When you cause an auto accident you become obligated by law to repair or replace the other person’s damaged property. Most people simply turn the matter over to their insurance company, trusting they will handle the claim and pay what they owe. What they owe is either the cost to replace the vehicle if the repair charge exceeds the fair market value, or the cost in repairs to fix the damage. They are also obligated to pay for the reasonable loss of use of the vehicle while the car is in the shop. This essentially translates into what it would cost to rent a comparable vehicle. A person who drives a luxury vehicle or a large heavy duty car is entitled to what it would cost to replace that same vehicle until the repairs are done. In other words, you don’t have to accept a sub compact for a rental car if you were driving a suburban. Unfortunately, it is a fairly common practice in the insurance industry to deny payment for comparable rental vehicles. Misleading the injured consumer by stating this is company policy which can’t be changed or fraudulently claiming the law doesn’t require otherwise are common practices. Doing so allows the company to pay less than what is owed on the claim, thereby creating additional profit at the expense of the injured consumer. By multiplying this practice over thousands of claims, insurance companies can avoid paying millions of dollars they’d normally be required to do if they followed the law. Sadly, this practice has been prevalent for decades. The companies incur little risk. There seems to be no interest by any state regulatory authorities to step in and stop the practice. The worst that can happen is a consumer digs in their heels or hires an attorney, resulting in the company merely having to pay what their customer owed in the first place.
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