In their never-ending quest to steer repair work, insurance companies have devised some ingenuous - often unethical and sometimes illegal - scare tactics and methods to convince consumers to have their cars repaired at one of the insurer's direct-repair facilities.
But this latest ploy isn't so much about scaring consumers into submission. Instead, they're treated to a reward if they listen.
The trick, it would seem, is on you.
The premise is simple: The best way to a consumer's heart is through his wallet. Not a completely untrue concept.
Apparently it's a concept the Hartford has adopted with vigor. Shop owners across the country report that the Hartford is knocking $100 off their insureds' deductibles if they take their vehicles to one of Hartford's preferred shops.
As if that weren't enough, some of the preferred shops also waive part of the consumer's deductible - and throw in freebies like an oil change, floor mats, rental cars and TVs.
What's next? The consumer needs a place to put that new TV so why not give him a free house, too? At this rate, shops will eventually be paying consumers to repair their vehicles.
Stop the insanity. Undercutting the competition isn't the answer. It's short-term thinking that, long term, damages the industry (and the shop). Not to mention, what are these shops doing behind the scenes that enables them to give away literally hundreds of dollars yet still make a profit?
But this lowballing and lack of unity among repairers is a whole separate issue. Just let me say this: The willingness to throw your competition under the bus gives the insurance industry the upper hand and creates an atmosphere ripe for manipulation.
The manipulation of both shop owners and consumers.
Which brings us back to the issue at hand - insurers steering consumers by offering to waive some or all of their deductible.
The question is, do these "deductible deals" cross the line?
Says a Kansas shop owner: "My husband was giving a customer a ride home when she mentioned that her insurer offered to pay half her deductible if she took her car to a shop they recommended. She declined, saying she was more comfortable taking her car to a shop she knew and trusted. Is this offer legal?"
I wish I could say it wasn't, but it all depends - on your state's laws (and how they're written and interpreted). For example, does your state have an anti-steering statute?
A good way to familiarize yourself with your state laws - without spending your life savings - is to have your local association fund a comprehensive research project performed by a local attorney. It would have to be updated every few years, but at least you and the other members would know what's out there - and what isn't.
What if there aren't any state laws that make waiving deductibles illegal?
"My gut instinct is that the deductible is a term in the insurance policy for the insurer's benefit and they can waive it if they want," says Chicago attorney Patrick McGuire, who represents the interests of shop owners across the country. "I think you'd be hard pressed to make a compelling argument that it has some anti-consumer effect."
What about tortious interference?
"I don't think it's illegal to try to encourage a consumer to go to a particular shop as long as it's all based on the benefit of going to that shop, as opposed to what hazards will befall the consumer if he stays at the shop he's at," says McGuire. "If the insurer tries to disparage the other shop (claiming they don't do good work, they charge for parts they don't install, etc.) in an effort to get the consumer to go to a shop they want them to go to, that's where you start getting into actionable tortious interference."
Bottom line? Insurance companies are willing to waive a consumer's deductible because some shop, somewhere, is cutting them a deal.
"Shops own worst enemy is their ignorant competitor," says McGuire. "They run down the rates and commit fraud. There's no unity. Every industry competes but still has enough sense to say there are a bunch of issues we have in common so let's learn about those. There's nothing wrong with that. That's what businesses in the same industry are supposed to do."
Georgina K. Carson, Editor