Auto insurance ripoff by GEICO

First of all, I'm not sure if it is entirely fair of me to single out
GEICO. What I just experienced may be endemic to the entire insurance
industy. Still, I am getting the shaft from GEICO, and part of what I
want to ask is whether what I experienced does, in fact, occur with
other insurance companies.

Basically, after nearly 30 years of driving, I had my first real
accident. Totally not my fault, I was stopped at a light, and the guy
behind me must have been distracted -- he simply slammed into me doing
about 20 miles an hour. That forced me into the car in front of me.

Fortunately, I am basically fine (at least so far, but we'll see if my
neck and back are still sore in two weeks). However, the rear and
front bumpers of my car were messed up pretty good. The body was
scrunched, just slightly. Now, several issues have come up with
GEICO:

1. I have an older car (about 10 years old), and the book value is
(according to GEICO) about $2000. GEICO also estimates the cost of
the repair about a bit over $2000. They say they will not pay for the
repairs, if the repairs cost more than the cost of the car. They have
referred to my car as a "total loss", or something to that effect,
even though in fact the car still runs well and could probably go for
another five or ten years. (I maintain the car well.)

So, First Question: Does this happen with other insurance companies,
that they will not pay for repairs if the estimated repair costs are
more than than the estimated value of the car?

If this is routine, is it even possible to purchase a rider on
insurance which says, in essence: "Even when the value of my car
drops, you will guarentee to cover the repair costs, up to $X? (Where
$X might be, say, $10,000.)

2. Now, GEICO will pay for what they say is the replacement value of
the car, which I can then spend on whatever I want (such as, as much
repairs as that will cover). However, GEICO has also told me that:
(a) I need to bring in my title to my car, for them to make a copy of
that. And...
(b) I'll have to "sign something" before they will give me the check.
And...
(c) After accepting this check, they will no longer provide collision
coverage for the car at all. (I can still get liability coverage.)

Second Question: What's up with all this -- the copy of the title to
my car, and the "something" they will make me sign, and dropping my
collision coverage? Would other insurance companies do the same
thing?

3. The car in front of me was a very, very expensive car. Although
the damage was minimal, the bumper on that thing could cost $100,000.
(Well, not that much, but a lot.) On the other hand, the bozo who
caused the collision (the one who hit me from behind) is apparently
not rich, and has about $10,000 of coverage for other people's cars.
So, GEICO is now saying they will not pay anything until they first
make sure that his $10,000 coverage will cover both the check they
write for me, and the check they write to the guy in front of me (the
guy with the fancy car that I was pushed into).

Third Question: Can GEICO withhold payment -- even though all parties
have already admitted I'm not at fault -- because the guy who caused
the accident might not have enough coverage?

Bottom line, I've paid GEICO good money for many years, never had an
accident, and now when I finally need them, they are basically saying,
"Our policies, plus our number crunching on your car and your
accident, boil down to 'Get Lost'."

Two final notes
(A) All three parties involved are insured by GEICO, yet the GEICO
people are acting as adversaries to each other, essentially
representing (or failing to represent) their clients as if they were
separate companies. If common sense prevailed here, you would think
that the fact that all three parties have poured money into GEICO
would make them realize the fairness of simply paying out what they
owe -- taking care of all their customers. You would also think one
person could oversee the entire process, but instead they got three
people dickering with each other.
(B) I asked GEICO if there was any person or committee within the
company I could appeal to. The answer was, "Here is the phone number
for the state insurance commissioner."

GEICO: "We're here 24 hours a day, 7 days a week, 365 days a year...
to tell you to go jump in a lake."

Comments, insight, and feedback are much appreciated. Maybe a final
question: Is there any chance of my getting anywhere if I bring in my
attorney? I don't want to spend more valuable money on the attorney,
if it won't change anything.

