A recent breach-of-contract lawsuit filed against a nationally acclaimed insurance company sheds light on an emerging issue: failure to adequately compensate policy holders for necessary repairs to luxury vehicles following collisions. It’s more common than you think.
Last year, a lawsuit was filed in Florida involving a plaintiff and her damaged Porsche. After a collision, she took her vehicle to a local dealership and was referred to a certified body shop that would be able to perform repairs in compliance with both the vehicle's warranty and manufacturer's specifications. The repair facility specialized in high-end vehicle reconstruction and offered competitive rates reflecting the skill required for these intricate repairs.
The estimate was less than $10,000, well below the $100,000 policy limit of the vehicle. It aligned with the terms of her policy, which required restoring the Porsche to its pre-collision condition with repairs performed at a certified location. This clause wasn't just about aesthetics; it ensured the safety of the vehicle and its occupants, as well as preserving the factory warranty.
The insurer rejected the estimate, opting to calculate their payout based on alternative labor hourly rates, including those from non-certified repair shops. As a result, their maximum settlement amount was $2,000 short of the certified assessment, leaving the plaintiff to pay the difference out-of-pocket in addition to her deductible.
It's not all about the financial impact. When repairs are not conducted to the highest standards, there can be serious safety concerns. Luxury, exotic, and performance vehicles come with advanced safety features and intricate engineering that require specialized knowledge and skills to repair properly. Cutting corners on repairs not only compromises the integrity of the vehicle but also puts lives at risk.
Unfortunately, this situation is not as rare as it might seem. Intentionally or not, there have been instances of carriers applying mass market standards to high-end vehicle claims. Luxury brands potentially impacted include BMW, Land Rover, Maserati, Mercedes-Benz, and Bentley, to name a few.
Still undecided, this lawsuit serves as a wake-up call to individuals who could benefit from sophisticated consultancy when selecting terms and conditions for their insurance coverage, particularly when the stakes are high. By selecting a risk management advisor dedicated to protecting affluent lifestyles, you benefit from their history of safeguarding high-end assets.
You’ll also want to select a brokerage firm that offers a claims team who will advocate on your behalf and can effectively negotiate with carriers to resolve the situation. Unlike the typical consumer, a claims professional will be able to successfully articulate your position and often has years of experience reversing initial insurer decisions.
Lockton offers the best of both worlds. With a white glove approach to client service, we tailor insurance strategies to your personality, risk tolerance, and unique asset portfolio. In the unfortunate event of a loss, we will act on your behalf to negotiate with carriers, coordinate rentals, and handle other aspects of your claim. We work tirelessly to expedite your recovery, minimizing disruptions to both your life and your financial affairs.
For more information about Lockton, visit our website (opens a new window) today!
The information provided in this article is for educational purposes only and should not be considered professional advice. Please consult with a Lockton representative for information regarding specific insurance products and services.