Dealer crashes customers car | Page 8 | FerrariChat

Dealer crashes customers car

Discussion in 'FF/Lusso' started by RASHI 36, Jul 14, 2014.

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  1. VIZSLA

    VIZSLA Four Time F1 World Champ
    Owner

    Jan 11, 2008
    41,690
    Sarasota
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    David
    In a perfect world they'd go down given the loss in value.
     
  2. galt

    galt Formula 3
    Owner Silver Subscribed

    Jun 19, 2005
    1,139
    + 1 more!
     
  3. 4th_gear

    4th_gear F1 Rookie

    Jan 18, 2013
    4,425
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    Michael
    Paul, I am almost 100% sure you are wrong.

    Think of an insurance company as a profit-making business, not a government institution or a charity. I am also a scientist by training as well as a business school graduate, BTW.

    Insurance companies base your rates on actuarial data on people with your demographics as well as base rates on your personal claims history. If you have no claims on your record, your demographics essentially determines your rates. But if you have claims or tickets, your rates go up. It doesn't matter if someone else caused the accident, rubbed your car in the parking lot or if the officer was wrong to issue the ticket, the insurance agent will not talk to you to hear your sad story. They go by the numbers - your rates go up.

    Think of it this way. Even if your dealer wrecked your car, if you continue to own the car with a $50,000 price tag on a minor fender bender and you keep taking it back to the dealer (who wrecked your car) would you not expect an intelligent actuary will assume your risks of another $50,000 will go up? Where do you think this insurer gets the $50,000 to repair your car? They essentially get it from the rates they charge.

    Your insurer has to raise rates to cover the costs and future risks. And in this case, there is no other guy. They can't raise rates on the dealer because they are not the dealer's insurer. Where do you think costs of insurance payouts come from?

    The only other thing your insurer can do is subrogate against the dealer and try to get his insurer to pay them back. This is not always successful because as in this case it relies entirely on information supplied by the dealer if there is no accident report by an on-the-scene policeman who saw the vehicle, accident scene or spoke to the driver. If subrogation fails, the car owner will be charged by the insurer with an at-fault accident and his rates will go up.

    Based on the belligerent treatment from the dealer, do you expect them to provide convenient information for the car owner's insurer to win a subrogation?
     
  4. 4th_gear

    4th_gear F1 Rookie

    Jan 18, 2013
    4,425
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    Michael
    Here's another bit of information.

    Yesterday, I went to the Dodge dealer who sold me my truck and does the service work on it. I walked into the shop manager's office and had a long chat with him about this case, in an anonymous manner.

    He said flat-out that the dealer is responsible for the insurance and repairs. He said he had a similar case earlier this year and because he was unsure of the liability he contacted the Insurance Bureau of Canada. They sent him an email clearly stating that if the car was driven by the dealer's employee while conducting dealer service, the dealer's garage insurance is responsible for the repairs.

    Of course, you still have to make the dealer file the claim (or pay out of pocket) and you may have to file a complaint with the Insurance Bureau of Canada (or similar insurance oversight in the US) as well as the dealer licensing board for the province (or state in the US).

    All of this nonsense could be avoided if the dealer were honest and did the right thing in the beginning - FNA, I HOPE YOU ARE READING THIS! I am royally pi$$ed off to learn that one of your dealers is ruining an innocent good customer's ownership experience and I will not forget this episode.
     
  5. Noblesse Oblige

    Noblesse Oblige F1 Veteran

    Nov 7, 2011
    6,114
    Three Places
    This makes sense. Normally if you lend your car to someone who then trashes it, your insurance is the primary agent even though the person you loaned it to may have insurance. But this situation is different. You turn you car over to a professional who is in the business of performing service on such cars. You have an expectation that the dealer will then take on the responsibility for the care and condition of the car. Not at all the same as loaning it to a friend.
     