Steven O. wrote:
> First of all, I'm not sure if it is entirely fair of me to single out
> GEICO. What I just experienced may be endemic to the entire
insurance
> industy. Still, I am getting the shaft from GEICO, and part of what
I
> want to ask is whether what I experienced does, in fact, occur with
> other insurance companies.
>
> Basically, after nearly 30 years of driving, I had my first real
> accident. Totally not my fault, I was stopped at a light, and the
guy
> behind me must have been distracted -- he simply slammed into me
doing
> about 20 miles an hour. That forced me into the car in front of me.
>
> Fortunately, I am basically fine (at least so far, but we'll see if
my
> neck and back are still sore in two weeks). However, the rear and
> front bumpers of my car were messed up pretty good. The body was
> scrunched, just slightly. Now, several issues have come up with
> GEICO:
>
> 1. I have an older car (about 10 years old), and the book value is
> (according to GEICO) about $2000. GEICO also estimates the cost of
> the repair about a bit over $2000. They say they will not pay for
the
> repairs, if the repairs cost more than the cost of the car. They
have
> referred to my car as a "total loss", or something to that effect,
> even though in fact the car still runs well and could probably go for
> another five or ten years. (I maintain the car well.)
>
> So, First Question: Does this happen with other insurance companies,
> that they will not pay for repairs if the estimated repair costs are
> more than than the estimated value of the car?
>
> If this is routine, is it even possible to purchase a rider on
> insurance which says, in essence: "Even when the value of my car
> drops, you will guarentee to cover the repair costs, up to $X?
(Where
> $X might be, say, $10,000.)
>
> 2. Now, GEICO will pay for what they say is the replacement value of
> the car, which I can then spend on whatever I want (such as, as much
> repairs as that will cover). However, GEICO has also told me that:
> (a) I need to bring in my title to my car, for them to make a copy
of
> that. And...
> (b) I'll have to "sign something" before they will give me the
check.
> And...
> (c) After accepting this check, they will no longer provide
collision
> coverage for the car at all. (I can still get liability coverage.)
>
> Second Question: What's up with all this -- the copy of the title to
> my car, and the "something" they will make me sign, and dropping my
> collision coverage? Would other insurance companies do the same
> thing?
>
> 3. The car in front of me was a very, very expensive car. Although
> the damage was minimal, the bumper on that thing could cost $100,000.
> (Well, not that much, but a lot.) On the other hand, the bozo who
> caused the collision (the one who hit me from behind) is apparently
> not rich, and has about $10,000 of coverage for other people's cars.
> So, GEICO is now saying they will not pay anything until they first
> make sure that his $10,000 coverage will cover both the check they
> write for me, and the check they write to the guy in front of me (the
> guy with the fancy car that I was pushed into).
>
> Third Question: Can GEICO withhold payment -- even though all
parties
> have already admitted I'm not at fault -- because the guy who caused
> the accident might not have enough coverage?
>
> Bottom line, I've paid GEICO good money for many years, never had an
> accident, and now when I finally need them, they are basically
saying,
> "Our policies, plus our number crunching on your car and your
> accident, boil down to 'Get Lost'."
>
> Two final notes
> (A) All three parties involved are insured by GEICO, yet the GEICO
> people are acting as adversaries to each other, essentially
> representing (or failing to represent) their clients as if they were
> separate companies. If common sense prevailed here, you would think
> that the fact that all three parties have poured money into GEICO
> would make them realize the fairness of simply paying out what they
> owe -- taking care of all their customers. You would also think one
> person could oversee the entire process, but instead they got three
> people dickering with each other.
> (B) I asked GEICO if there was any person or committee within the
> company I could appeal to. The answer was, "Here is the phone number
> for the state insurance commissioner."
>
> GEICO: "We're here 24 hours a day, 7 days a week, 365 days a year...
> to tell you to go jump in a lake."
>
> Comments, insight, and feedback are much appreciated. Maybe a final
> question: Is there any chance of my getting anywhere if I bring in
my
> attorney? I don't want to spend more valuable money on the attorney,
> if it won't change anything.

Maybe I missed something.
What is the make, model, year of the vehicle?


I have Allstate, my parked vehicle was the #3 in a 4 vehicle chain
accident. I didn't have rental car coverage, and paid $200 out of
pocket, insurance covered the rest.

:/

If at the end of the story you still have a major complaint or find that
slong the way, yuo are being treated unfairly by any insuracne carrier,
write to teh insurance commissioner of your state and/or teh states where
the insured are based out of.

It is amazing how easily an insurance company can be convinced to do the
proper thing when the governing body is asking them what their position on a
situation is...

