Substitute Transportation

    Posted by MAIA on Jun 27, 2019, 12:01:00 AM

    QUESTION

    This question was answered based upon current rules, regulations & statutes in effect on May 21, 2019

    What is the rule for rentals in a third party claim?  Twice I have had issues with Progressive and GEICO stating that we have to use their company to appraise the vehicle in order to get a rental otherwise the insured would have to pay out of pocket and submit for reimbursement.  Our insured was not at fault in the accident.  I am afraid to have that carrier come back and say that they will not pay the full amount.

    Some of our auto body shops are stating that they will not work on Progressive estimates.

    Please advise.

    Thank you

    ANSWER

    Irene Morrill:  I’m sending this to Kathy Cormier CPPL Member Relations Advocate so she can send you a copy of a letter from former MA DOI lawyer victor Fanikos who wrote a letter for us referencing the MA court case that requires carrier to provide like kind vehicle. 

    If you’re insured was moving then they have some “fault” and the carrier can “discount” that rate by the % of fault. 

    I’m also sending this to Dan Foley, Esq MAIA legal consultant. Dan can the carrier coerce someone to use particular appraisal company or they won’t pay rental? 

    Kathy Cormier:  I’ve attached the letter from the DOI on rental as well as the apportionment chart.

    Dan Foley:  I know if there is a dispute as to the amount of loss for a property damage claim, under the arbitration clause of the auto policy, both the company and the named insured can choose their own appraiser and then these appraisers choose an disinterested umpire. (Mass. General Laws Chapter 175 Section 191A)

    However, in your client’s situation regarding substitute transportation and a rental vehicle, I cannot find anywhere in the law that would prohibit Progressive or GEICO from requiring that you have to use their appraisers to appraise the vehicle in order to get a rental vehicle.

    This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Massachusetts Association of Insurance Agents, Number One Insurance Agency nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.

    Topics: Claims, 2019

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