Geico Paid out a claim to lender for damage was not done by me Nationwide Nationwide
Dance the little lizard and they will come.....
The problem I have with Geico is how they handle their claims. Especially when I didn't make a claim.
A little background. I owned a used Mustang. It wasn't perfect and I bought it despite the little dings, dents and peeling tint, but I loved my car. I took good care of it, kept it clean and in good running order.
For a long time, I was lucky durning the recession. I kept my job until 2011, when finally it caught up to me and I became unemployed. Still I did my best to keep up with my bills. Unfortunately, in early 2012, I started falling behind in my car payment. To make a long story short, my car was repossessed that July.
I cancelled my insurance policy immediately. However almost two months later, I get a call from GEICO asking questions about the car. Was it in an accident, was there any damage to it, etc. I had not been in an accident, and there was no damages to it that wasn't already there. I was later notified that GEICO paid out the claim to them.
I was reassured by the claim adjuster that it would not go down as an accident and that other insurance agencies did not penalize for this. Despite being angry at them paying out on something that had nothing to do with me, I let it go. Its been two years since this happened, and every time I shop for insurance I have to fight to not get charged extra for that "non-accident claim".
This is unfair. It is silly that a USED vehicle is considered new for all intents and purposes when involved in a repossession, and that the lender can hold the driver responsible for all damages regardless even if damages were done before the car was purchased (ie. not durning insured time frame).
Truth is, if I got into an accident my policy dates are very relevant to them. However if it is a lender, they dont care because they would rather risk a lawsuit by the policy holder (which is less likely), than butting heads with a corporation that can easily afford legal action.
It isn't just GEICOs fault, though they refused to do anything except take the lenders word as law. Instead, the entire auto insurance industry for not using provable facts as consideration. In essence, their statements are slanderous me.
The claim adjuster couldn't even defend his actions claiming that all of the facts used were sent by the lender, which consisted only of a list of damages and cost. Of course, they would not allow me access to any of this information.
Forcing insurance on everyone only makes insurance companies realize that we don't really have a choice, and that collude through systems like LexisNexis (which doesn't carry the same protections as a standard credit report) to ensure that they always have a excuse to charge you more. GEICO has only proven this with their actions.
2 Updates & Rebuttals
Knight
Las Vegas,Nevada,
I see your point but....
#3Author of original report
Sat, October 04, 2014
The challenge here is that there was no accident. There was no extraneous damages during the time I had the car. That crap about financial companies 'owning' the car is another BS story for another time.
I have just the one claim on my record as well which was the repo. I didn't have a problem with it until GEICO's competitors charged me a higher rate. It is not a fair system to charge me more for issues that have nothing to do with my driving ability or how accident prone I am. If they want to pay, so be it. I am sure they have many bright minds to figure out projected income vs payouts without having to penalize me for it.
Crain1983
Virginia,Proof
#3UPDATE EX-employee responds
Sat, October 04, 2014
The lender is the entity that "owns" the vehicle, and when a lender reposseses a vehicle, they are basically no longer loaning the vehicle to the individual that had financed the vehicle - in other words, the vehicle was never "owned" by the person financing said vehicle. With that being said, if the lender, or "owner", files a claim with the insurance company that most recently insured the vehicle, the insurance company handles the claim accordingly. Many moons ago, insurance companies could deny claims left and right-and they did. The consumer suffered-you, me, etc. In order to protect the consumer, regulatory commissions were born on the Federal and State level, making it more difficult for insurance companies to deny claims that were legitimate and unfortunatley those that are fraudulent.
Nowadays, the burden of proof required by an insurance company to deny a claim is crazy-flagrant, outright fraud is often tolerated because it is just cheaper to pay the claim than it is to defend a denial in court. In the case of the lender, the insurance company again has to prove that the damages to the vehicle did NOT occur while in the possession of the insured. Think about it-if you loaned your vehicle to a friend for a year, and had the vehicle insured with, let's say Acme-and then filed a claim with Acme when your friend returned the vehicle with a missing bumper-the insurance company would likely pay the claim, even if the damages had occurred after the policy expired (that is assuming you lie and the damages occurred a month later after you had switched to (Fake insurance company).
To deny the claim, Acme would have to prove that you stand to gain financially, materially misrepresented facts, and knew you were committing fraud. Trust me, it's not easy. If the lender can present a decent case, showing that the vehicle was in condition A at the time of purchase, and returned in condition B, the insurance company is obligated to pay the claim. What would be a decent case? Well, like you said, it's their word versus yours. Your claim would be handled just the same. Dates? Of course they care...but if they can't PROVE that the damages occurred outside of your policy effective dates, they can't deny the claim.
It's really not the insurance industry's fault....well, if you look at the insurance industries' trackrecord prior to legitimate consumer protections...you could say they forced this upon themselves.....but that is not an excuse for frivilous, illegitimate lawsuits that plague the industry. The consumer can generally always be blamed. If you file frequent claims, regardless of whether or not the incident was your fault, you are a greater risk that an insurer will pay out a claim.
I have been accident free since 2004, ticket free since 2004, and have filed one parked/unoccupied non-fault uninsured motorist property damage claim (some drunk hit my car while it was parked in front of a friend's house and didn't bother to stick around) and maybe two windshield claims (cracks) in that time. I carry 500, 000 / 1,000,000 Bodily injury limits, 250, ooo property damage limit, and a $100 collision deductible on two vehicles, and no deductible for comprehensive. I have 1500 in rental limits, 100 a week loss of income, and 10,000 medical, as well as Emergency Roadside Assistance. I live in the most populated city in virginia. I pay rougly 1200 a year. If I were to start filing claims, regardless of their legitimacy and whether or not i am at fault ( a good number of accidents can be prevented by driving defensivley-I've avoided a lot by watching what others are doing), I would expect my rate to increase. They rate I currently have is based on my previous claims/driving history, not what it is after the claims start coming.