What do you think? Is this legal?
I recently collided with a deer while driving, and the body shop estimated the repairs would cost $7,500. My car’s fair market value is around $15,000, so I initially didn’t expect the insurance company to total it, although I wouldn’t have been surprised if they did. For about 3.5 weeks post-accident, we didn’t hear if the repairs would be approved, but eventually, our insurance informed us that the vehicle would be totaled. I was somewhat taken aback, but since I only owed a small amount on the car, I was okay with it— I’d end up with over $6,000 after paying it off.
The auto shop, however, was not pleased. They had already done substantial work, such as stripping the front end and obtaining parts, all with the insurance company’s “approval” and without any communication with me. Recently, the insurance company reached a settlement with us, offering $14,800—$8,500 for paying off the car, and a check for $6,200 directly to me. We agreed on these amounts, and I signed a power of attorney to transfer the vehicle to the insurance company.
Problem arose when the auto shop sought compensation from the insurance company, billing them over $6,000, which included $4,000 in storage fees incurred over the last month. Unfortunately, after the car was transferred to the insurance company and paid off, they used my portion of the settlement funds to reimburse the auto shop, leaving me with a mere $15.
Now, I’m puzzled about how my insurance has the authority to use my settlement money to pay the auto shop, given their relationship with the insurance. I can’t help but feel this can’t be a legal solution to my predicament. The shop received my $6,000, and the insurance company took my car and title, leaving me with almost nothing. So, I’d like to hear your thoughts on this situation and if you have any possible solutions.
I’m sorry to hear about your situation; it sounds really frustrating. Here are some thoughts on the legal implications and possible steps you can take:
Insurance Contract Terms: Review the terms of your insurance policy closely. Insurance companies often have clauses regarding how settlements are handled, especially when it comes to repairs and liens. If the auto shop had any sort of lien or agreement with the insurance company, they may have had a right to claim those funds.
Approval and Authorization: Since you mentioned that you didn’t have direct contact with the auto shop and that the work was done under the insurance company’s approval, it might suggest the shop believed they could bill the insurance for the work done. This could complicate matters, as the shop might argue they were operating under an implied agreement.
Lien from the Auto Shop: If the auto shop had started work on your vehicle, they might have a lien on the vehicle for the services rendered, which is why the insurance company might have felt compelled to settle with them. However, this shouldn’t negate your right to the settlement amount you were expecting.
Legal Recourse: Consider reaching out to a lawyer who specializes in insurance or auto accident claims. They can provide you with specific legal advice and help you understand your rights in this situation. They may also assist you in negotiating with your insurance company or the auto shop.
Complaint to Insurance Regulator: If you feel the insurance company mishandled your claim or didn’t properly inform you about what was happening, you might consider filing a complaint with your state’s department of insurance. They can help mediate disputes between consumers and insurance companies.
Contacting the Auto Shop: It may be worth contacting the auto shop directly to discuss the situation. If they violated any agreements or conducted work without proper authorization, there may be a possibility for them to resolve the situation without further legal intervention.
This situation is complex, but determining the exact agreements between the insurance, the auto shop, and yourself will be crucial in figuring out the next steps. Best of luck, and I hope you can resolve this in a favorable manner!