Since the early ‘90s, the auto collision repair industry has become infiltrated by the insurance companies seeking to reduce payouts so they can enjoy huge profits. Due to the infiltration, repair shop profits are almost non-existent. This has created a marketplace where repair shops have to hold vehicle owners accountable for the cost of a proper repair and allow the vehicle owner to seek reimbursement from the insurance company. Unfortunately, most repair shops have resorted to sub-standard repairs to make their insurance partners happy most often resulting in poor and unsafe vehicle repairs. These types shops are conspiring with insurance companies to defraud you, the consumer. It has divided the industry and created two types of repair shops.
A Little Background
Types of Collision Repair Shops
“DRP” or “Contract Shops” , often referred to as “Preferred” – These shops recognize the insurance company as their customer since they rely on their insurance partners for job referrals, rather than earning a good reputation for themselves. If given the choice to decide between what is right for the vehicle repair or what the insurance company has told them, the shop WILL choose the latter!
“NON-Contract Shop”, often referred to as ”Non-Preferred” – These recognize the vehicle owner as their customer and will repair your vehicle by their own professional repair standards in a manner consistent with the manufacturer guidelines and accepted industry practices. They favor the vehicle owner rather than being in the back pocket of the insurance companies.
HAD AN ACCIDENT?
What if my insurance company’s estimate is lower than my shop’s estimate?
KEEP in mind that your vehicle is damaged and it is impossible to write a complete, accurate estimate prior to disassembly. Insurance companies and repair shops alike always write estimates based on visible damages only, so more often than not, the price will be adjusted upwards after a complete disassembly and blueprinting has been completed. Disassembly allows for a thorough inspection, so don’t be alarmed by a low estimate by the collision shop or insurance company. Remember that the insurance company is simply preparing a reserve of loss and is not preparing an estimate to repair the vehicle and most appraisers are not repair professionals. Some insurance companies may even hire third-party appraisers. These appraisers are hired and paid by the insurance company to prepare estimates according to the insurance company guidelines. They do not work for you so they do not have your best interest in mind. In addition, third party appraisers or audit companies are used as a scapegoat as to the reason the insurance company may deny payment.
Whose responsibility is it to pay for the damages to my vehicle?
IT is your vehicle, it is your choice and it is also your responsibility to pay for the damages. If you are insured, it is the responsibility of your insurance company to reimburse you for those damages as agreed upon in your contract with them.
IF you are a claimant (third-party), then you do not have a contract with the at-fault driver’s insurance company. The at-fault driver is ultimately financially responsible; however, it is still your responsibility to obtain payment for the damage to your vehicle from either the at-fault party or their insurance company. You may also be entitled to diminished value.
My insurance company said I might have to pay out of pocket if I select the shop of my choice!
CONSULT with your chosen repair shop! Many shops offer repair options or can assist you with remedies. Don’t let the insurance company scare you into getting a poor unsafe repair!
Do I have to use aftermarket, reconditioned or used parts?
ABSOLUTELY NOT. However, you may have agreed to this in your contract with your insurance company, and you may be responsible for the additional cost if you are not willing to accept those parts, or if your repair shop will not use them. If you are third party, then you do not have such a contract, and it is up to you to negotiate this with the at-fault party or their insurance company. Keep in mind that aftermarket or reconditioned parts may void your manufacturers warranty, compromise your safety, and further diminish the value of your vehicle.
CIRCLE OF PROPAGANDA ™
ALL of these items are simply propaganda to coerce or intimidate YOU into doing what the insurance company wants you to do. If you are hearing this, you may be the victim of insurance abuse. These tactics are called steering and may be unlawful.
IF you are hearing these things about the shop YOU choose, that is a good sign that the shop works for you and not the insurance company! You are much more likely to obtain a complete and safe repair from this type of repair facility. Keep in mind that you should avoid any shop that claims to handle the claim for you. Insurance companies hire and train skilled negotiators to get their way. You do NOT want a repair shop that has signed agreements with the insurance companies or agrees to handle your claim. Keep in mind that a quality repair cannot be had at a budget price.
INSURANCE COMPANIES often use the delay, defend, and deny method betting on the fact that vehicle owners are too busy or just too ethical to pursue full payment. Their hopes are that they can force a repair shop to bend and compromise the repair or the vehicle owner will just give up! If YOU do not get paid in full or YOU get a compromised repair, then YOU got just what the insurance company wanted YOU to get! A repair shop cannot resolve a claim for YOU!
IF YOU want a complete and safe repair, YOU should be involved in every aspect of the repair process! Don’t allow your repair shop to settle the claim for YOU. YOU will come out on the short end of the stick, EVERYTIME. This is a great time to search the Internet for reviews and complaints about a specific insurance companies claims handling practices.
IF THE CLAIM IS NOT PAID IN FULL (in no particular order)
THIS IS YOUR RESPONSIBILTY!
You may consider filing a complaint with your state Attorney General’s office.
Often times these complaints may be forwarded to the department of insurance consumer affairs division if your state has one but it is important that the attorney general know that a problem exist.
You may also file a complaint with your state’s Department of Insurance.
Unfortunately, governors in many states appoint the director of the department of insurance, and more times than not, the DOI sides with the insurance company since many of the employees were formally or possibly still employed in the insurance industry. Even so, they can often aid in resolving claims, if they choose too.
If you are the insured (first party), then you can call your insurance agent and demand payment or ask for their help in resolving the claim.
You may file a complaint with the Better Business Bureau.
You may contact the at-fault driver and demand payment, in third-party claims.
You may try using social media such as facebook and twitter to get the insurance companies attention.
Lets face it, insurance companies spend billions in advertising and their betting that you wont use this tool!
You may file a claim in small claims court, if the amount is below the threshold.
Currently, this often works real well in many states across the country. An insurance estimate simply does NOT stand up in court against an itemized final repair invoice from a professional repair shop. Insurance companies are betting that your either to ethical, too busy or scared to use this tool!
You may consult with a licensed attorney. Be sure to hire an attorney with auto collision experience.
Sometimes even a demand letter from an attorney will do the trick!
The phrase “the squeaky wheel gets the grease” certainly applies in auto claims. Often times, you may be paid quicker or fully by simply staying in contact with the insurance company and demanding payment in full, while being professional.
Keep in mind that insurance claims adjusters are simply doing their job and have no real
authority to do the right thing so getting mad will only serve to punish you!
Most of these tactics are relatively easy but will require your time and effort to be fully compensated.
While this process may seem difficult or overwhelming, its much easier than trying to remedy a bad repair.