From experience, I know they will pay for a car that is "totaled" and let
you keep it without all that contract stuff... At least in NJ.

Joe in Northern, NJ
V#8013 '86 VN750

Ride a motorcycle in or near NJ?
http://tinyurl.com/4zkw8
http://www.youthelate.com

Young Life? eMail me!

Born once - Die twice. Born twice - Die only once. Your choice...

Why the hell do insurance companies love to total cars? They don't seem
to realize that only walking away with 2k dollars to buy a 16K-20K dollar
car when you have a perfectly good (albeit damaged) car for 0 dollars is
bad.

Magnulus wrote:
>
> Why the hell do insurance companies love to total cars? They don't seem
> to realize that only walking away with 2k dollars to buy a 16K-20K dollar
> car when you have a perfectly good (albeit damaged) car for 0 dollars is
> bad.

He will be able to keep the car. The insurance companies have
formulas they use in cases like this. I had a similar situation
with GEICO, I have an extended warranty with them and the
transmission died. I was told that NYS law says if the cost of
the repair is more than 75% of the value of the car, they have
to total it. In my case, the settlement turned out to be more
than the cost to repair the transmission with the deductible
factored in (they lowered the settlement by $100 and I kept the
car). And in the end, they told me I could keep my extended
warranty if I faxed them proof of repair, which I did.

Bill

Steven O. > wrote in
:

> First of all, I'm not sure if it is entirely fair of me to single out
> GEICO. What I just experienced may be endemic to the entire insurance
> industy. Still, I am getting the shaft from GEICO, and part of what I
> want to ask is whether what I experienced does, in fact, occur with
> other insurance companies.

No, you are not fair to single out Geico for following standard
industry practice.

>
> Basically, after nearly 30 years of driving, I had my first real
> accident. Totally not my fault, I was stopped at a light, and the guy
> behind me must have been distracted -- he simply slammed into me doing
> about 20 miles an hour. That forced me into the car in front of me.
>
> Fortunately, I am basically fine (at least so far, but we'll see if my
> neck and back are still sore in two weeks). However, the rear and
> front bumpers of my car were messed up pretty good. The body was
> scrunched, just slightly. Now, several issues have come up with
> GEICO:
>
> 1. I have an older car (about 10 years old), and the book value is
> (according to GEICO) about $2000. GEICO also estimates the cost of
> the repair about a bit over $2000. They say they will not pay for the
> repairs, if the repairs cost more than the cost of the car. They have
> referred to my car as a "total loss", or something to that effect,
> even though in fact the car still runs well and could probably go for
> another five or ten years. (I maintain the car well.)

So double check the book value on KBB.com. See if it really is worth
$2000. If the car is in better than average shape (there are clear
guidlines on kbb.com) then you can make the case that the car is
worth more.

Now look at this from the point of view of the insurance company.
they have a choice: 1) pay to repair the car. or 2) buy the car from you
at book value. They will do which ever costs less. So if the cost to
repair the car is more than the book value it will be decleared a
total loss. This is not fair I know. I went through this last year.
You take care of a car and hope to drive it a good long time, then
some idiot on a cell phone creams you from the back.
>
> So, First Question: Does this happen with other insurance companies,
> that they will not pay for repairs if the estimated repair costs are
> more than than the estimated value of the car?
>
Yes, this is all pretty much standard industry practice.


> If this is routine, is it even possible to purchase a rider on
> insurance which says, in essence: "Even when the value of my car
> drops, you will guarentee to cover the repair costs, up to $X? (Where
> $X might be, say, $10,000.)

Nope. Not that I know of.
>
> 2. Now, GEICO will pay for what they say is the replacement value of
> the car, which I can then spend on whatever I want (such as, as much
> repairs as that will cover). However, GEICO has also told me that:
> (a) I need to bring in my title to my car, for them to make a copy of
> that. And...
> (b) I'll have to "sign something" before they will give me the check.
> And...
> (c) After accepting this check, they will no longer provide collision
> coverage for the car at all. (I can still get liability coverage.)
>
> Second Question: What's up with all this -- the copy of the title to
> my car, and the "something" they will make me sign, and dropping my
> collision coverage? Would other insurance companies do the same
> thing?

