Many repairers nationwide are experiencing intensified insurer pushback related to fully reimbursing consumers for rates and OEM repair procedures, according to Tony Adams and Tim Ronak from AkzoNobel. To help shops address this growing challenge, Adams, a business services consultant, and Ronak, a senior services consultant, teamed up in November to provide insight on how to help consumers who are underfunded due to a loss. Their presentation, “Developing Your Consumers’ Guide to Fully Reimbursed Auto Claims,” was held during the SEMA Show as part of the Society of Collision Repair Specialists (SCRS) Repairer Driven Education (RDE) series.
Adams and Ronak shared strategies on how to explain the claims payment process to consumers. They also offered a step-by-step guide to handling disputes and a tool kit with customizable documents that shops can use to educate and pass along to customers.
“We’re getting more pushback than we ever have because it’s costing more money to fix today’s cars,” said Adams.
The purchase price of new vehicles and the total cost of repairs are rising, he commented, due to new ADAS technology components and changes in construction materials. According to CCC Intelligent Solutions, the average purchase price of new cars is now over $50,000, and repair costs rose from $3,331 in 2020 to $4,774 this year.
When faced with a short pay, many consumers assume insurance decisions are final. “Absolutely, they’re not,” said Adams.
He said that repairers typically follow OEM repair standards and procedures, leveraging the embedded page logic within the estimating systems.
“It’s not padding the bill, but that’s the word that we sometimes hear,” said Adams. “It’s important to understand that and working to empower customers helps ensure fair reimbursement for everyone.”
The rising cost of insurance has led some consumers to opt for higher deductibles. Adams and Ronak shared a chart illustrating the shift to higher deductibles from Q2 2021 to Q2 2025. The information was originally part of a presentation given by Kyle Krumlauf, director of industry analytics at CCC Intelligent Solutions, during the CIECA CONNEX Conference.
CCC’s research shows a 5.8% decline in the number of drivers with $500 deductibles. While a similar percentage are moving to $1,000 deductibles, others are choosing even higher ones, such as $2,000 and $2,500.
“If you’re looking at what the path is to get fully reimbursed and you’ve got a $2,500 deductible, and then there’s a short pay on the other side of that, the insurance company is not wanting to fully indemnify their insured,” noted Adams.
Although it’s a small percentage of people with higher deductibles, Ronak pointed out there is a growing trend of percentages doubling. For $2,000 deductibles, the rate increased from 0.4% to 1.1%, and for $2,500 deductibles, it rose from 0.5% to 0.9%.
“Make no mistake, insurers are pricing policies such that consumers are choosing higher deductibles,” Ronak explained. “The reality is insurance costs have gone up all across the country.”
“I think it’s a trend that we will continue to see shift in that direction,” added Adams.
Understanding the insurance policy
Adams defined a consumer’s insurance policy as a contract between the policyholder and insurer.
“I used to tell some of my customers, ‘I didn’t buy your car, I didn’t wreck your car, and I didn’t choose your insurance company. … I’m merely the humble service provider trying to restore your car to a safe and proper manner,’” said Adams.
Because not every insurance policy has the same types of coverage limits, Adams recommended that repairers take the time to fully comprehend the contract. This will enable them to share coverage limits, guidelines regarding repair vs. replace, payment of loss details, and appraisal clauses with customers.
He reminded repairers that they aren’t lawyers and should not give legal advice. “Make sure that you’re walking that line very carefully,” he advised.
Ronak agreed. “I don’t want you to be attorneys, but you need to understand enough that you have the ability to effectively coach a consumer,” he said.
He explained that an insurer’s role is to ensure a vehicle is repaired in a manner that restores it to 100% of its pre-loss state, as per the insurance contract, with the lowest level of avoidable liability for the repairer.
“Insurers do not repair cars,” Ronak said. “They’re in the business of underwriting losses.”
