Customers are asking if they make it up as they go along

Just because an insurer states something does not mean it’s true.

In this article, we’ll address the real-life issue of outright lies and deceit committed by individuals involved in the collision repair industry and in this article, it does not pertain to collision repairers.

As much as they might like to, insurers cannot change the rules in the middle of a claim any more than the policyholder can.

In a perfect world, everyone would conduct themselves in an honest and ethical manner and live the old axiom, “Do unto others as you would have them do unto you.” However, as of late, this is all too often not the case when it comes to insurers.

In a recent incident, one of my clients was provided a copy of an e-mail from his insurer’s claims manager, which reads as follows (with redactions):

I wanted to introduce myself as I am Jeff’s manager. We have no problem inspecting your vehicle and working with ABC Body Shop. There are some items that you will want to discuss with (the shop’s owner) prior to having him start the estimate of repair:

Cleaning - This is not a fee paid by the insurer, it’s a cost of doing business.
Scans - This is not always considered necessary.
Storage – This will not be a fee paid unless the vehicle is deemed a total loss by (insurer’s name). Storage will be paid from the time the vehicle is deemed a total loss and not prior. This only comes into play if the vehicle damage is severe enough to deem the vehicle a total loss.
Seat Belt inspection - This is a fee that will not be paid.
Sand and polish - Will not be paid, unnecessary procedure.
Airbag inspection - This is a fee that will not be paid.
Test drive - Not paid, considered a cost of doing business.

If ABC Body Shop requests these types of fees, we will be notifying you and they will need to be paid by you at the time of pickup. Once we have completed our estimate, we will notify you of any other differences so you can be prepared for them at the time of vehicle completion. As Jeff stated before, you have the right to choose any collision center to repair your vehicle, and we will do our best to minimize any out-of-pocket expenses you may be charged.

To many, this would likely carry some weight and draw concern for both the customer and repairer. However, if we look at this from a strictly realistic viewpoint, there really are no reasons for anyone to be concerned other than the insurer whose claims manager made the comments, which are nothing more than baseless warnings and threats to their policyholder.

A Few Truths

Let’s review a few truths:

Licensed claims adjusters are supposedly trained and vetted to take on a position of public trust. This means that the individual has gone through sufficient training, testing and licensing (in most states) to represent the insurer and to properly assist the policyholder and/or claimant during the claims process. They are also bound and obligated to do so in a fair, ethical and unbiased manner where the rights of both parties are protected. In other words, claims people are expected to tell the truth and conduct themselves in a fair manner to the benefit of the insurer (employer) they represent and the policyholder who bought their insurance and is relying on them to see to it that their contractual obligations (promises) are honored.
Insurance policies are legal and binding contracts that clearly convey the obligations of the parties listed within them. Simply stated, this means that if you do this (i.e. pay your premium on time), we will do our part (as listed in the policy contract). Most insurance policies are known as adhesion contracts where the issuer makes all the promises and rules and the purchaser agrees to abide by them and pay the premiums for the coverage selected, with no negotiations. As in any contract, once an offer and acceptance have been met, the contract and all its obligations and duties are in force.

So, in this particular case, the consumer bought the insurer’s promises and, when they had a covered loss, they made a claim to acquire the benefits promised to them to be indemnified and made whole. But now, the insurer, through their claims manager’s actions, is attempting to change and reduce their obligations and add caveats and restrictions to the promises the insurer made to their policyholder?

As much as they might like to, insurers cannot change the rules in the middle of a claim any more than the policyholder can. If they wish to modify their policy, they have to do so through contractual modifications or endorsements, and it has to be accepted by the insured party before the issue arises.

Understanding this, let’s go through the message by the claims manager piece by piece to see it for what it is:

We have no problem inspecting your vehicle and working with ABC Body Shop. There are some items that you will want to discuss with (the shop’s owner) prior to having him start the estimate of repair. Policyholder’s response: There shouldn’t be a problem as the choice of repairer is the customer’s and the insurer has the right to inspect it or not. Please advise me, in writing, within 24 hours, if you wish to inspect my vehicle. If I do not hear from you within 24 hours, I will instruct my shop to proceed with my repair so as to avoid any unnecessary delays and related storage costs.
Cleaning - This fee is not paid, it’s a cost of doing business.

Policyholders response: Show me where in my policy where this is a cost of doing business.

Storage – This will not be a fee paid unless the vehicle is deemed a total loss by (insurer’s name). Storage will be paid from the time the vehicle is deemed a total loss and not prior. This only comes into play if the vehicle damage is severe enough to deem the vehicle a total loss. Policyholder’s response: I’ve been assured that the only time this fee will be assessed is if and when the repairer is unable to proceed with the repair due to my failure to provide them direction to proceed with the repair. The only time that will happen is if and when I’m not provided what I’m entitled by your insurance company, so I would encourage you and your staff to respond to my repairer and me in an efficient and expeditious manner. Also, please provide me a copy of my policy where it states this loss-related expense is specifically excluded.
Seat belt inspection - This is a fee that will not be paid. Policyholders response: Show me where this is not necessary.
Sand and polish - Will not be paid, unnecessary procedure. Policyholders response: Show me where in my policy that this is excluded.
Airbag inspection - This is a fee that will not be paid. Policyholders response How is this not a necessary procedure? Show me where it says it’s not.
Test drive - Not paid, considered a cost of doing business. Policyholders response: Show me where it says that this is a cost of doing business.

Summary: Unfortunately for repairers and consumers, it’s not uncommon for some insurers and/or claims people to lie to consumers in their ongoing efforts to mitigate and contain claims-related costs/expenses. It is rare, however, that insurers will do this in writing! Most claims people are smart enough to avoid making written statements that they know (or should know) are false and, in many instances, against the laws and regulations governing insurers’ conduct when handling claims.

We’ve all had experienced insurers acting in an egregious manner; however, not all repairers know how to combat it on behalf of their customers. The ability to recognize such issues and help your customers defend themselves against such conduct is an added advantage to a quality-oriented repairer. It’s knowledge like this that makes being “The Only One” a good thing for you, your community and your industry. There’s nothing wrong with being “The Only One” if it’s for the right reasons!