We have a car that is a total loss, but Mercury Insurance does not want to pay for the storage charges and the tow. Now they’re saying, ‘This vehicle was settled with the owner retaining the vehicle and we have
already addressed the tow and storage fees with him directly. Any further questions/concerns need to be directed to the registered owner of the vehicle.’ Is this right? The owner of the vehicle had originally told them he didn’t want the car, but then Mercury told him he could keep the car and they would pay him out on his loss. I think they did this to get out of paying the fees. What can I do?
Question asked by Claudia Hernandez, Sakfari Inc., Ontario, Calif.
To fully answer your question, I would need to know if this was a first-party claim (against their own insurer) or a third-party claim (where the at-fault party’s insurer is handling the claim on the at-fault party’s behalf).
In addition, I’m not readily familiar with California lien and abandonment laws, but you should be as it’s an important part of your business and serving your customer…as you’re finding out.
I would agree that it appears the insurer has made a settlement with your customer and has closed their file with the intent of avoiding paying your company’s charges. While I’m not an attorney and as such cannot and do not offer legal advice, I can share with you what I would do in your position.
Yes, the insurer is correct. Any issues you have regarding your billing would be with your customer. Understand that the insurer has no contract with your company and thus has no responsibility or liability to you. The insurer merely owes your customer, either by policy contract or due to the liability of their insured who, through their negligence, caused your customer’s damage. Understand that the insurer didn’t abandon the vehicle…your customer has – thus far.
Here are some tips I think will help you and others in the future:
1. If you don’t have a well-constructed repair authorization/contract, you need one with provisions that shelter you from such issues and informs and clearly clarifies your customer’s duties and responsibilities. This will help safeguard your customers from such abuses and enable your company to receive full and proper payment for services rendered.
Auto Damage Experts repairer consulting/clients have such language within their authorizations that clearly informs the customer that it is they who are responsible for all billings, and they cannot transfer or assign their responsibilities to others (even by transferring ownership of their vehicle). It clearly outlines the customer’s obligations and responsibilities to ensure the customer understands that if the insurer doesn’t satisfy the repairer’s bill, they, the customer, will remain financially and legally responsible.
2. I would contact a local auto title processing company that fully understands your local and state regulations and laws to find out what rights and obligations you have and what you need to do to file a proper lien (i.e. garage keeper’s, mechanics, possessory lien, etc.) on the vehicle and what steps are needed to collect your charges. This will include knowing any requirements and restrictions that may exist to help you avoid losing additional storage charges while you go through this ordeal. Example: in Florida, if the repairer doesn’t file a lien notice, specifically as called for in the statutes, within 15 days, storage cannot be charged until such notices are properly executed and all prior storage charges (except those 15 days) are waived and cannot be assessed. Your state may have similar guidelines you need to know to protect your company’s and your customer’s interests.
3. Take whatever actions are necessary to hold the insurer accountable, even if you must do it by collecting from your customer so that they will be compelled to seek recovery from the insurer. Only when the insurer’s risk begins to outweigh the financial rewards will their behavior change, and only then will you be able to discourage such unethical conduct in the future. This may be ‘tough love’ and uncomfortable for you, but the goal is to learn and develop processes to avoid a reoccurrence in the future. Doing so may require some collateral damage.
4. Make this ordeal and the related costs a valuable learning experience to enable you to prepare and avoid similar occurrences in the future. Ultimately, if you’re successful in getting your customer to pay this time (and they, in turn, make the insurer pay), the insurer will think twice before attempting to do it to you a second time. This information will also enable you to avoid future situations and likely garner you increased profits in the future as well as an appreciative customer. Be sure to pass any costs for such title service, lien fees, etc., onto your customer who, in turn, will seek recovery from the insurer. Set up written policies and procedures for your company to ensure your employees know what to do and when to do it.
5. Remember who you work for: the customer. It is they who receive and owe for your services. If an insurer attempts to harm them, be there to assist but don’t take the hit for or shield them. You should run your business ethically and effectively and expose any bad behavior to your customer and help them resolve the matter – but don’t do it for them as some insurers are counting on. Insurers have certain legal duties to consumers, but have none to you or your company. As such, you’re powerless. Your customer has all the power, and it is they who can make the difference! You should seek the opportunity to encourage and enable your customer to combat bad behavior, and you should be on-hand merely as their humble service provider. This is indeed a situation where: “A pound of prevention is worth a pound of cure!”