For consumers to get reimbursed or indemnified, Adams encouraged repairers to familiarize themselves with the terminology in the contract, such as “like, kind, and quality,” “the prevailing competitive price,” or “the reasonable rate as defined by us.”
Ronak clarified that “like, kind, and quality” is an insurance term that refers to the vehicle being repaired to the standard it was before an accident. This can often lead to ambiguity.
“I would argue that ‘like, kind, and quality’ is kind of vague,” he said. If there are any differences, including hardness, shape, material, lumens, light, color temperature, or pattern, Ronak said those don’t meet the “like, kind, and quality” test.
“Just be clear: The language is the language, and it is interpreted literally in the contract,” said Ronak. “Ongoing transparency with the customer, repairer, and insurer is key.”
He also shared information about what is called “contra proferentem,” which means that if a contract term is ambiguous, it should be interpreted against the party who drafted it. In this case, if a contract exists between an insurer and a consumer, the benefit of the doubt will be given to the consumer.
“This is especially true when interpreting an insurer contract of adhesion, which is a standard nonnegotiable contract that the consumer can only accept or reject,” Ronak noted.
Quantify the loss
To better coach consumers, repairers should make an effort to understand how the insurer defines a loss in a collision claim and what the repair standard is, said Adams.
He emphasized that OEM procedures define what constitutes a safe and proper repair, and ignoring them can create safety and liability concerns.
“Unless you’re an engineer and have an engineering degree specifically in automotive collision repair, deviating from the OEM standard-specified repair procedures puts you in a position of liability at the end of the day,” Adams said.
“You need to fix that car so that you have minimized your liability,” added Ronak. “We’re not looking for you to get into a fight with an insurance provider. That’s not the goal. We want you to clearly understand your role as a repairer and where your liability exists.”
Adams also mentioned the importance of following the database times in the estimating system and P-Pages for procedures like structural repair, calibration, and corrosion protection.
Repair-related liability
When a collision repairer completes a repair, Adams said their legal and professional liability does not end when the customer picks up that car and is not limited to the items written on the original estimate.
“The repairer is responsible for ensuring that every repair performed restores the vehicle to OEM specifications and safe operating conditions,” said Adams.
He noted the difference between warrantying the vehicle for as long as the customer owns it and being liable for it after a repair. The first extends until the customer sells the car or trades it in; the latter extends until it is scrapped and removed from the road.
“That liability continues for the life of the vehicle,” said Adams.
“Liability is real, and it never goes away,” said Ronak. “It can change hands multiple times.”
That means any future owner, passenger, or driver could be injured due to an improper repair. They also commented on how courts and regulators recognize the repairer, not the insurer, as the final authority on whether a vehicle is safe to return to the road.
Key points:
- - The insurer’s estimate is not a repair blueprint. It is a financial document and a projection of costs that may omit required OEM repair procedures. A professional repairer’s duty is to identify all the steps required for a complete and safe repair, even if they were not initially listed or approved.
- - Liability is attached to the person performing the work. For example, if an unsafe weld fails or a missed calibration leads to an injury years later, the shop and sometimes the technician can be held liable. Courts and experts will not accept “the insurer wouldn’t pay for that” as a defense.
- - OEM repair procedures define the standard of care. Deviation from them creates exposure for negligence and product liability claims.
- - Documentation is a shield. Always document OEM repair research, pre- and post-scans, calibration verifications, and customer/insurer communications. If a safety-related issue arises, that record demonstrates that the repairer acted in accordance with professional standards.
- - Responsibility doesn’t expire. The “life of the vehicle” standard means that even if the car is sold or changes hands multiple times, the repair remains traceable by VIN, and the workmanship can be scrutinized years later in court or by investigators. In the John Eagle Honda Fit $42 million case, for example, the car changed hands four times, and the shop was found to be contributory and ordered to pay $31.5 million.
The bottom line, said Adams, is that a repairer’s liability extends beyond what’s written on the piece of paper.
