Buyer Beware!

Currently, there a number of ads running on television pitching how some insurance policies can save consumers large amounts of money in appliance and automobile repair costs. These ads give consumers the impression that air conditioner, refrigerator, or dishwasher repairs can run into the thousands of dollars. Similarly, engine, transmission, or coolant leaks can also result in very costly repairs. If you are considering the purchase of one of these policies, please be aware that maintenance is a key requirement. Regardless of the type of policy, your claim will most likely be denied if you can’t prove that you maintained your appliances or vehicle on a regular basis. For appliances, this means that you must keep your appliance clean. Use a vacuum cleaner to keep dust and lint out of motors and coils. Replace hoses when their use appears questionable. Replace wiring or have an electrician do the work before the wiring becomes worn and brittle. Similarly, you must change the oil in your vehicle at the manufacturer’s recommended intervals. In addition, the transmission fluid and filter must be replaced, usually every 100,000 miles, depending on the manufacturer’s recommended interval. Coolant must also be replaced, here again, depending on the manufacturer’s recommendation. Don’t forget the oil, air and gasoline filters, they also must be replaced. Lastly, don’t forget to save the receipts regardless of whether you do the work yourself or have someone else do it for you. You must have some documentation to show that you made an honest effort to live up to the requirements of the policy. For those things where you won’t get a receipt, I would suggest keeping a chart of the activity – list the date, time, a description of the appliance or vehicle and what was done. Hopefully, your carrier will step up when you need them and the settlement of your claim will go smoothly.

“They Can’t Do Anything But Say No”

We’ve al been in situations where we have to ask for something but at the same time, doubting whether we’ll get what we want. And the only way to justify asking is to rationalize the request by thinking that we’ll never get what we want without asking. So, we inevitably conclude that “they can’t do anything but say no”. The same thing happens when people submit claims to their insurance carrier. You have to put your claim in someone else’s hands and wait for them to decide whether you have a valid claim. Usually, it boils down to a settlement between the carrier and insured. However, there are those instances that arise when damage occurs and the insured feels that it should be covered but, it likely is not. A case in point recently arose when an insured driver hit a plastic five gallon container with his car and filed a claim alleging damage to the transmission oil cooler. Upon investigation, it was also learned that the drainage of transmission fluid, which the driver claimed never to have noticed, resulted in the complete destruction of the transmission. For those that are not aware of the location of a transmission oil cooler, it is usually located in the radiator/condenser area, in the front of the vehicle, where air can come in contact. Knowing that the plastic container would have had to enter the air opening in order to contact the cooler, the bumper and grille areas were examined for damage and none was found. In addition, the air opening was much too small to allow even a part of the container to enter and make contact with the cooler. Furthermore, none of the cooling fins or tubes that were part of the cooler were damaged by anything external to the vehicle. Needless to say, the claim was denied much to the disappointment of the insured.

The message here is if you, as the insured, know that there is element of uncertainty in your explanation, then don’t be surprised if your claim is denied. That is not to say that all claims have to have a reasonable explanation. There are times when only an expert can explain the circumstances that are not obvious to a layman. But, when the explanation is bordering on the absurd, it’s time to reconsider your claim. Remember, you can submit your claim because they can’t do anything but say no.

Which Came First: the Accident or the Transmission Damage?

 

Recently, we were asked to evaluate a vehicle in order to determine if the damage to the transmission occurred before or after the vehicle was involved in an accident. This was a situation where the accident involved two vehicles, a Pontiac Sunfire and a Buick Enclave. The impact occurred such that the Sunfire sustained damage on the right front side while the Enclave’s left front side was damaged. The Enclave was repaired, returned to the owner and approximately 3100 miles put on the vehicle before the transmission failed. Specifically, the transmission began making a whining noise and when put in gear, would not “pull”. One of the ways to assess when damage occurred is to construct a timeline of events that leads to the damage. That is, establish the condition of the transmission before and after the collision. In this case, the service record of the Enclave was obtained from the owner’s service garage. The record showed that the owner had the vehicle in for an oil change approximately one month prior to the accident. The particular servicing agency also provided a 21 point inspection which included checking all fluid levels. It was then established that the transmission was in good condition prior to the accident. From that piece of information, and without being able to prove that something else (like a sudden fluid leak) caused the damage, the benefit of the doubt has to go to the owner. The insurance company for the owner of the Pontiac was therefore responsible for the repair of the transmission in the Enclave. However, it should be noted that if the condition of the transmission could not have been established, the alternative would have been to remove the transmission and make a determination from the damaged parts. This is a process whereby someone is going to incur some charges. It is usually beneficial to all parties if an arrangement is made beforehand. The arrangement is usually one where the insurance company will pay for the disassembly and repair if the damage is found to have been caused by the accident. If not, then the owner has to agree to pay for the disassembly and repairs.