Again, standard industry practice. Normaly when a car is totaled the
insurance company will take the car. But if you want, they will pay
residual value on the car. But they will only pay once. After that
the car is determined to have no value. Even if you get it fixed to
pre-loss condition. They want to keep a copy of the title and want to
see it to make sure that you don't have a "wreck" or "Rebuild" title.
In either case the car would have been totaled at some time in the
past and they will not pay on it again.

Because of the way most people drive and keep cars, they are
considered to always lose value. Althought a good rebuild and
restore can increase the value of a car. In that case you should
look into special insurance that is issued to owners of classic
cars.

>
> 3. The car in front of me was a very, very expensive car. Although
> the damage was minimal, the bumper on that thing could cost $100,000.
> (Well, not that much, but a lot.) On the other hand, the bozo who
> caused the collision (the one who hit me from behind) is apparently
> not rich, and has about $10,000 of coverage for other people's cars.
> So, GEICO is now saying they will not pay anything until they first
> make sure that his $10,000 coverage will cover both the check they
> write for me, and the check they write to the guy in front of me (the
> guy with the fancy car that I was pushed into).
>
> Third Question: Can GEICO withhold payment -- even though all parties
> have already admitted I'm not at fault -- because the guy who caused
> the accident might not have enough coverage?

Check your policy. You should have un-insured/under-insured motorist
coverage to protect yourself in case of such an event.

>
> Bottom line, I've paid GEICO good money for many years, never had an
> accident, and now when I finally need them, they are basically saying,
> "Our policies, plus our number crunching on your car and your
> accident, boil down to 'Get Lost'."
>
You would get this from anyone else.

--
Just my $0.02 worth. Hope it helps
Gordon Reeder
greeder
at: myself.com

Hey Dubya!
Unity means let's try to meet each other halfway

Word to the wise: Never buy collision insurance on a $2000 car. I stop
collision once my car goes below $8000. It's basically not worth it if
you determine the odds of you totalling the car multiplied by your yearly
premiums. There is a reason insurance is such a profitable industry,
it's legalized gambling and the insurance companies are the house. If
you get in an accident without collision you're much better off using
your saved premiums to pay off whatever damage there is. If the accident
is totally not your fault, you can deal with the other person's insurance
and if it's a reputable company, they will cut you a check. Someone rear
ended me on my motorcycle that wasn't insured for collision and the other
guy's insurance company, State Farm, were more than happy to cut me a
check for the entire value of the bike.

As for liability, that's a different issue in that those costs can go
real high. Insurance should only be purchased for catastrophic events.
You should not buy insurance with the expectation to nickle and dime the
insurance company. And $2000 is a relatively minor loss, not worth
paying to protect.

Steven O > wrote in message
...

> First of all, I'm not sure if it is entirely fair of me to single out GEICO.
> What I just experienced may be endemic to the entire insurance industy.

That Freud fella is ****ing himself laughing for some reason...

> Still, I am getting the shaft from GEICO, and part
> of what I want to ask is whether what I experienced
> does, in fact, occur with other insurance companies.

> Basically, after nearly 30 years of driving, I had my first real accident.
> Totally not my fault, I was stopped at a light, and the guy behind me
> must have been distracted -- he simply slammed into me doing about
> 20 miles an hour. That forced me into the car in front of me.

> Fortunately, I am basically fine (at least so far, but we'll
> see if my neck and back are still sore in two weeks).

You didnt have the headrest up high enough.

> However, the rear and front bumpers of my car were messed up pretty good. The
> body was scrunched, just slightly. Now, several issues have come up with
> GEICO:

> 1. I have an older car (about 10 years old), and the book value is
> (according to GEICO) about $2000. GEICO also estimates the cost
> of the repair about a bit over $2000. They say they will not pay for
> the repairs, if the repairs cost more than the cost of the car. They
> have referred to my car as a "total loss", or something to that effect,
> even though in fact the car still runs well and could probably go for
> another five or ten years. (I maintain the car well.)

> So, First Question: Does this happen with other insurance
> companies, that they will not pay for repairs if the estimated
> repair costs are more than than the estimated value of the car?

Yep.

And while it might not make much sense to you, it clearly
does make sense if say the repair cost was say $6K instead.

