With 253 million cars on the road in the US, there's a pretty good chance that accidents will happen, even to the most careful of drivers. Over five million non-fatal crashes occur every year, setting into motion millions of insurance claims. Insurance companies, under the guise of swift claims service, often mislead claimants in an effort to reduce the amount paid out for each claim. If you've been involved in an accident and need your car repaired, you may be encouraged by the insurance company to have the repairs done at one of their "preferred" body shops - and they'll give you a list of reasons why this is a good idea; however, they may not tell you the entire truth:
- Repairs are "guaranteed" - Sometimes insurance companies will tell you that they cannot guarantee repairs if they are not done by one of their preferred body shops. This is not true. It is the body shop's responsibility to warranty the work they do.
- You will need to pay the difference between what the preferred shop would charge and another shop charges - Initial insurance estimates often fall short of actual expenses; body shops must follow the standards set forth by the auto manufacturer to return your vehicle to pre-accident condition. You are not be required to pay the difference between a preferred shop's rates and those of a non-preferred shop, unless your insurance policy explicitly states that this is the case.
- Preferred shops will give you quicker service - Most damaged vehicles can be inspected within three days of the accident, regardless of whether it's at a preferred shop or not. Inspections by a claims adjuster which take longer than three days can be the result of an insurance company dragging its feet in an attempt to steer you toward a preferred shop.
- Shops not on the preferred list are labeled as difficult to work with - Translation: the non-preferred shop will not cut corners or withhold information from the vehicle owner.
- Claims settlement takes too long at a non-preferred shop - Settling a claim is in the hands of the insurance company, and a longer-than-usual repair time can be a result of an inaccurate estimate on the insurer's part or a slow response time by the insurer to the body shop.
Why do insurance companies try to steer you toward "preferred" repair shops?
Consider this: the average collision claim in 2013 was $3,144. Multiply that figure by the over five million accidents that occur each year, and you can see why insurance companies want to hold the line on claims payouts.
In an effort to produce maximized profits through the reduction of claims paid, insurance companies will sometimes enter into agreements with repair shops. Known as a Direct Repair Program (DRP), this agreement between an insurer and a repair shop guarantees a certain flow of work into the shop in exchange for a discounted rate for repairs.
Unfortunately, in the quest to maximize profits, sometimes the insurance companies put a squeeze on the repair shops - tightening budgets, reducing payouts, encouraging the use of junk or substandard parts, pressing for shortcuts. In order for the repair shop to continue to make a profit on the insurance work, the customer receives substandard repairs. And these repairs can be dangerous.
Auto Repair Claims and Your Rights
If you've been involved in a car accident and need repairs made to your vehicle, the main thing that you must remember is that you can take your car to any body shop that you choose. It's the law! Your insurance policy will spell out the agreement between you and the company, but your insurance company must pay to return your car to pre-accident condition, minus your deductible if you were at fault in the accident.
You also have other rights:
- You have the right to expect genuine, OEM parts
- You have the right to a guarantee that your vehicle will be repaired to factory standards
- You have the right to a minimum five-year warranty on factory replacement parts
- You have the right to a paint warranty of at least three years
- You have the right to a lifetime warranty on all labor performed in the course of the repairs
If you've been involved in a traffic accident, getting your car repaired can become an even bigger nightmare than the accident itself. Insurance companies like to capitalize on the fact that being without your car is a major inconvenience, and will sometimes push you toward quick repairs at a "preferred" shop in order to minimize expenses and maximize profits. Don't fall for these tactics. Your safety and the safety of those riding with you could be at stake.