Insurance company delay in liability decision

One of my clients was recently in a car accident, and she asked me to assist her with her personal injury claim.  We called the responsible party's insurance company to bring a claim on her behalf.  Even though their client was clearly at fault (the police report was in my client's favor), they said they needed time to "investigate" the matter.  That's part of the stall tactic - saying they need time to "investigate" when all signs show their client is at fault.  

While my client was waiting for them to "investigate" and make the obvious decision, she needed to rent a car.  She is a single mom taking care of two young kids.  The kids need to go to school, she needs to get to work, so naturally, she needed to rent a car.  Since she did not have rental insurance available on her insurance policy, she chose to pay out of her pocket for the rental and eventually we'd ask for reimbursement.  Sounds reasonable so far.

She rented a very modest car...a Hyundai Accent, one of the smallest cars you can rent. She didn't rent a Cadillac or Lexus.  She paid for 30 days which turned in to 45 days because the body shop found more damage than they expected.  Then the body shop had to order more parts which delayed the process another 30 days.  Altogether, she ended up renting a car for about 80 days, through no fault of her own.  

It took their insurance company about 30 days to decide their insured was at fault.  When we presented them with the bill for the rental, they refused to pay for any rental prior to them accepting fault for the accident!  So here is the tactic - by delaying their decision to accept fault, their position is that they don't owe anything for the first 30 days because they hadn't accepted fault yet.  They argued my client shouldn't have rented a car until they accepted fault.  Really?  This is the infinite wisdom I have to deal with on a daily basis.  The insurance company is refusing to pay for reasonable consequential damages while they were deciding if they were at fault!  As for the rest of the rental bill, they only wanted to pay for 30 days because anything beyond that was "unreasonable."  I explained the parts delay but they wouldn't budge.  I guess they've never seen anyone rent a car beyond 30 days?

I tried to explain to the insurance adjuster that their policy was silly because it encourages all insurance companies to delay their liability decisions, and then conveniently argue they are not responsible for damages incurred during the delay!  I asked if my client had been hospitalized due to the accident, were they going to deny payment for that as well since the hospitalization occurred prior to their decision?  I further reasoned that if a jury found their client at fault, they would certainly hold him responsible for all reasonable damages that flowed from the accident. 

As I type this posting, this matter remains unresolved.  I called my client's insurance company, and they agreed such a position was ridiculous.  My client's adjuster is appealing to the other adjuster.  The point of this posting is that even when you think everything is obvious and the law is on your side, a myopic insurance company (and its tactics disguised as "internal policies") can derail an entire case.  It's a shame.