> If this is routine, is it even possible to purchase a rider on
> insurance which says, in essence: "Even when the value
> of my car drops, you will guarentee to cover the repair
> costs, up to $X? (Where $X might be, say, $10,000.)

Nope. Not without silly premiums, anyway.

> 2. Now, GEICO will pay for what they say is the replacement value of
> the car, which I can then spend on whatever I want (such as, as much
> repairs as that will cover). However, GEICO has also told me that:
> (a) I need to bring in my title to my car, for them to make a copy of
> that. And...
> (b) I'll have to "sign something" before they will give me the check.
> And...
> (c) After accepting this check, they will no longer provide collision
> coverage for the car at all. (I can still get liability coverage.)

> Second Question: What's up with all this -- the copy of the title to
> my car, and the "something" they will make me sign, and dropping my
> collision coverage? Would other insurance companies do the same
> thing?

> 3. The car in front of me was a very, very expensive car. Although
> the damage was minimal, the bumper on that thing could cost $100,000.
> (Well, not that much, but a lot.) On the other hand, the bozo who
> caused the collision (the one who hit me from behind) is apparently
> not rich, and has about $10,000 of coverage for other people's cars.
> So, GEICO is now saying they will not pay anything until they first
> make sure that his $10,000 coverage will cover both the check they
> write for me, and the check they write to the guy in front of me (the
> guy with the fancy car that I was pushed into).

They cant get away with that. They are liable to you
regardless of what they can get off the guilty party.

> Third Question: Can GEICO withhold payment -- even though
> all parties have already admitted I'm not at fault -- because the
> guy who caused the accident might not have enough coverage?

Well, they can, but they wouldnt last long in the small claims
court if they were silly enough to try pulling that stunt.

> Bottom line, I've paid GEICO good money for many years,
> never had an accident, and now when I finally need them, they
> are basically saying, "Our policies, plus our number crunching
> on your car and your accident, boil down to 'Get Lost'."

Insurance companys are notorious for making that sort
of ambit claim and caving in when you demonstrate that
you know what the law has to say on the matter.

They can however get away with just paying
you the value of the car and not repairing it.

> Two final notes
> (A) All three parties involved are insured by GEICO,
> yet the GEICO people are acting as adversaries to each
> other, essentially representing (or failing to represent)
> their clients as if they were separate companies.

Or that's the line of bull**** they are feeding you, anyway.

> If common sense prevailed here, you would think that the
> fact that all three parties have poured money into GEICO
> would make them realize the fairness of simply paying out
> what they owe -- taking care of all their customers.

Insurance companys hardly ever work like that.

Its all about minimising payouts when they become necessary.

> You would also think one person could oversee the entire process,
> but instead they got three people dickering with each other.

Paper shufflers have always been into that sort of terminal insanity.

> (B) I asked GEICO if there was any person or committee
> within the company I could appeal to. The answer was,
> "Here is the phone number for the state insurance commissioner."

> GEICO: "We're here 24 hours a day, 7 days a week,
> 365 days a year... to tell you to go jump in a lake."

And you are welcome to tell them to shove their business
where the sun dont shine, after they have paid you your $2K.
Or more if you can establish that they are lying about the book value.

That would fix the problem with insuring the car for damage
if you choose to repair it with the $2K they pay you.

> Comments, insight, and feedback are much appreciated.

> Maybe a final question: Is there any chance of
> my getting anywhere if I bring in my attorney?

Yes, but its not the cheapest approach.

> I don't want to spend more valuable money
> on the attorney, if it won't change anything.

It likely wont on the $2K if they arent lying about the book value.

Magnulus > wrote in message
...

> Why the hell do insurance companies love to total cars?

Because that minimises the payout when the repair
cost is higher than the book value of the car.

> They don't seem to realize that only walking away
> with 2k dollars to buy a 16K-20K dollar car

They're essentially claiming that you can buy another car
for $2K which would be as good as the wreck pre accident.

> when you have a perfectly good (albeit
> damaged) car for 0 dollars is bad.

