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Thread: legal liability discussion

  1. Join Date
    Jan 2009
    Location
    Southaven, Mississippi
    Posts
    792

    You are correct, Roger. Insurance companies have never had a problem trying to shift the costs of their own lack of efficiency and incompetence to shops. The problem has only gotten worse as more and more insurance companies have dramatically reduced the staff necessary to process their administrative responsibilities to their DRP "partners", making the assumption that ll shops must please them as their partners do.

    I once went at it with an adjuster over storage and admin charges and asked her if she could tell me how I earn income. She was perplexed by the question so I helped her out by saying I make money by repairing wrecks. I went on to say that the vehicle we were arguing over had occupied space in my shop that was dedicated to generating income. I also pointed out that every minute of my time devoted to helping her do her job took away from mine. It concluded by me stating that she owed me for the use of my space as well as my time, both of which had compromised my ability to generate income and it was not negotiable.

  2. Join Date
    Jan 2009
    Location
    Ma.
    Posts
    466

    Many years ago, the adjuster told me that my rate was too high and that last year I repaired 5 vehicles for them at $XX /hour.
    I replied that that was last year, MY rates have increased!

  3. Join Date
    Jan 2009
    Location
    Texas
    Posts
    1,321

    Repairers talk about this and that and how the manage to eke out a feel good moment and perhaps a few more dollars on each WO without realizing they are giving away the store.....

    Having pondered the why for many years it seems repairers don't see that discussing their consumer's repairs with an insurer just might not be the thing to do... any communication regardless of form with an insurer. All without gaining the right to do so from the consumer. And I don't mean checking a block but that the consumer actually understands what is going on. The consumer most certainly does not understand.....anything. The don't understand in most cases they own the property, not the insurer and the only say the insurer has is embodied in the policy, another item few if any consumers understand until they either get hurt like the Eagle case, or something falls off their car. They have no idea the repairer is negotiating with the insurer about the consumer's car, determining what is being done to the car.

    Most repairers must be befuddled by what their responsibility is to their customer; the party with which they have a contract, a contract the consumer expects to take care of their interests.

    As long as this market aberration has been going on, the vast majority just don't get it. All repairers fall under the deal of "penny wise, pound foolish'.
    Roy Smalley,
    Texas

  4. speaking of negotiating/communicating

    Speaking of communicating with an insurer...check out this email from an adjuster to our customer. Speaks to exactly what you are saying Roy:

    After close review, I think the frustration associated with the difference in the cost of repairs should be directed solely at the body shop. I have been writing estimates for over 19 years all over the country, and I cannot recall working with a single repair shop that refused to negotiate with insurance companies. Iíve never seen anything similar to what was included in their estimate (see the attachment). I have heard in New York City there are shops like the one you selected, but thankfully, Iíve never dealt with shops in NYC.

    Itís been my experience insurance companies and body shops reach agreed prices on the repairs on likely 99.9% of all claims. Estimating is not an exact science - concessions are made and repair operations and times are negotiated. To close the door from the outset, is extraordinarily unusual.

    Based upon our conversation this morning, it sounds as if the shop clearly advertised their atypical stance, and you were aware of their position prior to dropping off the vehicle. They decided to ignore the usual, customary, and reasonable estimates we provided and handled the repairs disregarding our estimate entirely.

    I would need to spend about half an hour dissecting their estimate and our estimate to root out the exact amount. Iím sorry, but Iím not going to go through the estimates line by line. What I can gather at a quick glance are two important points:

    1. We used nothing but OEM parts. The part prices appear to be the same.
    2. I believe our repair times differed from the repair shopsí prices. I canít be certain, but this is probably a big reason why you had to pay out of pocket. The reason why I canít say definitively is the repair shop failed to include any labor times on their estimate. Notice on their estimate every single operation does not include a labor time. This is critical. Their estimating system company, Mitchell, and our estimating system company, Audatex, have spent countless hours (and Iím sure a bunch of money) conducting time/study analyses for every single repair operation. Including the labor times in the estimate is the standard for the industry. In my experience reviewing auto estimates, I have never, I repeat, never seen this before. Their labor rate is not included on their estimate so I cannot determine how much repair time was needed for certain repair operations.

    We owe for usual, customary, and reasonable repairs. The shop failed to follow industry accepted, usual, customary, and reasonable procedures by not agreeing to negotiate with the insurance company.

