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Is it an insurance claim or an unlucky break?


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Question: My wife hit a spare tire that fell off some car in front of us (they didn’t stop).  Soon afterward, our car stopped running and while we couldn’t find any damage to our car, there was fluid leaking from the transfer case.  My auto insurer says they won’t cover this due to it being internal mechanical issue.  I have full coverage. Shouldn’t it cover this situation? 

Answer:  Damage to your vehicle from colliding with a road hazard, such as a tire, would be covered under your collision policy. However, your insurer would need to find evidence of the physical damage that the tire did damage to your vehicle.

Unfortunately, it appears your claims adjuster hasn’t found any damage to your vehicle from this incident that would have caused the issue with your transfer case, instead finding the breakdown coincidental. Auto insurance pays for covered perils, not mechanical breakdown, so even with full coverage your car insurance policy won’t cover this situation.

Since you believe the issue with the transfer case is a direct result of hitting the tire, I’d recommend that you take your vehicle to a mechanic and get his opinion.

If the mechanic finds proof that your issue could have resulted from hitting a tire, and not wear and tear, then get that in writing.  You can then take this information to your insurance company to review and again determine if you have a collision claim.

If your insurance company continues to disagree, you can contact your state’s insurance regulator to see what your options are to pursue your insurer to pay the claim, such as mediation.

If instead the mechanic finds that the mechanical issue your vehicle is experiencing isn’t consistent with damage that could be done from hitting a tire, then I don’t see how you could continue to press your insurance company to accept a claim for it.

Even if the insurance company sees the damage and relents, allowing the claim, do a little math before you file. If you make a claim, you would owe your chosen deductible amount, and especially if you have made other claims,  it's possible that your rates could rise as a result of another one.

Get a repair estimate and subtract your deductible. Call your insurance company and ask them if the claim will make your rates go up at the next renewal period.

In other words, you might not want to pick a fight over a claim that ultimately may cover only a small portion of your repair cost and cause your insurance company to see you as a bigger risk.

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