Dealership Totals Your Car: Whose Insurance Claim is it?

John Hooper’s story hit the internet last week.  He was the proud owner of a 580 horse power 2012 Chevrolet Camaro ZL1.  John took his Camaro to the local dealership, First State Chevy in Georgetown, Delaware, for warranty work on an issue with the car’s paint.  One of the dealership’s employees took his car for an unauthorized joy ride on a Sunday in December when the dealer was closed.

The unauthorized ride ended with the employee shearing off a telephone pole.  State Chevy called John the next morning to tell him what happened and by the end of the week, the company’s insurer had determined the car was a total loss.  The $55,000 Camaro had about 10,000 miles on it.

One of the questions I have in a case like this is whose insurance claim is it?  Is it the dealership’s commercial policy or would it be the car owner’s insurance company to pick up the tab for the totaled Camaro?  My question centered on considering if an employee of the dealership is a permissive driver in the way we may let a friend of family member drive our car to the store?

It turns out the dealership’s insurance will be the one held responsible, and that’s only if they file a claim.  Based on the content of the news report, the dealer may handle the situation themselves.  The first step State Chevy took was to fire the responsible employee.  They did attempt to pursue legal charges against the now former employee; however, no crime was committed as the car was in the legal possession of the dealer at the time of the accident.

The next step State Chevy took was to offer a replacement Camaro to John Hooper.  According to Hooper, the cars that were offered to him as a replacement to his car were not worth the same amount as his car prior to the accident.  Both parties were at an impasse at the time the news report was published; however based on an insurance perspective, the dealer will need to provide car of equal, not lesser value to Hooper’s Camaro.  If they don’t, he would be able to file a claim with his company and let them subrogate the dealer or the dealer’s insurance company for damages.

One of the strangest claims I ran across personally, was when I was quoting a Dallas woman’s car insurance.  I ran the CLUE report to see if there would be any claims that would cause the premium to increase.  This report shows all prior claim activity, and in this case there was a claim involving her car, but the report was not clear about what had happened.  It turns out the claim wasn’t even hers.  I called for details and her story was unlike any I’ve heard before or after our conversation.

She’d taken her car in for some repair work at a local repair facility.  To perform the work, a service technician drove the car into the service bay over the car lift.  The technician then got out of the car and pushed the button on the lift controls to lift the car to a height where he would then walk under the car and work on her car.  The only problem was the technician hadn’t properly extended the lift’s support arms to the proper places under the car and it fell off the lift from a height of about 6 feet.  While her car wasn’t totaled, the damage was substantial and the repair shop’s policy was responsible.

Have you had claim as strange as either of these?  Share your story, questions, or comments with me in the comments section of our blog or on our Google + and Facebook pages.  I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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