There is a lot more heat than light here. I spent my professional working career in a major insurance company and allow me to shed some light.
1. When you took out your insurance policy you agreed to a specific deductible on the collision coverage. Higher deductibles equate to lower premiums and you accepted the first level of loss. Who is at fault is not an issue. Frustrating, but that is what you agreed to (see item 6). There is no such thing as full coverage on collision, there is always a deductible.
2. Your insurance carrier, by contract, agrees to pay to "repair or replace with like kind and quality" (or similar wording), less any deductible, for damage to your vehicle (except what is covered under your comprehensive coverage or specifically excluded). Collision is the coverage that applies in this incident.
3. Once you file a claim the insurance policy provisions are activated. You have the right to withdraw the claim but if you do not, both you and the company are bound by the terms.
4. The $1,700 is the estimated cost to repair. You can do it yourself or you can have a shop do it, or a mixture of both. Most shops will do the work for the estimated amount, no questions asked. If there is hidden damage the shop will contact the insurance adjuster, they will work it out and you probably won't even be aware. If you do the work and find hidden damage, you do the calling.
5. When the bike is done at a shop, you take the $1,200 and your $500 to the shop, inspect the bike, and if OK, bring it home. There should be a warranty from the shop and the insurer, neither wants to be responsible for a defective repair.
6. Now since the other party is at fault and is identified, your insurer may, at their discretion, subrogate the at-fault party. Both the driver and his company are advised of the demand to pay the damages. In this case, the $1,700. If the at-fault party wants to pay he will either do so or sign a legally binding agreement to do so. You may not be aware this is going on, or the adjuster will keep you in the loop. Its their decision, not yours.
7. The first money back to your insurer is the deductible amount, which is sent to you. If subrogation is successful you get the $500 back before your insurer gets their $1,200.
8. Keep this one point in mind: Your insurance contract and the rules/rates in effect at the time of the loss determine how the claim is handled. If the at-fault party or his insurer calls you, refer them to your adjuster. If there are repeated calls, play the broken record. You are out of the loop when you filed the claim and the adjuster is the one handling. You purchased their expertise when you insured with them.
8. If you feel you need an attorney, the cost is yours. The claim is only worth so much and an attorney will not gain you anything over and above the cost to repair the bike. If he says he can, its insurance fraud.
9. As for the loan, it is not part of this claim as it is between you and the lienholder. You still owe on the loan. If the bike is totaled, the loss settlement check will be made out to you and to the lienholder. You take the check to them, both endorse, and the check applied to the loan. If the check is for more than the loan, you get the balance. If for less, you make up the difference or keep up the payments. It doesn't sound like there is a total loss situation here, and the lienholder may not even be on the check you received.
10. For the record, coverage for the items damaged in the loss are suspended until the bike is repaired. Insurers don't like to pay twice for the same loss. When the bike is repaired, give your agent a call and advise him, or send a photo, or stop by.
11. You must have a good rapport with your agent. Getting a check up front was unusual in my area as we wanted to be sure the repairs were made before we paid.
Hope this helps.
