While you might not have to pay for it, it seems that automotive insurance agencies are trying to pass on the costs of fees and rentals to repair shops that work on auto body repairs. While some shops will work with insurance companies on those costs, the alleged situation is that those insurance companies will then use collections to try and skip out of associated fees entirely, or even use them to reduce the cost of a total loss payout to the vehicle owner.
The story comes from Repairer Driven News, a trade publication by the Society of Collision Repair Specialists (SCRS) who work on behalf of the collision repair industry. It details how some insurance agencies will use a third party collections agency to recoup the costs associated with things like rental car fees, total loss charges, and other claims related to collision repair. Normally, these fees are negotiated and agreed upon prior to repair work and paid for when you pick up your car. But it’s alleged that after you do, the insurance agencies—most notably Liberty Mutual, Safeco, and Metromile Insurance—will still send a collections agency to collect those fees from the repair shops working on your crashed vehicle.
Using Collections To Recoup Fees Feels Like “Extortion”
One repair shop in Colorado—Rickenbaugh Cadillac Company—has had multiple collections notices for total losses despite the claim being thought to have been settled. The director of the repair shop amounted the unfair collections as “extortion,” saying, “The biggest players on the insurance side have been extremely resistant in acknowledging OEM repair practices preventing the industry from moving forward in a more positive direction for the primary stakeholder—the owner of the vehicle—and that of their safety.”
Paid Under “Duress”
Another insurance company, Safeco, sent a collection notice to Keeler Motor Car Company in New York after it determined that the car was a total loss. Allegedly, Safeco had initially disagreed with the costs of storage and blueprint fees—the fee insurance companies pay for the assessment of your vehicle after a collision and the associated repair. It eventually relented after Keeler Motor Car said it couldn’t budge on those costs, however, it sent a notice after the car was picked up with Safeco claiming it paid the shop fees “under duress.” According to Keeler Motor Car, it had recorded conversations with Safeco on repairs and showed the collections agency that the payment was done fairly. They are still waiting to hear back from the agency.
Sometimes a vehicle doesn’t even need to leave the shop or even have the repairs finished before some insurance agencies send collections after them over fees. A shop in San Rafael, Calf., alleges that Metromile—a division of Lemonade Insurance—sent a claim on a Toyota they were working on and the initial estimate needed to be revised to the point of determining it was potentially a total loss. While an outside insurance adjuster agreed with the shop, Metromile refused to acknowledge it and repeatedly asked for “more information” before deciding the car was still repairable. The shop went ahead and ordered the parts and then received a collections notice seeking reimbursement of the Toyota owner’s rental coverage, saying the shop was “at fault for that portion of the rental bill.”
Agency False Claims
The most egregious story is from a collision shop in New York that requested to remain anonymous due to fears of repercussions from insurance agencies. It had an owner of a Tesla Model S that was deemed a total loss due to a $60,000 repair plan calling them claiming their settlement had been reduced. According to the customer, Liberty Mutual claimed to its owner that the shop had not returned the Tesla parts to Copart despite the shop sending the car to it. However, a VIN search on Copart showed that the vehicle was going up for auction along with the alleged missing parts. The story closes with a common comment between many of the shops Repairer Driven News spoke to: Understand the state and local laws of where your place of business is. Being familiar with your rights as a shop and a vehicle owner gives you far more power than you sometimes realize. That and having a good set of lawyers backing you and your business.