The Truth About Collision Repairs and Insurance Company Involvement
The Truth About Collision Repairs and Insurance Company Involvement
When you take your vehicle to a well-known and highly-rated body shop after an accident, it’s only natural to expect that the repairs will be handled by experts who will restore your car to its original condition. Unfortunately, from my experience, the reality is far more complex and often disappointing. While a shop’s reputation may give you some confidence, the tangled web between collision repair facilities and insurance companies can leave you with a vehicle that looks good on the surface but is far from safe. Let me explain why this happens and what you can do to protect yourself.
The Influence of Insurance Companies on Repair Quality
Many people assume that taking their vehicle to a reputable body shop guarantees expert repairs. While that should be the case, the real issue often lies in the relationship between the repair facility, the insurance company, and you—the consumer. Most of us rely on our insurance policies to cover collision repairs, while assuming that the shop will follow best practices. However, many repair facilities are not equipped to deal with the complexities of insurance policies, leaving you at a disadvantage.
In my years in the industry, I’ve seen how insurance companies frequently intervene in the repair process, aiming to reduce costs. They often pressure repair facilities to use cheaper, non-OEM (Original Equipment Manufacturer) parts or alternative repair methods that deviate from the manufacturer’s guidelines. While this approach may benefit the insurance company’s bottom line, it often results in a vehicle that may look fine but could be unsafe in future accidents.
The Financial Loophole: When Repairs Don’t Reflect the True Cost
An insurance policy is designed to indemnify you for a financial loss. While the physical damage to your car happens at the time of the accident, the financial loss isn’t realized until the repair facility invoices the work. Consequently, if the insurance company influences the shop to ignore your manufacturer’s repair guidelines and requirements or otherwise cut corners, use alternative parts like aftermarket or used parts, ultimately never being billed for what should have been done, hence because it was not done, you haven’t incurred the full financial loss that your policy should have covered. This loophole allows insurance companies to save money at your expense, often leaving you with an unsafe vehicle, while passing liability onto the collision center if something catastrophic were to happen in the event of a subsequent accident.
One historic example of this was the John Eagle Collision Center vs. Tracy Morgan: In this high-profile case, the shop repaired a Honda Fit using adhesive instead of welding as specified by the manufacturer, resulting in severe injuries to the occupants during a subsequent collision. The jury awarded the plaintiffs $42M, emphasizing the importance of adhering to OEM guidelines and the dangers of cutting corners to save costs. The judge is on record stating that when John Eagle made the decision not to follow the OEM guidelines- that was a business decision, thus holding them liable for the injuries sustained in the subsequent accident.
The Risks of Direct Repair Programs (DRP)
Insurance companies also control costs through the use of Direct Repair Programs (DRP), Preferred Partners, or Network Shops. These programs may seem convenient for consumers, but they often prioritize cost-cutting over repair quality in exchange for a steady stream of referral work. DRP shops, operating on tighter margins, may cut corners—such as not completing all manufacturer-required repairs or using inferior parts—to meet the insurance company’s demands. While this reduces costs for insurers, it can compromise the safety and durability of your vehicle. Make no mistake, shops working under this model are working to serve the hand that feeds them, and not working in the best interest of the consumer. As such, I have seen DRP contracts that have explicit verbiage limiting a repair facility ability to properly inform the consumer of their rights, effectively cuffing their hands in trade from referral work.
Non-DRP shops are typically more inclined to follow the manufacture’s guidelines, though this isn't always guaranteed. When genuinely advocating for the consumer, these shops often find themselves at odds with the insurance company. The insurer might label the shop as difficult, while the shop—feeling the pressure—may falsely imply that they are constrained by what the insurance company authorizes. This happens because repair facilities, although well-intentioned, are often not experts in policy law and aim to avoid upsetting you, the customer. Unfortunately, this well-meaning approach can backfire, leading to delays, substandard repairs, additional financial burdens, and, ultimately, a vehicle that may be unsafe to drive because the manufacture’s guidelines were not properly followed. The reality is, only you can authorize the repair work, including the choice of parts.
The Importance of OEM Parts and Understanding Your Policy
Not all insurance policies are created equal, and many may not cover the full cost of OEM parts or other expenditures relating to the loss. It’s crucial to research and select a policy that does. That being said, most repair centers won’t ask for a copy of your policy and may default to the cheapest, easiest option as they have been “conditioned” by the insurance company’s typical pressures. However, it is important to understand that you have the right to insist on OEM parts, even if it means coming out of pocket for the difference. This ensures that your vehicle is repaired according to the manufacturer’s standards, preserving its safety and value.
In the class action lawsuit, State Farm vs. Avery, the lawsuit revolved around State Farm’s use of non-OEM parts in vehicle repairs. The case highlighted the risks associated with using substandard parts and the insurance company’s role in influencing repair decisions. The Illinois Supreme Court initially awarded the plaintiffs $1.18 billion, although the decision was later overturned. Nonetheless, it underscores the legal complexities surrounding insurance company practices, repair standards, and part selections.
A Real-Life Example: The Human Cost of Insurance Company Interference
To illustrate the human side of this issue, let me share a story. I once had a client—a grown man, who worked in construction—who sat in my office with tears streaming down his face. He needed his truck to get to work, which contained his tools, and couldn’t afford to lose his job. The insurance company had made the process so difficult for the non-DRP, dealership collision center handling his repairs, that the work had been delayed for weeks. He was stuck between a rock and a hard place, and the emotional toll was evident. He was desperate for a solution. Often times this leads to consumers making decision out of pure survival needs, creating additional challenges.
This is just one example of how the relationship between insurance companies and repair shops can lead to unnecessary stress and hardship for consumers. It underscores the importance of understanding your rights and choosing a repair facility that adheres to OEM guidelines.
Conclusion
The process of repairing a vehicle after an accident is far more complex than it may seem. Insurance companies often prioritize cutting costs over ensuring quality repairs, leaving consumers with vehicles that may not perform as expected in future accidents. Understanding your rights, choosing a repair facility that follows OEM guidelines, and being aware of the potential pitfalls of insurance company involvement are crucial steps in protecting yourself and ensuring that your vehicle is repaired to the highest standard.
In summary, while it’s reasonable to expect expert repairs from a well-known collision repair facility, the reality is that insurance company involvement can significantly compromise the quality and safety of those repairs. By understanding the dynamics between repair shops and insurers, and by taking control of the repair authorization process, you can better protect yourself and ensure that your vehicle is repaired correctly and safely.
