Ask the Expert: Why Do Insurers Do What They Do?
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Ask the Expert: Why Do Insurers Do What They Do?

As service levels from auto insurers deteriorate, it’s up to the independent, quality-oriented repairer to encourage a positive change in behavior.


Barrett has authored numerous industry trade journal/magazine articles, including several cover stories for BodyShop Business. Having grown up in a family-owned collision repair business and owner/operator of two successful collision repair facilities, his ongoing efforts as industry speaker and repairer coach-consultant are geared toward educating professionals and consumers to achieve equally successful resolutions to automotive-related property damage issues. Such issues include proper and thorough repair, reasonable repair profitability for repairers as well as equitable claim settlements for both claimants and the responsible/paying parties. ADE offers numerous professional services nationwide.

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I’ve noticed lately that the service our customers are receiving from insurers has gotten poorer with less concern by insurers for customer satisfaction. The delays in inspections and denials and/or underpayments of recommended processes have increased. This has gotten increasingly worse since we removed ourselves from DRPs. One would think they would try to earn the customer’s trust rather than aggravate and run them off!

We’ve received increasing complaints of customer frustration and dissatisfaction, especially when the consumer declines to take their damaged vehicle to an insurer’s recommended repairer.

One would think with today’s emphasis on customer satisfaction and immense competition that insurers would be vying to earn the trust and confidence of the consumer. Unfortunately, this has not been the case, and the only reasons for this behavior I can think of are:

  • Consumers are receiving less than adequate service from the insurer in a concerted effort to punish them (and the shop) for not participating in the insurer’s DRP. Insurers think long-term, and they know that if they can get away with it long enough, their efforts will begin to change consumer and repairer behavior.
  • The insurer’s goal appears to be to teach the consumer a lesson to ensure that the next time they or someone they have influence over will choose to go to a DRP provider.
  • It’s well known that insurers gain added discounts and concessions from their DRP service providers. Furthermore, participating shops are often encouraged to bypass recommended processes and use “alternative” parts. Most often, these DRP shops are encouraged to not inform the consumer other than providing mandated notations within an estimate the average consumer fails to decipher and/or understand.
  • If the majority of high volume-low value insurers conduct business in this manner, the pool of customers virtually remains the same. As a customer becomes disgruntled with one high-volume low-value insurer, they may stay or go to the next high-volume low-value carrier who promises to save them money and so on. “Insurance” is like a parachute: Its quality and performance is undetermined until it’s needed most!


It appears that over the past several years, insurers have become increasingly brazen in their efforts to steer customers to their preferred repairers and even moreso in their activities to punish those who refuse. This is due to the lack of awareness and oversight by state and governmental agencies that are responsible for governing insurers’ conduct and practices. Like a child taking cookies from the cookie jar, this lack of oversight and accountability has encouraged many insurers to step up their efforts and become more egregious and overzealous in their claim cost containment efforts.


The failure of many consumers and repairers to report such activities to the appropriate governing bodies leaves these state and federal agencies with little historical data to support the few who do make complaints. In speaking with state insurance commissioners and others at the state level, I hear that if they had more complaints they would investigate them, but they have few and see them as occasional rather than as a pattern of insurer conduct. Of course, this provides no deterrent for an insurer to change their behavior and likely encourages more of the same (take more cookies).

The following is a quote from a customer at one of my coaching/consulting client’s shops treatment and sent them the following email: “You stated [insurer] is not going to pay for the $1,022.33 discrepancy to have my vehicle repaired at the shop of my choice. You also stated, ‘This is what happens when you choose to go outside the preferred shops.’”


Customer Education

The solution is for you and others to inform your customers as to the reason for the insurer’s lack of service and encourage them to report their complaints with their state agencies so that this information can be collected. Only when enough cases are filed and a pattern of conduct is established will the governing agencies investigate. And even then, there is no guarantee a remedy will be sought.

Ultimately, it will be up to the independent, quality-oriented repairer to develop internal policies/procedures to properly and effectively inform and edify their customers and community members to help bring such issues to light and encourage a positive change in behaviors of all involved. There are methods to do this, and it starts with properly branding/marketing your company within your marketplace. Note: Being “the only one” is not necessarily a bad thing!

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