  6. Caeruleus11

    Caeruleus11 F1 World Champ
    Rossa Subscribed

    Jun 11, 2013
    10,860
    I think the dealers carry insurance which takes over for things such as authorized maintenance and storage of vehicles. If this accident was part of that and was authorized by the client and the dealer then the dealership insurance will cover it. However, what if the client insisted there be no test drive and the dealer agreed in writing they would not do it- then its possible the dealership takes the position the employees were acting outside their scope of employment and in essence stole the car.... that might be a whole new ball game.

    In any event I would like to hear more from the OP....
     
  7. 4th_gear

    4th_gear F1 Rookie

    Jan 18, 2013
    4,425
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    Michael
    I disagree. Please read the attachments I posted where a auto dealer's insurance is clearly described as including garage keeper's liability coverage. I also reported in another post that my insurance broker told me she would not issue business insurance to an auto dealer without also including the garage keeper's liability insurance.

    What your employees do at work is your company's responsibility and the OP's car is also in your company's possession and care, on your property. The car keys are supposed to be kept safe from unauthorized access. It's clear to me that "keeping a garage" as a business includes keeping customers' vehicles safe from unauthorized use (joy rides) and accidental damage. To me, this is a definition of the term "garage keeper".

    So I believe the dealer is still responsible in the case that you describe. The only situation where the dealer may not be responsible is if vandals broke into the dealership in spite of proper care provided by the dealer and damaged your car in the process of committing a crime.
     
  8. 4th_gear

    4th_gear F1 Rookie

    Jan 18, 2013
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    Michael
    BTW, let's not forget that all (car) insurance include a deductible. You pay the deductible even though your insurance pays the balance of the reparations. So even if you mistakenly believe the OP's rates won't go up because he wasn't driving the car, he still has to pay the deductible if a claim is filed on his insurance policy.

    The golden rule about insurance these days is that you should never file an insurance claim unless the loss would otherwise be unbearable and also way over your deductible.
     
  9. Caeruleus11

    Caeruleus11 F1 World Champ
    Rossa Subscribed

    Jun 11, 2013
    10,860
    Thats a good point. Anyway, I'd like to hear what the OP has to say now.
     
  10. Noblesse Oblige

    Noblesse Oblige F1 Veteran

    Nov 7, 2011
    6,114
    Three Places
    As a sidebar, absolutely right. And carry as high a deductible as you can.
     
  11. Elsi

    Elsi Formula 3
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    Sep 26, 2010
    1,630
    Zürich (Switzerland)
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    Markus
    Zuckerman – I feel with you!

    About two and a half years back my mechanic crashed my 575M: http://www.ferrarichat.com/forum/456-550-575-sponsored-bradan/353855-sad-day-me-my-575m.html

    In contrast to you my car was several years old and had 33 000 km on the clock. The repair bill would have been CHF 117 000 (this is about the same in USD) and so the car was totaled.

    In contrast to your dealer, mine was very responsive and the mechanic who crashed the car (actually it was the foreman of the shop) was very honest.

    As in your case, my insurance paid and cleared this case in the background with the insurance company of the shop owner. I don’t even know the name of the shops insurance but of course it is a problem of the shop’s and not of your insurance.

    In my case it all turned out very well and after one month I was back on the road with an even better Ferrari (HGTC version instead of the standard 575M).

    Hope your story will also end well!

    All the best

    Markus
     
  12. Nospinzone

    Nospinzone F1 Veteran

    Jul 1, 2013
    7,348
    Weston, MA
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    Paul
    Yes but Michael I KNOW you are 100% wrong on the way it works in Massachusetts! :)

    Here is a major factor in this state, the auto insurers are REGULATED by the state insurance commission. The commission makes the rules and also SETS the RATES each year. You correct in general that if there is an uptick in claims, the insurers will raise rates, but it is a universal increase for all insured, and specific for those who had at fault accidents.

    If a driver is not at fault for an accident, their insurance rates are not increased whatsoever. In the last 5 years I have been rear ended twice and my wife twice (two were as a result of the other party texting at the time). All four accidents were of course not our fault. We both continue to be the highest rated drivers and our insurance has not increased one penny as a result of the accidents. Now the people who were at fault have seen their rates increase for the next 6 years. My wife also had an incident where a steel door was thrown out of a third story window and landed on her Infiniti J30t. Again, not her fault, insurance paid to repair the car, no change in insurance rate.