On Fri, 22 Apr 2005 01:32:47 GMT, Steven O. > wrote:

>1. I have an older car (about 10 years old), and the book value is
>(according to GEICO) about $2000. GEICO also estimates the cost of
>the repair about a bit over $2000. They say they will not pay for the
>repairs, if the repairs cost more than the cost of the car. They have
>referred to my car as a "total loss", or something to that effect,
>even though in fact the car still runs well and could probably go for
>another five or ten years. (I maintain the car well.)
>
>So, First Question: Does this happen with other insurance companies,
>that they will not pay for repairs if the estimated repair costs are
>more than than the estimated value of the car?

Note that all my comments are about California. Insurance laws vary among
the states, particularly in "No Fault" states.

It is standard practice to limit the cost of repairs to the cost of the
vehicle. The the absurd case of a junker worth $500. Does anyone really
expect the insurance company to pay many thousands to repair the damage
from a major accident? Of course not.

>
>If this is routine, is it even possible to purchase a rider on
>insurance which says, in essence: "Even when the value of my car
>drops, you will guarentee to cover the repair costs, up to $X? (Where
>$X might be, say, $10,000.)

Stated value insurance can be purchased but it is expensive and only
available through specialty insurance brokers. This is what the owners of
show cars used to cover there restored cars. But I believe they have to
provide apprasials to show the car is worth the the amount of insurance
they are seeking.

>
>2. Now, GEICO will pay for what they say is the replacement value of
>the car, which I can then spend on whatever I want (such as, as much
>repairs as that will cover). However, GEICO has also told me that:
>(a) I need to bring in my title to my car, for them to make a copy of
>that. And...
>(b) I'll have to "sign something" before they will give me the check.
>And...
>(c) After accepting this check, they will no longer provide collision
>coverage for the car at all. (I can still get liability coverage.)
>
>Second Question: What's up with all this -- the copy of the title to
>my car, and the "something" they will make me sign, and dropping my
>collision coverage? Would other insurance companies do the same
>thing?

Again, standard practice. They are going to total the car, which means
they are going to write it off their books. If you continue to drive the
car, which you can do, they will no longer pay for any more repairs, since
they have already paid as much as the car is worth. This takes us back to
your first question.

>Third Question: Can GEICO withhold payment -- even though all parties
>have already admitted I'm not at fault -- because the guy who caused
>the accident might not have enough coverage?

Most likely GEICO doesn't owe you any money unless you have
uninsured/underinsured coverage. You are supposed to collect for your
damages from the person that caused them (or their insurance carrier).

Many insurance companies will subrogate the claim for you. This means they
will pay you then collect from the responsible party. They usually aren't
under any obligation to do so and would certianly hold up if it looks like
they won't get their compensation.

>
>Bottom line, I've paid GEICO good money for many years, never had an
>accident, and now when I finally need them, they are basically saying,
>"Our policies, plus our number crunching on your car and your
>accident, boil down to 'Get Lost'."

Yes you have paid a lot but unfortunately didn't have a clear understanding
what you were paying for. A very strong arguement could be made that you
should NOT be carrying collision on a car worth only $2K.

>
>Two final notes
>(A) All three parties involved are insured by GEICO, yet the GEICO
>people are acting as adversaries to each other, essentially
>representing (or failing to represent) their clients as if they were
>separate companies. If common sense prevailed here, you would think
>that the fact that all three parties have poured money into GEICO
>would make them realize the fairness of simply paying out what they
>owe -- taking care of all their customers. You would also think one
>person could oversee the entire process, but instead they got three
>people dickering with each other.
>(B) I asked GEICO if there was any person or committee within the
>company I could appeal to. The answer was, "Here is the phone number
>for the state insurance commissioner."
>
>GEICO: "We're here 24 hours a day, 7 days a week, 365 days a year...
>to tell you to go jump in a lake."
>
>Comments, insight, and feedback are much appreciated. Maybe a final
>question: Is there any chance of my getting anywhere if I bring in my
>attorney? I don't want to spend more valuable money on the attorney,
>if it won't change anything.

The general rule is insurance companies are your good friend until you need
them. Consider yourself lucky that only a "small" amount is at stake. I
know $2K is not a trivial sum of money, but in the San Diego are we two
huge fires a couple of years back that destroyed about 2500 homes. Many of
those people are being screwed out of $200 to $500K by their friendly
insurance companies.