If it was logged at or right after the wreck I'd say there is a clear tie. You also have to look at the particular code (there are many) and ask how it would be created following the accident. This level of investigation is often a problem because its beyond what many corner garages can do, but that would be the steps to answer the question

shineyourlight said...

Hi John

Firstly thanks for this service and I hope you can help me. My car is a Renault Clio M reg (UK reg) Recently, I came out of my house to drive my son to school only to find a woman standing by my car telling me she had just had a blowout and consequently hit my parked car at the front and would pay for the damage. She had called her father who told me there was no damage, just the cracked bumper but a few days later I happened to see what looked like an oil leak so I kept checking the oil and I wasn't too worried as it would be looked at when it went in for the repair ........but then the car started acting strange and wouldn't go into gear, then it suddenly came to me, transmission fluid. The insurance claim engineer said that the transmission fluid leak was not caused by the accident but I have never had any problems with this car in the five years I have had it. luckily my sons school and my workplace is 5 Minuit round trip and I very rarely do a longer journey than 30 minuits and I garage my car 90 percent of the time. Is it likely that the impact could have caused the transmission leak and if so do I have the right to challenge the decision of the claim engineer by the way we are both insured by the same insurance company !

Many thanks
Marcia

keysa71 said...
This comment has been removed by the author.
Car Troubles said...

Hi - I drove through a puddle the other week then two days later some of the electronics abs/parking sensor failed. Took it to the place I bought it from (new, 4 years old now) and they are quoting 30k to fix it. I am concerned my comprehensive cover won't cover it, should i be afraid?

Casey Jones said...

After reading this, it sounds like I really want to make sure I maximize my liability insurance. My car is a rust bucket and I don't care what happens to it. However, I do care about what my car may do to other cars or people. That could get very expensive if I don't have good insurance.

Pamela said...

Thanks for this great article. My son's transmission case was damaged when he drive down a road in a subdivision that had exposed water main covers and manhole covers. The car is less than a year old and has $8000 damage (need to replace transmission). Do you think this covered under comprehensive or collision insurance? (I have zero deductible comprehensive, $500 collision, so trying to prepare myself for out of pocket expenses). I have Allstate in NC. Article in the paper this week about the same subdivision and the fact that their roads haven't been paved in 10 years, one resident described it, " it's like driving through rubble in a war zone." I'd say so!

Carola Dunn said...

I'm writing a book in which I need a vehicle (1970ish Bedford van) to be disabled by damage to the undercarriage from driving over a rock. I remember my son once destroyed his transmission doing this. Is that the most likely damage, or what else would work to stop it running? Any suggestions very welcome!

Thanks,
Carola

curious guy said...

What about a crack in head from having 1st tune up and a plug had.to be forced or pride to break lose and come out?

John Elder Robison said...

If a plug breaks on removal during a tune up, that is a risk of doing that service. Insurance would not normally have a role there

Unknown said...

Hello,

I have a question and not sure if you can help, but worth a try. I purchased a 2014 Charger and while driving my brakes went completely out. I manage to avoid the accident, but my car still has no brakes. I had the car towed to the shop and I was told the entire braking system would have to be replace, due to brake fluid contamination. Not sure how, or why but will full coverage insurance normally cover situations like this? Any advice will help.


Thank you!

star said...

will insurance cover electrical issues such as engine harness?

star said...

will insurance cover electrical issue such as engine harness?

cwwright83 said...

My benz air suspension failed and caused my car to drop to the ground i lost control and crashed will insurance cover to fix suspension and body damage

Unknown said...

Have same issue. Did you have any luck with insurance