Lawsuit Investigation: Insurance Stopped Paying for Your Rental Car After a Total Loss?

Attorneys working with ClassAction.org are looking to hear from people whose vehicles were deemed a total loss and who received a letter or email from their insurance company or adjuster stating that a rental car would only be covered for a limited number of days.

The attorneys have reason to believe that some insurance companies may not be providing the full amount of rental car coverage stated in their policies in cases where a covered vehicle is declared a total loss – i.e., the insurance company determined that the cost of repairing damage to the vehicle would exceed its total value. Though most insurance policies provide a standard 30 days of coverage for rental car expenses, some policyholders have gotten letters or emails stating that their insurance only covers five or seven days following a total loss – which may violate the terms of their insurance policies.

It’s now being investigated whether class action lawsuits can be filed against these insurance companies to help consumers get back any money they should have been paid for rental car expenses.

How Long Will Insurance Pay for a Rental Car After a Total Loss?

Drivers may choose to include rental car coverage in their policies to be utilized in the event of a total loss car accident. This coverage – sometimes called rental reimbursement or transportation expense – is generally intended to provide alternative transportation for a standard period of 30 days while policyholders find a replacement vehicle. This timeframe can only be reduced if the insurer first determines a shorter amount of time is reasonable for the policyholder to obtain a replacement vehicle.

However, attorneys working with ClassAction.org have reason to believe that many insurance companies cut off policyholders’ rental car coverage much earlier than their policies’ 30-day limit without conducting any required analysis to determine how much time is reasonably needed to replace each totaled vehicle. In fact, policyholders sometimes receive form letters and emails stating that they have only five to seven days of rental car coverage after their vehicle has been deemed a total loss. It’s believed that the insurance companies uniformly set these shorter timeframes without ever looking into whether they are “reasonable,” which may violate the terms of their insurance policies.

Which Insurance Companies Are Under Investigation?

The attorneys are looking into all automobile insurance companies, including (but not limited to) American Family, Allstate, Goodville, The Hartford, Liberty Mutual, Nationwide, and Travelers.

How Could a Lawsuit Help?

A class action lawsuit could potentially help consumers get back any money they should have received from their insurance company for rental car expenses. It could also possibly force insurers to provide the full amount of transportation expense coverage in their policies for future claims.

In fact, several lawsuits filed against insurance companies over their alleged failure to provide the full amount of rental car coverage have already resulted in settlements, with the affected consumers receiving money back for the amount of time that they were denied reimbursement of transportation expenses.

What You Can Do

After you get in touch, an attorney or legal representative may reach out to you directly to ask you some questions and explain how you may be able to help the investigation. It costs nothing to speak with someone, and you’re not obligated to take legal action if you don’t want to.

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