Drivers taking cash settlements from insurance companies warned to read the fine print
A number of Calgary drivers dealing with hail damages from this summer’s violent storms are being tempted by quick cash settlements from their insurance companies.
However, those choosing the cash payout should be cautious; the agreement comes with risk.
Owners whose vehicles were damaged in the July 12th hail storm can ask for money from their insurance company as long as the vehicle was not written off. They can then use the cash to arrange the repairs themselves, or just keep the money and continue to drive the damaged vehicle. The fine print however, is the arrangement will modify the existing insurance policy.
It’s a dilemma Gordon Sick is currently facing with his 2005 Acura. Gordon had parked his car at the University of Calgary when the storm hit in mi-July. The cost for repairs is almost equivalent to the value of the vehicle. He is tempted to take the cash settlement and keep his car, but he has been warned his insurance coverage will be changed.
“They’ll either give me a cash settlement of about $9,000 and I keep the car or they give me the market value, what their claimed market value is, minus my deductible of $250 and I lose the car.”
Those who decide to take the cash payout and continue to drive the damaged vehicle will no longer be covered in case of any future collisions or damages. In the case of another collision, the insurance company will deduct the payout amount from new the claim, meaning if the driver is involved in an accident, they could be on the hook for much of the damages.
“You can drive around with the car with the hail damage but the insurance will again put on a 13-H’ and they will probably in all likelihood remove section C, no collision no hail,” says Ross Bucsis from Palliser Insurance.
Those who use the cash payout to have the hail damages repaired themselves will be required to prove it to their insurance companies before their policies are changed back.