Reasonable and Necessary Clauses in your auto policy are designed to protect the insurance company.

They will only pay the average rate of a service in your market! Why?

Insurance companies will use Reasonable and Necessary clauses against you every chance they get. I like to call them clause the “I will nickel and dime you clauses.”

It allows insurance companies to collect data for products and services (car rentals, medical services, tow trucks, car repairs, car parts, etc.) and average the rates in your local market (and pay that).

This means that if the average chiropractic visit is $20, and your doctor charges $22. Then you will be responsible for the different because it is an “unreasonable charge”, and trust me, your insurance adjuster will deduct $2 and will spend three hours fighting you about it.

This clause gives your insurance company incredible power over you. They have the data and all the information collected by hundreds of claims.

They get to tell you what is reasonable and necessary. You will not have access to this data unless you ask; and even then, you will have to call and verify each piece of information to make sure is right (this can take months).

That does not mean that you should ask! They must provide the information. If they cannot provide it, then either they pay or you would have evidence of bad faith.

If you have problems having an insurance company discussing what is reasonable and necessary, contact the insurance commissioner, or the department of insurance, in your state. They can force them to release the information necessary.

Reasonable and Necessary Clauses will keep you from determining what is fair since you do not have access to the actual data. You can enforce you Right of Appraisal in certain occasions. Read more on this subject.

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