    As for subrogation, I don't know exactly how it works between the insurance companies, but I am sure that an at fault party cannot simply refuse to divulge who his insurer is. Furthermore why would they do that, it would mean they would be on the hook for the whole claim.

    Michael your arguments are maybe how things should work as designed in business school, but in the real world ( of Massachusetts at least) you're dreaming. :)
     
  13. VIZSLA

    VIZSLA Four Time F1 World Champ
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    Jan 11, 2008
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    David
    In the States Mass. auto is not the norm and can't be used as a reference.
     
  14. Noblesse Oblige

    Noblesse Oblige F1 Veteran

    Nov 7, 2011
    6,114
    Three Places
    Great story. I suspect that this kind of outcome is more likely in der Schweiz.
     
  15. Nospinzone

    Nospinzone F1 Veteran

    Jul 1, 2013
    7,348
    Weston, MA
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    Paul
    Yes, you are right about that. In fact over the years many auto insurance companies have refused to do business in Mass. due to the restrictions in doing business here.

    However, my point remains that each state has its own rules and regulations. Auto insurance is not a federally regulated industry so universal statements for how auto insurance operates in North America are baseless.
     
  16. 4th_gear

    4th_gear F1 Rookie

    Jan 18, 2013
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    Michael
    Paul, I think you may be confused.

    Your MA car insurance system essentially works the same way as the one I described, and similar to the system in Ontario. You mentioned "at fault" accidents affecting what you pay for insurance. It's the same here and pretty well everywhere I imagine. It's nothing new or novel. Here's the Ontario Govt website with additional information on how auto insurance is set in Ontario in case you want to check. And here's some detail on how accidents affect Ontario insurance rates.

    And here's a screenscrape from your Massachusetts Registry of Motor Vehicles website describing how the Safe Driver Insurance Plan (SDIP) works. You have a surcharge system in MA whereby some drivers, with less-than-clean driving records, pay more for insurance.

    You also mentioned "the auto insurers are REGULATED by the state insurance commission" - well, it's the same here too. Ontario insurance rates are regulated by the provincial government. Here's an excerpt:
    As for your comment "your arguments are maybe how things should work as designed in business school, but in the real world ( of Massachusetts at least) you're dreaming.". I guess you don't care for US business schools.

    Actually, I had already worked several full-time jobs before studying for my Canadian MBA by attending evening school for 5 years while holding a full-time job. While I was studying, I was also part of the software industry and I helped make your corn flakes, build GM cars, manufacture your Intel chips, made the Pfizer medication you took. I wasn't dreaming and partying like frat boys. ;)

    I mentioned looking at car insurance from a business and not a layman's perspective because one needs to be sanguine about how the insurance company will respond if you file expensive insurance claims.

    You mention personal experiences with rear-enders. Those involve accident reports made by both car owners. In this case, the OP never got to report the accidents first-hand. I'm not even sure the accident was reported. With rear-enders, it's also usually an open-and-shut case unless the driver behind you has witness or evidence showing you caused the accident. The rear-ended party is almost never at-fault.

    And, the OP's car was not in a rear-ender… also, no steel door was thrown at his car. ;) So while your examples may show your insurance policies in a healthy light, they do not really relate to the OP's situation. No rear-ender, no steel door falling on his car. He wasn't even driving the car.

    As for subrogation in this case, it essentially means the dealer does not want to admit responsibility and accept liability for the repairs. They are telling the OP that his insurance company will have to go after the dealer's insurance company if they want to get their money back, along with the OP's deductible.

    This is what I was trying to point out. I believe there are only 2 possible logical scenarios:
    A) the dealer knows they will eventually have to accept responsibility and liability for reparations. In that case, they should not inconvenience the OP further and just either eat the cost of repairs or file an at-fault claim on their garage insurance, as well as negotiate an agreeable settlement regarding diminished value.