“It covers every aspect of vehicle safety and integrity for as long as it remains on the road,” Adams pointed out. “The only real protection is to repair it right, document it fully, and follow the most current OEM repair procedures every single time.”
To determine who is paying for the loss, the speakers advised shops to let customers know the difference between a first-party and third-party claim. First-party claims involve the insurer and insured and are governed by a contract. In the event of a dispute, there is typically an internal appeals process, which may include the right to appraisal, mediation, or arbitration.
Third-party claims involve somebody and an insurer. They are covered by tort law, a body of civil law that provides a legal remedy — usually monetary damages — to individuals who have been injured by the wrongful acts or omissions of another person or entity. Third-party claims require proof of loss, which is defined as a formal, legally binding document that a policyholder submits to an insurance company to detail a covered loss event and the compensation that’s being requested.
Ronak and Adams provided suggested steps to share with customers when handling disputes:
- - Request a written explanation from the insurer for the denial of the procedure or operation.
- - Compare against OEM procedure documentation.
- - Use a professional repairer justification to support the request.
- - Escalate with the state Department of Insurance (DOI) if needed.
- - Employ the small claims court for unreimbursed balances if the DOI fails to enforce the contract.
When there is a third-party loss, Ronak explained that insurers may also have disputes.
Adams and Ronak also addressed the “subrogation effect,” which occurs when first-party insurers recover payment from at-fault third-party insurers after paying a claim under the consumer’s first-party contract. They said consumers should not subsidize insurer recovery by accepting less than full reimbursement for their loss, and subrogation applies only after full indemnification for the loss has been satisfied.
“The reason subrogation is becoming a larger issue is … we have insurers who utilize the subrogation process to their benefit,” he said. “They have state-run tribunals that now audit the first-party insurer’s payout of a third-party claim.” He pointed out that if they fail to have enough documentation, the third-party insurer will short-pay the subrogated claim reimbursement from one insurer to another.
The outcome, Ronak said, is that the insurer seeking third-party reimbursement now has a loss because they will get under-reimbursed for what they paid out due to not having enough documentation in place to support the claim.
When justifying a loss, Adams recommended providing documentation — including OEM repair procedures, photos, scans, and diagnostic results — to support what was needed. Consumers can also sign a Direction to Pay (DTP), a financial agreement in which the policyholder instructs the insurance company to pay the claim proceeds directly to a third party.
The speakers encouraged repairers to inform consumers of their rights, which include:
- - Right to choose your repair shop
- - Right to OEM-standard repairs
- - Right to full indemnification per contract, not partial reimbursement
- - Right to documentation of denial reasons in writing
- - Right to arbitration, appraisal, or legal recourse
To assist shops in communicating effectively with customers, Ronak shared a tool kit with documents that can serve as a starting point:
- - 1st Party Claim Denial Appeal Process for a Consumer
- - 3rd Party Claim Denial Action Process for a Consumer
- - Specific Procedure or Part Denial Rebuttal Letter for an Insurer – By Type
- Claim Denial Rebuttal Letter – ADAS Scanning and Calibration Denial
- - Specific Procedure or Part Denial Rebuttal Letter for an Insurer – By Type
- Claim Denial Rebuttal Letter – OEM Part Denial
- - Specific Procedure or Part Denial Rebuttal Letter for an Insurer – By Type
- Claim Denial Rebuttal Letter – OEM Procedure
- - Pre-Litigation Path
- OEM Part or Repair Procedure Insurer “Denial Documentation” Request Template
- - Final Demand for Payment — Failure to Fully Indemnify for OEM Repairs
Ronak said the goal is for consumers to receive safe, fully repaired cars; for repairers to be compensated fairly for the required repairs; and for insurers to fulfill their contractual duty and avoid any bad faith exposure. As a result, he said the credibility of the industry improves.
For more information, email Tim Ronak: timothy.ronak@akzonobel.com or Tony Adams: anthony.adams@akzonobel.com.
Stacey Phillips Ronak