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Rental Car Collections - won't go away, insurance won't help, don't know what to do!


vintage14
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Hi

I'm very new at this - I've never dealt with collections before. In November 2005 I was in a car accident in NJ where I hit someone in a rental car. The accident was my fault - I was fully insured by Allstate and Allstate paid damage claims for accident.

In fall of 2006, I began receiving collections letters from a claims management company for the rental car company claiming that two claims for loss of use and diminished value had not been paid by Allstate and that if they were not paid soon, I would be responsible. I contacted Allstate who told me that they would deal with this, that those claims had not been paid because that were not properly substantiated and the company was just trying to get more money. A month or so later, I got a notice that Allstate had not paid and I was responsible and that if I did not pay the claim would be referred to a collection agency. I told them to sue me - if they sued me then Allstate would have to defend me and pay any damages. They refuse to sue and only will go through collections & affect my credit. I sent several letters to the claims agency and Allstate disputing the debt and asking for validation. Allstate wrote a letter to the claims agency asseting that they should stop contacting me and any claims have to go through them because I was fully insured. The claims agency sent a verification which was basically a form written up by their company, dated this past spring when I asked for the validation, just outlining the amounts they claimed due - no real proof. In fact, the amounts their claiming have changed with each demand letter they send - sometimes its 30 days lost use, sometimes 15, sometimes its $1,700 in diminished value, sometimes it $1,900. I responded that they should not deal with me and should only deal with Allstate. I haven't heard anything since May, my credit report is clean, and I thought this went away.

I got a letter from a CA yesterday trying to collect the debt. I don't know what to do at this point. Can they put this on my credit report if they have the "verification" that the other company sent me? What about the letter from Allstate that the debt is theirs, not mine? Can this help? I'm getting married next year, want to buy a house, etc., and really don't want this on my credit report, but I refuse to pay $2,000 for damages that aren't valid. I appreciate any help, I'm so lost in this process!

Thanks in advance!

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Thanks for the response! I looked at the abbreviations thread and see that ITS means intent to sue. But who should I intent to sue? The collections agency? The claims agency? The rental-car company? Allstate?

Could I sue the original creditor in small claims court for a declaratory judgment on how much debt is due? Will Allstate then be required to pay that debt if the creditor succeeds? I know they are required to cover me, but does the fact that I initiate the declaratory judgment affect anything? If they don't, can the judgment that I owe nothing be a repellant against any future collections?

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Did the rental car company ever send you a bill before they turned it over to collections? If they didn't and turned it over to collections before giving you reasonable opportunity to pay it, you may have a case. Unless Allstates insurance payout was more than your policy limits, then Allstate should be liable for any legitimate charges and should be clearing this up for you. Keep hammering on Allstate until they do something for you. Insurance companies can be just as bad as anybody when it comes to payouts. I am a newbie here as well and no expert on legal matters, just my opinion. Diminshed value is a common ploy in any auto insurance claim, if the vehicle is fixed to factory specs there is no loss of value except what may show up on a car fax report, make them prove it.

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You need to lean on Allstate to handle this. Your in good hands right? Get your agent on the phone and tell him/her that this MUST be handled, they represent you. Make them do their job. If your policy covers this sort of thing they must handle it. Don't spend your money on a lawyer, make Allstate do it.

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