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Why Buy Auto Physical Damage Coverage?

Author: Bill Wilson 
 
Question
 
“My client's vehicle was hit by another motorist. The other motorist's vehicle failed to stop, causing the collision. The investigation revealed that the accident was not caused by any negligence of their driver, but was due a ruptured brake line, causing brake failure. Because of these circumstances, they are denying liability. This was not a brand new car, it was an older van that the customer did not insure for physical damage. Maintenance will probably be an issue. What do you think?”  
 
Answer
 
Just because there was no "driver error" doesn't mean the other party is without liability. However, it's possible that the other party's insurer won't respond unless some sort of legal action is taken. So, it sounds like the insured has two options: 
    1. See if an attorney will take his case for a claim against the other party and/or the auto manufacturer. Given that what's on the line is largely the value of an older van that the insured didn't even think was worth insuring for physical damage, I doubt that there's an attorney that would take this case. The insured might be able to convince the attorney to send a demand letter for a fee or he might make a claim in small claims court.
       
    2. Get a new car. Since the insured didn't feel the vehicle was worth enough to insure for physical damage, s/he must have the finances to be able to replace it if damaged and there is no one else legally responsible for it. So it is likely time to go car shopping. 
All too often, to save money, insureds won't buy physical damage coverage because their vehicle is "old" or "not worth much" or "I'm a careful driver." Then something like this happens and they realize they can't replace this vehicle for less than several thousand dollars. The insured has learned a good lesson and you can use it to educate others who decline physical damage coverage...or refuse to accept them as customers.
 
Note: Another possibility, depending on the state and what the insured purchases is UM PD coverage, IF the other party’s insurer legitimately denies coverage.
 
 
Last Updated: January 29, 2016
 
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