Can a insurance company cancel my rental car before paying me after an accident because they totaled the car?

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Can a insurance company cancel my rental car before paying me after an accident because they totaled the car?

A lady rear-ended my car (she is 100% at fault for the accident). Finally, her insurer called me yesterday saying they’re totaling the car (without telling me how much they are going to pay; it seems another agent needs to value the car, which has not happened yet) and I cannot keep the rental after tomorrow. The agent is trying to convince me that it does not matter whether they paid me for my losses or we settled down. It is a TX law they do not have any responsibility once they let me know the decision? How could they cancel the rental before paying me (or telling the amount they will pay)?

Asked on June 30, 2011 under Accident Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

There is no general answer in this regard. An insurance policy is a contract; what the insurer has to pay, when, and how is determined by the terms of the policy. So, for example, there is no law saying an insurer has to pay for a rental car at all; whether they do, and under what conditions, depends on what it says in your policy. One could imagine, for example, that the policy states that you will be provided a rental car *while your car is being repaired*; if that was the case, it could well be that when the car is declared totaled, it is no longer going to be repaired--and hence the obligation to provide a rental car is extinguished. You need to look to the specific language of the policy to understand your rights; an attorney can help you do this, and take action against the insurer if warranted.


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