If both parties involved in the accident have the same agent and company, is this a conflict of interest?

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If both parties involved in the accident have the same agent and company, is this a conflict of interest?

Our car was purchased 6 months prior to the accident with less that 8K miles on it. My wife was at work and the car in the parking lot when another vehicle lost control hitting another vehicle, 3 pedestrians and finally shooting across the parking lot launching off a pillar landing in the driver side of our car. Now because the car has major repair of damage it can no longer be certified and damages are about 10 to 15K and the value has dropped. I believe we should be given a new vehicle to replace the damaged one and don’t think we are being treated fairly because both of us are insured with the same company.

Asked on April 28, 2017 under Accident Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

A conflict of interest is when there is an economic incentive for someone with power or authority to treat one of his/her/its clients worse than the other. It is not a conflict of interest to have the same insurer or agent: the agent has nothing to do with making the decision as to who gets how much after an accident and so the identity of the agent is irrelevant. As for the insurer, it will end up paying out for the total damages--whether driver A gets more or driver B gets more (e.g. based on their determination of whether A is more at fault, or B is more at fault, etc.) doesn't affect the total payout--so there is no conflict there--the insurer has nothing at stake in how it treats its two insured. Instead, it simply pays out as per the facts of the accident and the terms of the two driver's policies.
An insurer only has to give you a new vehicle (e.g. rather than repair, or pay out the then-current fair market value of a totalled vehicle) IF you purchased some sort of "new vehicle replacement coverage." If you did not, the insurer owes you only what the policy says it does for a claim like this, which is typically the lesser of the cost to repair or the fair market (blue book) value of the car. You are not owed additional compensation because the car cannot be certified, again, unless the policy you bought and paid for provides for such extra coverage.


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