I’d like to get your thoughts on a recent experience I had. Is this situation legal?
I was in an accident where I hit a deer, and the body shop estimated the repairs at around $7,500. My car’s fair market value is about $15,000, so while I didn’t think the insurance company would total it, I wouldn’t have been surprised if they did. After about 3.5 weeks of uncertainty, we finally heard back from our insurance company: they were totaling my vehicle. Although I didn’t anticipate this outcome, I was okay with it since I only owed a small amount on the car. This meant I would receive over $6,000 after paying it off.
However, the auto shop wasn’t pleased, especially since they had already done a significant amount of work, including stripping the front end and acquiring part numbers. All of this was done in agreement and with “approval” from the insurance company, with no communication between the shop and myself.
Recently, the insurance company reached a settlement with us, offering $14,800: $8,500 to pay off the car and a check for $6,200 to me. We agreed to these terms and signed a power of attorney to transfer ownership of the car to the insurance company.
The auto shop then started demanding payment from the insurance company, sending a bill for over $6,000, including $4,000 in storage fees incurred during the past month. Unfortunately, after the insurance company received the car and settled the payment, they took my portion of the settlement and used it to reimburse the auto shop, leaving me with just $15.
Now I’m left wondering: how is it legal for my insurance to allocate my settlement money to pay the auto shop, especially when the shop was working directly with them? I’d appreciate any insights or advice on how to address this situation. Thank you!
It sounds like you’ve found yourself in a really frustrating situation. While I’m not a lawyer, I can offer some insights on the general principles involved.
From what you’ve described, the key issue revolves around the relationship between the insurance company and the auto shop, and the way payments were handled following the decision to total your vehicle. When an insurance company totals a car, they typically have the right to settle claims, including paying out for repairs that were started but not completed. However, the manner in which your settlement was applied—specifically using your portion to reimburse the auto shop—raises some concerns.
Power of Attorney: When you signed a power of attorney, you allowed the insurance company to act on your behalf regarding the settlement of the claim. This doesn’t necessarily mean they have the unilateral right to divert your settlement money without proper communication with you.
Billing Disputes: If the body shop performed work without clear authorization from the insurance company or without your consent, they may have been overstepping. It’s important to determine whether your insurance approved the repairs and their costs before the car was totaled.
Legal and Contractual Rights: Depending on your state’s insurance laws and the terms of your insurance policy, you may have grounds for a dispute. For example, if the insurance company acted in bad faith or didn’t follow correct procedures in managing the repair process, you might have a case.
Next Steps:
This is a complex situation, and legal counsel would be best suited to navigate the details and provide specific advice. Good luck, and I hope you can find a resolution to this issue.