Lengthy wait times for auto repairs over the past three years, sparked by supply chain problems and other factors, have cost insurers a bundle, especially if clients have generous allocations for rental cars.

Over the past few months, emerging evidence suggests those extended rental times have led to secondary claims being reported by adjusters – and the claims are coming from an unexpected source.

“Because auto claims are taking longer [to resolve] due to parts delays, labour shortages and more, policyholders can end up having a rental car for so long that there’s a loss with the rental vehicle as well,” Jesica Ryzynski, a claims specialist with Mitch Insurance tells CU.

Those secondary claims run the gamut from “collisions, hit-and-runs in parking lots, cracked windshields…we [even] had one client whose rental car was stolen from in front of their home.” The trend’s too young to have produced hard data, but Ryzynski’s heard similar anecdotes from other adjusters.

 

Client confusion

Clients find these claims confusing, she adds, particularly if the first accident claim is not at fault; and the second is an at-fault claim while driving the rental.

“They had the accident with their vehicle where they weren’t at fault, so the insurance company is paying for the rental and the optional damage coverage for that rental. Off they go, tickety-boo, and then they have an at-fault loss with the rental and these are the ones I hear about the most,” Ryzynski says.

“I take the opportunity when I’m talking to adjusters…to get various perspectives on things and I definitely noticed in the past six months the losses with the rental vehicles [are] becoming more common. And it is because they’re in these rentals for so long.”

Accidents leading to secondary claims often elicit emotional responses from clients who complain that if they hadn’t been out of their own vehicles so long, those secondary crashes wouldn’t have taken place.

“Of course, we don’t know if that’s true, but I think…the stress of being in the rental vehicle they’re not as familiar with leads them to at least believe that these accidents wouldn’t have happened if they had had their own car back,” says Ryzynski.

“I have no proof to back this up but [it seems] from a psychological perspective, these are people who’ve just been in an accident that they weren’t at fault for, so probably very much caught off guard by a scenario that they didn’t see coming….But they’re already in a kind of heightened state, maybe, of stress while driving an unfamiliar car.”

 

Parts problems

Ryzynski adds the parts needed for many of these repairs are items that are normally in stock. That’s adding stress to the wait times for some clients.

“It’s amazing the things that are no longer readily available. Last summer, I had somebody call me in tears. This poor man had been out of his Honda Civic for six months, and it was a windshield washer motor [which controls the] windshield washer fluid,” Ryzynski says. “He ended up coming to me and begging and pleading, ‘Can they just do a total loss? I can’t handle driving this rental anymore.’

“I think the combination of having that over his head, and then also driving this car that didn’t belong to him, [was the last straw]. The [insurance] company did agree to do it. But, again, it’s dependent on the company and the situation. They did agree to do it for him because he literally was falling apart from the stress of waiting for this windshield washer.”

 

Feature image courtesy of iStock.com/megaflopp


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