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Automotive Guide
Serving the tri-county area of McLeod, Wright, and western Carver

Have questions about your auto insurance claim?

From the Minn. Dept. of Commerce

Winter driving in Minnesota has its hazards, and despite using caution and good sense, the best of drivers can end up with a crumpled fender or other auto damage requiring a trip to the repair shop.

When drivers file an insurance claim to help pay for repairs, they often have questions about what is required of them and the insurance company. The Minnesota Department of Commerce, which regulates the state's insurance industry, responds to requests for information or assistance through the Department's Consumer Response Team (CRT).

Nancy Link, who heads the CRT, says that among the first questions drivers ask are:

Can I take my car to the repair shop of my choice and must I obtain more than one estimate?

"Your insurance company cannot require you to have your vehicle repaired at a specific shop, but it may require you to obtain more than one estimate," Link said. "Therefore you can take the car to a shop of your choice, but if you are required to get more than one estimate and the shop of your choice is not the low bidder, you may be responsible for paying the difference."

Link points out that if the insurance company requires more than two estimates, it must pay for them.

Other questions commonly directed to the CRT, and answers from the Commerce CRT, are provided by Link. They include:

Does my insurance company have the right to inspect my vehicle?

While your insurance company does have a right to inspect your vehicle, it is not required to do so. If your insurer chooses to perform an inspection, it cannot require you to drive your vehicle to one of its "drive-in" claims center or other similar facility solely under control of the insurance company.

The inspection may be performed, however, by one of the company's "preferred" repair shops. Your insurer can require you to travel a reasonable distance to complete its inspection. If your vehicle can be safely driven, they must complete the inspection within 15 days after you notify them of your claim.

If your vehicle cannot be safely driven, your insurer must inspect the vehicle within five business days after you notify them of the claim.

Can the repair shop I select adjust its estimates and charges to absorb the deductible required by my insurance company?

The repair shop cannot change the cost of repairs to help you pay your deductible. Misrepresentation of these facts would constitute fraud.

Can I have my vehicle repaired with original equipment parts ­ and will the insurance company pay for them?

If parts are being replaced on your damaged vehicle, your insurance company is required to pay for original equipment parts, unless you agree to after market parts (parts not made by your vehicle's manufacturer).

However, your insurance company is only responsible for restoring your vehicle to the way it was before it was damaged. If your vehicle was not new at the time of the loss, the insurer does not have to pay for new original equipment parts.

They must pay for parts of "like kind and quality"(original equipment parts of comparable age and condition). If you request new original equipment parts on an older vehicle, you may have to pay the difference.

What is the difference between "betterment" and "depreciation?" Can my insurance company reduce my settlement based on either?

Betterment means that your vehicle is better than it was before it was damaged. Your insurance company may only reduce your settlement if your vehicle's resale value has increased over what it was before the accident.

Generally, an insurer will deduct the difference between the cost of a used part (appropriate for the age and condition of the vehicle) and the cost of the new part.

Betterment is only considered for major parts such as transmissions, blocks, etc. Items such as fenders and tires do not generally increase the overall resale value of the vehicle enough to merit a betterment reduction.

Depreciation refers to a reduction in your settlement based on the age or use of a part that is to be replaced. Certain parts on your vehicle have a "life expectancy" and your insurance company may take this into consideration.

For example, if a tire on your vehicle is expected to last 60,000 miles, but it was used for 30,000 miles at the time of the accident, your insurance company may elect to pay only 50 percent for a new tire.

If I do not agree with my insurance company about the amount of damage, is there something I can do?

Because your insurance company is required (by the terms of your policy) to return your vehicle to the condition it was in before it was damaged, they may offer one of two options:

1. The insurance company may assume all costs to satisfactorily repair your vehicle, including all obvious and hidden damage caused by the claim incident.

2. The insurance company may offer a cash settlement sufficient to pay for the satisfactory repair of your vehicle, including all obvious and hidden damage caused by the claim incident.

What if I cannot resolve a problem with my insurance company?

Speak first to the adjuster assigned to your claim, or his or her supervisor. If you still can't resolve the issue, contact the Department of Commerce CRT.

Call (651) 296-2488 in the Twin Cities area, or toll free 800-657-3602 from elsewhere in Minnesota. The CRT helps consumers with insurance questions and complaints.

If there is a dispute with a company or person licensed by the Department of Commerce, the CRT will attempt to resolve the matter informally.

If the issue cannot be resolved in this way, you may be asked to send a letter to the Department of Commerce in order to begin a formal investigation.

If you disagree with the insurance company about whether they have met their requirements under the law, contact the Department of Commerce. You also may have the ability to pursue action in small claims court or arbitration as outlined in your policy.

After an accident, will my insurance rates increase, even if the accident was not my fault?

You will probably pay more for your auto insurance for the next three years. Most insurance companies will "surcharge" your policy ­ meaning an increase in premium based upon an accident or a traffic violation. The surcharge is imposed as a result of the claim payment and not based on who was at fault. (Read your surcharge disclosure sheet provided with your policy).

Automotive Guide
Published October 2003

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