    B) the dealer thinks they may be able to avoid accepting responsibility and liability for reparations and diminished value. In this case, the dealer makes the OP file a claim, making him pay the deductible (which is usually at least $5,000 or more) and make the OP and his insurer go after the dealer to get their money back; and at the same time, given the hostile circumstances, stall any negotiated settlement for diminished value at least until the subrogation process is completed.​

    I leave you to decide which of the 2 scenarios the dealer is playing out.
     
  17. Nospinzone

    Nospinzone F1 Veteran

    Jul 1, 2013
    7,348
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    Paul
    Michael, I know you are the one who has become confused. Let's keep this simple. In post #162 you wrote -

    I responded in post #175, I wrote -

    And in your post #191 you posted the proof in the screen shots that confirms my statement that in Massachusetts (and probably Ontario) that, "Since the OP was not at fault for the accident, his insurance rates would not increase one penny."


    And BTW, in Massachusetts the OP would pay no deductible for an accident not his fault. Deductibles apply to at fault accidents.
     
  18. patekswiss

    patekswiss Formula 3

    Mar 31, 2014
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    Lorenzo
    This thread is taking on a certain "Bleak House" quality :)
     
  19. 4th_gear

    4th_gear F1 Rookie

    Jan 18, 2013
    4,425
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    Michael
    Paul, I think you completely miss the point of what I find repulsive about the dealer's behaviour.

    The dealer should not force the OP to use his insurance to cover the accident and then have the OP's insurer subrogate to re-assign the fault to the dealer. If the dealer always intended to accept blame and liability, they would be wasting time and money. It costs money for the insurer to subrogate. If the dealer were decent to the OP he would have filed a claim under their garage insurance and negotiated with the OP for diminished value.

    I ask you - what other use is the dealer's "garage keeper legal liability" insurance good for? The dealer is obviously hoping to avoid liability, meaning he is hoping the OP will end up being the at-fault party should subrogation fail.

    Subrogation is "the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties." It is not a compensation. It is the re-assignment of fault to the other party.

    if the OP's insurer is not successful at subrogation against the dealer, the OP will be deemed "at-fault" for the accident. He would have to pay the deductible and his rates will go up - even in MA.
     
  20. 4th_gear

    4th_gear F1 Rookie

    Jan 18, 2013
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    Michael
    Yes. The dealer should have simply admitted his fault and taken care of the OP, avoiding litigtation.

    This is what business insurance, garage keeper's legal liability insurance are meant to provide. It would have avoided legal costs and bad feelings for everyone. The insurers will add their subrogation costs to their rate formula, next time they file with the government for an increase in insurance rates, in Ontario, MA or in any other similar jurisdiction.
     
  21. VIZSLA

    VIZSLA Four Time F1 World Champ
    Owner

    Jan 11, 2008
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    David
    How much latitude does the dealer have in choosing which insurance Co. the initial claim is made to?
    It may be a matter of state law that the car owner's policy is referenced first and that they then go after the shop's insurer.
     
  22. The Maxx Guy

    The Maxx Guy Rookie

    Jul 8, 2011
    14
    Scottsdale, AZ
    I think this thread is really great. Thanks to OP for starting it. I actually am learning more about insurance and how it works. So many high functioning and intelligent people on this thread.

    I have a question for the original poster:

    Do you see how much energy everyone has about your issue here? I think you can probably count on all of us to help you with voicing your concerns. Maybe you could use us to channel that energy to help achieve a favorable result?

    Cheers :)
     
  23. James_Woods

    James_Woods F1 World Champ

    May 17, 2006
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    James K. Woods
    So could somebody tell me again why we are protecting this dealer's identity?
     
  24. Noblesse Oblige

    Noblesse Oblige F1 Veteran

    Nov 7, 2011
    6,114
    Three Places
    Thanks Lorenzo... you sent me scurrying to catch up on my Dickens. :)
     
  25. Alcav5

    Alcav5 F1 Rookie
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    Al
    ^ This! +1

    Now I am subscribed
     

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