What you really need to know about auto insurance, and what your insurer won’t tell you
The following comments and suggestions are based on our experience in handling collision repairs and dealing with insurance carriers on a daily basis as collision repair experts and as operators of a vehicle repair inspection facility.
(This information in not intended to be used as legal advice. For legal advice, ALWAYS consult with an attorney.)
Always review the Contract of Insurance (Policy) BEFORE you sign the contract. Price is not the only reason to purchase one car insurance policy over another. Never, never, never buy an insurance policy without reviewing it first. Would you sign a contract in a business relationship or for your home mortgage without reading the contract first? That’s what most consumers do when they buy auto insurance. Insurance policies are not all the same. Recently, insurers have started to rewrite insurance policies to allow them to determine the settlement amount you receive based on factors that are not disclosed to you at the time you purchase the policy. These new terms do NOT benefit you as the policy holder.
“After an accident, the insurance company is telling me that I have to go to their drive-in claims center or preferred shop for an estimate or repairs. Is this true?” Absolutely not! It is your property and you have the right to choose where your vehicle is repaired. Furthermore, the insurance company will come to you to inspect your vehicle if they need to; there is no requirement for you to go see them, regardless of what the insurer says. Your insurer (or the at-fault party’s carrier) very well may try to steer you to their preferred shop by telling you that if you choose a repair facility that is not on “their list” that you will have extra out-of-pocket expenses and that the insurer will not warranty the repairs. These are all tactics to steer you to an environment where the insurer is in control, that’s all. The bottom line? Take your car to a reputable, certified shop that will work for you and your best interest.
Beware of the Insurance Company’s “Preferred Shop.” As a former “direct repair facility” for many insurers, I know all too well the pressures insurers put on their “preferred shops.” They pressure them to use of non-original, re-manufactured, reconditioned and salvaged parts, caps on certain charges like paint & repair materials, discounts (back to the insurer) on parts and labor charges and list goes on and on. So why does this even matter to you? Collision Consulting performs inspections on vehicles that have been repaired at other body shops that are on an insurance company’s preferred list. We have documented that 85% of all vehicles that were in a major collision were not only NOT repaired correctly, they were repaired so poorly they were unsafe and required additional repairs costing more than the original repairs or were totaled by the insurere upon the disclosure of this poor repair.
Only you authorize repairs to your vehicle, not the insurance company. Remember, whether or not you are at fault for the accident, only you can authorize any repairs to your vehicle, which includes how the vehicle is repaired and the type of parts utilized. Your insurance company only accepts or denies the claim and has the right to inspect the “loss.” (Remember, if you pay your premiums for collision coverage and you have a collision, then you have coverage.) The at-fault driver’s insurer basically has no rights because they don’t insure your vehicle, so don’t let them tell you what to do.
Choose a repair shop that is qualified to repair your type of vehicle. Many European and now some Japanese vehicles are utilizing Boron steel, aluminum, and adhesive panel bonding for lighter, stronger, and safer construction. Specific equipment and training are required to perform such repairs and most run-of-the-mill auto body shops just aren’t equipped for such repairs. Verify that your repair shop has the training and equipment required by the manufacturer to perform the repairs you need.
Never drop your Collision and/or Uninsured Motorist coverage. Most people believe that if you are not at fault for the accident, the other drivers insurance coverage has to pay for damages to your property. In most states, it is the at-fault driver that is responsible for the damage. Remember, the insurer owes the policy holder when there is a loss and has no obligation to the injured party (aka, you). So what do you do when the at-fault driver’s insurer disputes who is at fault and doesn’t pay, and takes 30 days to make their decision regarding liability, all while you don’t have access to a vehicle because yours is not drivable or the insurance company is only willing to pay for part of the damages? You would have no recourse but to file a lawsuit against the at-fault party. If you had collision and uninsured motorist coverage in your policy, then your insurance would pay you and then subrogate against the at-fault driver’s insurer.
You may be owed for a “Diminished Value” payment for your property damage loss. If you are not the at-fault driver in an auto accident, you may be able to collect for the loss in value of your property after it is repaired. While most insurance policies have written “Diminished Value” out of the policy for collision and comprehensive coverage, you are still entitled to collect “DV” from the at-fault driver. Obtain a “Diminished Value” appraisal once repairs are complete and submit a claim to the at-fault driver’s insurance company for payment.
You may dispute the insurance company’s offer if you don’t agree. Washington Law provides the ability for insurance consumers to dispute a low offer from your insurance company. Here are some tips:
– Small claims court. Small claims court does NOT allow attorneys and is a venue we have seen consumers be very successful in using to resolve a dispute with an insurer.
– The Appraisal Clause in your insurance policy. If you disagree with your insurer about the amount of the loss (that could be the value of your car or the amount to repair it to pre-loss condition) you can invoke “The Appraisal Clause.” Most insurance contracts have an appraisal clause that can be used for dispute resolution.
– The Insurance Fair Conduct Act Washington State Insurance Commissioner’s web site: www.insurance.wa.gov. You may file a complaint with the Commissioner’s office online or by mail.
Consult with an attorney about your rights if you are not sure about your rights or feel an insurance company is not treating you fairly.