WHEELERSBURG, OHIO - When insurers recommend that consumers patron specific collision repair shops to have work performed on their autos, often, they have an ulterior motive in mind – saving money.  The shop’s conduct towards steered consumers, in many cases, is governed by clauses in their direct-repair contracts and/or agreements with insurers, and many times these clauses are detrimental to consumers, limiting repairs and payments to which consumers would otherwise be entitled.

An example of a limiting clause in a direct-repair agreement would include one which mandates that shops suggest appearance allowances to consumers in lieu of having actual work performed on a panel or part.  For example, if replacement of an expensive alloy wheel was justified due to an unsightly scratch that didn’t affect the safety or function of the auto, an insurance-friendly shop might try to sell a consumer on the idea that they could pocket $75 to $100 in lieu of a wheel replacement.  They may even offer to cover all or a portion of the customer’s deductible.   Trusting consumers with an older car  might consider this offer a wonderful chance to sack some unexpected cash. But, let’s consider what consumers might lose by accepting appearance allowances offered by an insurer or its partnering shop:

The fact of the matter is, a consumer is owed full value for all covered losses to an insured auto, minus their agreed-upon deductible. They paid an insurer for the benefit of coverage in the event of a mishap, and the cost of a new alloy wheel and installation might be several hundred dollars as opposed to the $75 or $100 they are being offered.  Since most people are unaware that there is no obligation to repair damage in order to be paid for a loss, they think they are being offered some special deal on a one-time-only basis that would, under ordinary circumstances, get them into trouble. By taking the meager appearance allowance rather than insisting on payment for the full value of damages, consumers are cheating  themselves out of hundreds of dollars and giving up some rights and choices that could be beneficial to them. 

Unlike consumers who financially suffer, shops benefit as a result of this scam, because it  endears them to insurers who will save money, and further strengthens their potential to continue receiving more unsuspecting consumers by means of insurer steering.

Few, other than partnering shops and insurers,  know the clauses contained in direct repair provider (DRP) contracts and agreements. Historically, consumers have been kept in the dark about these deals, even though the settlement and payment of their claims are greatly affected by them.  The legislature in the state of Oregon recognized this, and has proposed that DRP shops provide notice to consumers that a contract or agreement exists with an insurer  by posting it on signage in the shop.  The proposal seeks to make the  document available for all to examine, even to the point of requiring shops to explain the details of the agreement to consumers upon request. 

Not surprising, insurers bannered under the Property Casualty Association of America (PCI) are urging the legislature to reject the bill.  Collision Week News recently reported that insurers are concerned about the issue of confidentiality.  It seems disclosure would violate a non-disclosure clause in the DRP contract and make consumers leery of insurer network shops. 

Safe Collision Repairs founder, David Williams says, “It makes one wonder what lurks beneath the surface of insurer-shop partnerships, and what they  are hiding, doesn’t it?”

Even though the laws in the tristates of Ohio, Kentucky and West Virginia, nor in most other states, require disclosure of the contents and clauses of DRP agreements and contracts, Williams suggests that consumers ask shop owners and managers to allow them to read the documents that govern their work, especially the documents relating to the particular insurer who is paying their claim.  “Consumers,” he says, “may find the documents mandate use of inferior aftermarket or salvage parts.”  They may also, “contain repair clauses that require the shop to overlook or minimize damage that would prevent a consumer from being truly indemnified.” 

“If a shop feels it is best NOT to disclose the contents of a contract or agreement between itself and an insurer, it would be a great indication that they are hiding something,” says Williams, “preferring to protect an insurer with whom they have a sweetheart deal over the car owner who is  their true customer.  In those cases,”  he says, “consumers should run from the shop, not walk away.”

Williams adds that because the volume of work in most shops is slower than usual, “it’s a buyers market and consumers can be a little more demanding and get away with it." 

Many shops in the tristate would love to have another job to work on, and  Williams suggests shopping among those repair facilities who are not afraid to be completely honest with consumers.

content & design 2002-2008 David Williams and SafeCollisionRepairs.com

About Safe Collision Repairs

For more than ten years, David Williams of Wheelersburg, Ohio's Safe Collision Repairs has worked with consumers and attorneys in the tri-states of Ohio, Kentucky and West Virginia to expose unsafe auto repairs and maximize recovery on auto insurance claims. Some of the company's services include Post-Repair Inspections, Prepurchase Inspections, Auto Damage Assessments, Lemon Law Investigations, Expert Court Testimony and Diminished Value Calculations using an advanced version of Network Information Communication's WreckCheck program.

Inquiries can be directed to: Safe Collision Repairs David A. Williams Post Office Box 70 Wheelersburg, Ohio 45694 (740) 456-1111 (740) 355-4056

Disclaimer

The content expressed on this website and in the article above represents the opinions of David A. Williams. Williams is neither an attorney nor public insurance adjuster, but is an expert, consultant, and writer specializing in the field of automotive collision repair and valuations. The information provided herein is not intended to be a substitute for legal or insurance advice. Because collision repair is a continually evolving science, any text, materials or links found herein are provided without claim or guarantee to their accuracy or completeness.