    Iím sorry, but at this time we donít have any information supporting we owe more for your repairs than what we have previously paid.



    Bwahaha...this guy...Customer has retained an attorney.

  5. Join Date
    Jan 2009
    Location
    Texas
    Posts
    1,321

    Yes good example of exactly a very basic, fundamental flaw in the repairer's association with a third party. I could go on and on about the issue of communications as I am wont to do over and over. But it is clear what I understand...that I believe is correct, certainly absent any logical dispute that has never been forthcoming...is that it boils down to who has the contract and who exactly are parties to the contract of repair? So then who has the right to communicate with the seller of services?

    That is an issue that apparently has never been clearly defined by a court of national standing given the practices between these three parties. With one exception. The CD of 63 has come closest, but it is old and weak; it lacks the punch of the one or two basic issues behind insurer actions. There are so many conflicting issues that affect repairers they just can't see how easy it is to address the conflict so we see over and over, repeat of failed strategies. They come and go and fade away, but in a few year here they come back again.

    Communication is but a result and I am just making one point of many that could be made where the contract for repair is not preeminent. The results, those controls insurers use over repairers are many, all are familiar but are critical to the over all ability of insurers to interject themselves into the relationship between two contracting parties, all the while not formally a party?

    Of course the "it" is the contract. This is where the insurer is most vulnerable. Even though there are many types of direct contracts and even on the edge of contracting implied associations, actions by insurers are clear. They do affect every aspect of the contract; timing, content of repairs, time for repairs, pricing of repairs, which repairs they actually will pay for, or not, and who gets the continual flow of business. Yet they have always declared when pressed, at least in my experience, the contract is between the repairer and the damaged party. Otherwise, why wouldn't they step up to pay for the damages in the Eagle case for example? You think they are going to accept any result from that experience? I can guarantee you their defense will be the usual....we don't repair cars. So affecting every aspect does not leave them responsible for any outcome?

    The problem in tying the insurer to their actions goes back, not just to power and influence, but to the inability to understand and then address what makes it all work for them. Those simple, few fundamentals that refute their positions.

    There are just two that can today still be addressed. Just two. One. Who has the contract? As I have said many times, the insurer surely has a right to address their costs but not directly as they do. They have methods that can control repair expense allowed under the policy but that doesn't extend directly into the repair contract.

    So just to argue let's say insurers do have rights under the repair contract. Just how can they abrogate their responsibility for repairs? I can never see a time where an insurer will step up and take that responsibility. Impossible? No but the entire character of insurance would be altered into something new where repairers in fact would become a direct link to insurance business. And a side effect would be if they did, insurers could control the price of repairer production.......so the insurer would be directly and totally responsible for repair results.

    Two. If they are not party to the contract, can they directly affect the contract by establishing any type of pricing matrix supported by methods designed to allocate market share?

    Two. That 's it. All the other controls really don't matter. These are the two that are basic and can be challenged.

    Of course these are my opinions as are all my statements, I am not an attorney and certainly am not suggesting that I am. All my many many discourses are directed to clear the air as to what I believe are the only routes to resolution, contract and payment. All else is superfluous.
    Last edited by Roy Smalley; Yesterday at 10:21 AM.
    Roy Smalley,
    Texas

  6. Join Date
    Jan 2009
    Location
    Ma.
    Posts
    466

    ShaneC,

    In my opinion, that email would cause the insurance company to loose in Ma.
    While the Ma. law requires the body shop and the insurance company to negotiate. It does not mean that you must agree.
    The shop has , in my opinion, negotiated with the ins company but the adjuster will not negotiate with the shop, (Re; I would need to spend about half an hour dissecting their estimate and our estimate to root out the exact amount. I’m sorry, but I’m not going to go through the estimates line by line)

    The terms of the policy should apply, not the opinion of the adjuster. (Except where some policies state that they will pay the amount that they determine the cost to be.)

    In Ma., the policy states that they will pay the costs of the repair. (not the exact words but the meaning is clear)
    And it should be noted, in most business in this free economy, the owner sets the costs of their services.

    In Ma., there have been bills presented before the state on setting the cost of repairs (labor) that have never been voted upon. Cleary showing that the state does not want to have anything to do with rate setting.

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