Accident Insurance Question
Reader’s Question:
I had a close friend who got into a car accident. He tried to get his insurance company to pay back the fender-bender he got, but they said some crap about ‘not reaching the franchise limit.’ What the hell does franchising have to do with accident insurance!? We’re not opening some food-chain or anything!
That got both of us pissed off, and we’re thinking of hiring a lawyer to sue their buns off. I mean, with you guys being all knowledgeable and stuff about car insurance policies, what do you think?
Daniel
Tampa, FL
That may not be the best thing to do. You may be spending a lot more than you really need to if you decide to get a lawyer, and you’re most likely to lose the case anyway. If you’re reacting this violently, then perhaps the insurance company didn’t explain the terms of your contract properly.
A franchise is a threshold of costs that have to be exceeded for the insurance company to pay for the cost of the accident. It’s sort of like a cost-limit that you’ve got to reach before the insurance companies pay up for accident insurance. For example: if your franchise limit is $100, and the estimated fender-bender that your friend had cost $99.99, then the company won’t pay for the damages.
Now if you think the estimate for the damage your car sustained exceeds the $100 franchise, then you can get couple of other separate opinions from other car-repair garages. The more estimates you get that exceed $100, the better your chances of convincing the insurance company to pay up. If they still refuse to reimburse the damage even after three or four estimates that all say the damage exceeds $100, then you can call your lawyer.