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There are numerous ways that insurance companies steer customers. What is common to all situations is that the personnel that you are dealing with are trained while you are inexperienced and expect them to help and take care of you.
One method is to tell the consumer that they have to go to a shop in its network or:
They will not get their vehicle repaired promptly.
Their repairs will not be warrantied.
They may be required to pay additional costs
Another method is by telling a consumer that “you can take your car anywhere you want for repairs, but you must take it to XYZ Autobody for an estimate.”
After the consumer gets an estimate from XYZ, the insurance company states they will pay no more since XYZ is “capable” of repairing the vehicle for its estimate.
Whatever the ruse the end result is the same; The consumer is pressured to go to a repair shop that offers the insurance company concessions or possibly made to pay out of pocket for quality repairs. Neither of which should be allowed and both of which are borderline illegal at best.
Bottom line: The insurance company is responsible for the proper and complete repair to the vehicle and the vehicle owner is entitled to go to the repair shop of their choice.
Good sources for additional information are available at:
www.yourvehicleyourchoice.com
as well as
www.stopsteering.com.
Showing posts with label collision repairs. Show all posts
Showing posts with label collision repairs. Show all posts
Tuesday, January 6, 2009
Sunday, November 30, 2008
Body Shop Labor Rates
As a consumer, what concern should body shop labor rates be to you? After all, collision repairs are very expensive and often the cost of the repair is paid for by an insurance company less any deductible that might be involved. Because of the importance of the safety involved in collision repair and the post repair value of the vehicle, it is an area that bears looking at.
If you have made a trip to the New Car Dealership recently you would find that the labor rates in the Service Department are $90 and up while a peak inside the Dealer’s Body Shop, if they even still have one, are below $50 an hour. How can a business under the same roof have such vastly different rates? Are the service rates unrealistically high? Are the real estate taxes less in one area than another? Are the costs of heating and electric less? Are the skill levels less? The answers to all of those questions is no. Then why is there such a large disparity in labor rates? The simple answer is insurance companies.
After an accident you may have taken or towed your car to a shop that you have experience with before you contact the insurance company. Then when you contact the company they may “suggest” using one of its repair shops. How strongly they make this suggestion varies from company to company. However, if you are persistent they will send an appraiser (read cost containment officer) to assess the damage. By this time a reputable repair shop will have already prepared a damage estimate for you. The repair shop’s estimate is actually required in the State of Illinois as a consumer protection under the Collision Repair Act.
Although your chosen repair shop has prepared a detailed repair estimate it is extremely rare that the insurance company representative would accept that or write one of its own that mirrors your professional’s opinion. But for today’s exercise we will only consider the labor rate. The insurance appraiser uses the labor rate approved by the insurance company.
When questioned by a claimant, every insurance company will parrot the same excuse, “we pay the prevailing labor rate in the area.” Who establishes this prevailing labor rate? Each individual insurance company does, that’s who. They do this by writing its own estimate and refusing to pay any rate above its chosen “prevailing rate.” If it is a true prevailing rate, then every company would pay the same rate. But they don’t. One company might pay $48, another $46 and others $44 or $42. Some sub standard insurers are still writing $22 to $24 and as recent as 2007 I saw one company write an estimate at $18 an hour. Clearly there is no such thing as a prevailing rate.
You may ask doesn't quality stand for something? Not to an insurance company. While they will say they want quality repairs what they really want are company profits and it doesn't matter who pays. And ultimately it is the vehicle owner who will pay. Controlled labor rates control the quality of repairs and ultimately the safety and value of the vehicle.
If you have made a trip to the New Car Dealership recently you would find that the labor rates in the Service Department are $90 and up while a peak inside the Dealer’s Body Shop, if they even still have one, are below $50 an hour. How can a business under the same roof have such vastly different rates? Are the service rates unrealistically high? Are the real estate taxes less in one area than another? Are the costs of heating and electric less? Are the skill levels less? The answers to all of those questions is no. Then why is there such a large disparity in labor rates? The simple answer is insurance companies.
After an accident you may have taken or towed your car to a shop that you have experience with before you contact the insurance company. Then when you contact the company they may “suggest” using one of its repair shops. How strongly they make this suggestion varies from company to company. However, if you are persistent they will send an appraiser (read cost containment officer) to assess the damage. By this time a reputable repair shop will have already prepared a damage estimate for you. The repair shop’s estimate is actually required in the State of Illinois as a consumer protection under the Collision Repair Act.
Although your chosen repair shop has prepared a detailed repair estimate it is extremely rare that the insurance company representative would accept that or write one of its own that mirrors your professional’s opinion. But for today’s exercise we will only consider the labor rate. The insurance appraiser uses the labor rate approved by the insurance company.
When questioned by a claimant, every insurance company will parrot the same excuse, “we pay the prevailing labor rate in the area.” Who establishes this prevailing labor rate? Each individual insurance company does, that’s who. They do this by writing its own estimate and refusing to pay any rate above its chosen “prevailing rate.” If it is a true prevailing rate, then every company would pay the same rate. But they don’t. One company might pay $48, another $46 and others $44 or $42. Some sub standard insurers are still writing $22 to $24 and as recent as 2007 I saw one company write an estimate at $18 an hour. Clearly there is no such thing as a prevailing rate.
You may ask doesn't quality stand for something? Not to an insurance company. While they will say they want quality repairs what they really want are company profits and it doesn't matter who pays. And ultimately it is the vehicle owner who will pay. Controlled labor rates control the quality of repairs and ultimately the safety and value of the vehicle.
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