Friday, 23 April 2010 08:51

Games Insurers Play

Written by Mike Causey

It has been said that one does not realize the value of a good insurance company until one files a claim.
Insurers that have local agents that the policyholder can meet with “face to face” generally fare better than the “internet based” insurance policies, according to numerous autobody association surveys.
When  it comes to insurance coverage for physical property damage, cheaper premiums are not always the best way to go. Remember that old adage: You get what you pay for!
As for the claims process for auto body repair, most claimants can use all the help they can get.  The truth is that most claimants are simply not familiar with the process and all the pitfalls that many insurers place in their path.
The investment in a motor vehicle is significant for most people. Making sure the value of that investment is not diminished through poor quality visible repairs is important to most vehicle owners.
While not all insurance companies are guilty of “steering” customers to certain “preferred body shops” or demanding body shops cut corners to save a dime, most insurers do just that. The goal is to squeeze every penny they can to pay out as little as possible on each claim.

Most insurance companies play a game—a game that makes sure that the cost of repairing an insured damaged vehicle is held down to the lowest level possible without incurring the wrath of the masses.
Insurers bank on one important fact. The fact that most vehicle owners won’t keep their vehicle very long. Therefore, the insurers are not too worried about using imitation crash parts or sub-standard parts.
Suppose an insurance company saves $40 or $50 on a part by demanding the body shop use the “Made in Taiwan” or “Made in China” imitation crash parts. How much does this “savings” cost the unsuspecting customer? Could it be hundreds or maybe thousands of dollars at trade-in time?
When an insurance company chooses to use the cheaper types of parts,  a “diminished value” claim (DV) is a possible consideration in many states.  A DV claim could compensate you for the “imitation crash parts” replacing your factory “original equipment” or “OEM” parts.

The art of steering
Here are a few of the word tracks used to manipulate the customer into using a specific “preferred” repair facility:
> “Oh, sorry, we can’t guarantee the repairs at [your shop] because ‘they’  are not one of our network shops and they’re not on our list;”
> “If you use them, we can’t get an adjuster out for two weeks; if you take it to our network shop we will have someone start on it right away;”
> “Claims take longer to settle if you use them;”
> “Oh no, they charge more than the prevailing rate for this area and you will have to ‘pay the difference’ in repair cost;”
> “If you use that shop you will have to pay for your rental out of pocket.”

Insurance company control of the collision repair industry has grown significantly in recent years. Many shop owners now struggle everyday to get paid fairly. They’re pressured to use aftermarket crash parts on the jobs they do get and watch insurers steer away customers right and left.
Shop owners are routinely “second-guessed” regarding their estimates. They generally feel “under the thumb” of the insurer (or insurer representative). All this daily pressure from insurers has caused many body shop owners to be resentful toward the insurance industry.
This resentment is apparent from comments on internet blogs as well as surveys conducted by industry associations and publications.
Body Shop owners who say they have lost business because of steering had these comments:
● “We’ve been in business for 19 years and 99 percent of the time, the customers are very happy. Yet insurers steer business away from us constantly.”
● “I’ve had old customers tell me they were told to go to another shop.”
● “Insurers make the customers feel as though they won’t pay unless they take the vehicle to one of their shops.”
● “Vehicles have been removed from our shop because of insurers.”
“The companies tell appraisers what they can and can’t pay for,” says another shop owner. “We continually hear, ‘I know you need to do it, but I can’t pay for it.’”
Tell your customers to call their insurance company and tell them where they would like to have their vehicle repaired.
Customers should be told: “If you need any help deciding on which insurance carrier to buy your policy from, ask or call your local body shop. We can tell you which insurance companies are customer service friendly and will help with your insurance claim needs every step of the way. Some insurance companies make you feel that they have your best interest in mind when in reality they are just managing their bottom line.”
Suggested slogan for your office: