Auto insurance -- learn from our mistake! (long...)

folkvictorianNovember 28, 2011

We've got 3 automobiles insured with Geico. Our primary vehicle has full coverage, but our '96 Saturn SL1 and '97 Dodge Dakota truck only have liability coverage -- we went with the conventional wisdom not to spend money on collision coverage for such old vehicles.

About a week and a half ago, DH took the truck to a dealership to have the headlights checked. For a while now they'll switch off by themselves while the truck is being driven. We've spend hundreds of dollars on supposed fixes but no-one can figure it out. So the truck was in the shop a second time after we paid $350 for a new switch that didn't solve the problem.

So when my husband dropped the truck off, they offered him a loaner vehicle and he accepted. He signed for it and was told they don't insure, so he filled out the form and said we have Geico as our insurer.

Well, on his way to work last week, he hit a deer with the loaner minivan. Not a good time for a $500 insurance deductible, right? Well, it's worse than we thought. Geico says that because it was the truck in the shop and the truck has no collision coverage, the loaner has no collision, either. Nowhere in our policy does it state that a Temporary Vehicle's coverage is limited to the coverage of the vehicle it's substituting, but it's their story and they're sticking to it. We've got liability coverage for others' property, but that's not going to work per Geico.

So learn from our mistake and read the fine print before you accept a loaner vehicle. At the time, we thought it was great to have a loaner as DH works about 45 minutes away and I'd have had to pick him up from the dealership, etc. A loaner? Great! Well, not really.

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So so sorry that happened to you!

I guess it DOES make sense that the loaner would be subject to the same terms and conditions as the vehicle it replaced... but geez, how awful to find that out.

I'd be willing to guess it is not specific to Geico either.

    Bookmark   November 28, 2011 at 9:01AM
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Insurance companies ALWAYS try to deny any claim that comes in for ANY reason they can come up with, no matter how ridiculous their reasoning is.
I have no idea if this is a legitimate denial, but don't take the insurance company's word for it. Keep pressing. Possibly talk to a lawyer.

It is in the insurance company's best interest to get people to give up and not make a claim.

    Bookmark   November 28, 2011 at 9:39AM
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WOW, that stinks! That would have never occurred to me and I never read the contracts I sign on rental vehicles.

    Bookmark   November 28, 2011 at 9:53AM
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We have Geico. We'd been with our previous insurer for 13 yrs and never had an incident until a young woman ran into the side of my husbands car. Even though it was her fault, she filed a lawsuit against us. Our previous insurer was so inept about how they handled this, that we knew we didn't want to count on them in the event of any other problems in the future.

One month after we switched insurers, we had to take our van in for service and borrowed a loaner. We did not buy their optional insurance because the van had complete coverage.

We were at a red light and an elderly woman rear ended us. She also had Geico. Geico did just what we hoped they would. Paid for our medical bills and settled the costs with the rental co.

The work on our van wasn't finished so we had to get a 2cd loaner. We got the additional coverage anyway just in case our own insurance might not cover us if any other accidents turned out to be our fault (instead of the elderly lady's).

It seems odd that even though your truck didn't have collision coverage, the loaner should of. It seems to me that the dealer should be required to have full coverage on this loaner regardless of who is borrowing it. How old is the loaner? Bet its 'young' enough to qualify for collision coverage.

I wouldn't let the dealer off the hook. I'd tell them that this loaner should have been insured regardless of who was driving it or what your own personal coverage was for the truck.

I'd tell them that if they can't work something out, that you are going to talk to an attorney or the state attorney general and see what they have to say. Especially since they can't seem to figure out what is wrong with your truck.

    Bookmark   November 28, 2011 at 12:47PM
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Thank you for the thoughts and ideas. I spoke with Geico yesterday and learned that it was the dealer's responsibility to call in and verify our insurance coverage before giving the loaner to us. At that point we would have learned of the lack of coverage due to the loaner having the same coverage as the truck, so the problem would have been prevented. Woulda, coulda, shoulda, it's still the same -- we're responsible and will have to pay for the fix. Our last deer hit, in 2009, cost about $3,000.00. Again -- read the fine print and learn from our mistake :). Have a great week, you guys, and thanks again!

    Bookmark   November 29, 2011 at 7:52AM
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That is a pretty standard clause in an insurance policy. The loaner/rental is considered a "substitute auto" and you need to read what your policy says about it. Standard policies extend to the substitute auto all the coverage in place on the auto it is substituting for. Unfortunately, in your case that was one of your vehicles on which you carry liability only.

For others reading this, you should know that if your policy is with a non-standard carrier (high-risk policy for folks with bad driving records, DUIs, etc.), or if your only vehicle is a motorcycle, there is likely not be any substitute auto coverage at all.

Even of you have a standard auto policy, there may be a requirement that the insured auto be either not running or in for repairs So if you were to rent a car just for a vacation, while there was nothing wrong with your insured auto, the coverage would not extend to the rental.

Pull out your policies and find the definition of "substitute auto" so you know what it is and how it applies in your situation.

    Bookmark   November 29, 2011 at 4:35PM
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I feel your pain. Now days you must sit down and read and understand every word of any contract you sign. You may be lucky to overlook that for a while but eventually you will regret it.

    Bookmark   December 1, 2011 at 6:30AM
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"Woulda, coulda, shoulda, it's still the same -- we're responsible and will have to pay for the fix."

I'm sorry to hear this. If its any consolation, at least your thread will serve as a reminder to others who might not be aware of who is responsible when this type of thing happens.

Thanks for posting.

    Bookmark   December 3, 2011 at 7:06PM
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Check with your state insurance commissioner. I personally would not have Geico, but that is me. It seems to me the company fixing your car should have told you this information about whether the loaner is covered and offered additional insurance even if you had to pay for it. It is almost impossible to read and interrupt policies, and not all the information is included in the policy you have for your copy. Sorry, re-reading your notes, it is the dealer's responsibility to find out what insurance you had, so go to the owner of the dealer. You may have to pay for part of it but the dealer should pay for part of it also.

    Bookmark   December 6, 2011 at 4:07PM
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"It seems to me the company fixing your car should have told you this information"

I don't see how they could.

I know MY dealer and service garage do NOT have copies of MY insurance policy. Does yours?

It is MY responsibility to "read and interrupt" my policy, especially since I am the only on WITH the policy.

    Bookmark   December 6, 2011 at 4:26PM
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Do you have comprehensive coverage on the truck? Collision doesn't cover deer strikes anyway - comprehensive does. You may be in the clear here after all.

    Bookmark   January 18, 2012 at 2:16PM
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That is exactly why I don't go looking for a cheaper insurance policy. I don't drop something that I have used for years and that has paid when I need it.

    Bookmark   February 5, 2013 at 3:36AM
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I've been hit by a Geico driver--no way would I EVER have that insurance, based on the problems we had with them over that incident. But that doesn't help you now.

Before letting this go, I'd definitely have a chat with the state insurance commissioner, AND my lawyer, just to make sure there were no other alternatives (and that Geico was giving me the right info--they're not particularly known for their truthfulness from where I'm sitting, I'm afraid). Check all your options before forking out for the accident.

    Bookmark   February 12, 2013 at 10:20AM
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