Auto Insurance Claims: Who Owes Whom?

Auto Insurance Claims: Who Owes Whom?

Insurers don’t owe the repairer anything; insurers owe the vehicle owner, and the vehicle owner owes the repairer for the services rendered and received.

I read a lot of industry articles, and all too often I see comments on what insurance companies owe repairers. But one thing that’s important to remember is the simple fact that insurers don’t owe the repairer anything. Insurers owe the vehicle owner, and the vehicle owner owes the repairer for the services rendered and received. I understand that some direct repair program (DRP) arrangements place the repairer in a position of obligation to an insurer; however, this relationship should never shortchange the consumer.

A Repair Done Right

A repair is not done until it is done right. The word “quality” by itself is a subjective word, suggesting something is either excellent quality, poor quality or even questionable quality — and, of course, the many levels in between. Collision repairers have a professional duty to provide the highest quality repair possible, regardless of whether or not insurance is involved.

In my shops and in my current company, our corporate slogan is, “Where the Sign of a Good Repair … Is No Sign at All!” and we still take it seriously and use it as our goal. 

Writing Comprehensive Damage Assessments

In the past, even though we didn’t have the luxury of having written OEM-recommended and -required procedures, as quality-oriented repair professionals, we knew from our knowledge, experience and training — and from the vehicle itself — what processes and materials were needed to restore the original appearance and functionality of a damaged vehicle. And we wrote comprehensive damage/repair assessments that included each and every one of them. Our efforts were not only to restore the damaged vehicle, but we also wanted to restore our customers’ peace of mind and confidence in their once damaged and repaired vehicle.

It wasn’t that long ago that claims appraisers were looking at me and my staff as if we had three eyes. Why? Because we would list numerous processes in our assessments, such as remove and install (R&I) outer door handles, belt moldings and trim, inner trim panels, vapor barriers, back masking jambs, car-cover, hazardous material handling, color tint, color sand and buff to match original texture, and many others. Appraisers would not just tell us we were the “only ones” in the world who would write for such things — we were “the only ones in the universe.” Of course, today there are no such pushbacks, and insurance appraisers often write for such processes in their initial estimates. 

Reviewing Repair Assessments

Repairers are still failing to list many needed and recommended processes, such as pre-wash, pre-clean panels to be refinished/blended (i.e. removal of road tar, wax, paint sealants), mask openings (i.e. lights, trim, glass openings), road testing, etc.

Over the years, in my review of repair estimates for “right to appraisal” matters, post-repair inspections and diminished value claims, I’ve had the opportunity to review thousands of damage/repair assessments and continuously find procedures not listed — many of which were performed but not assessed or paid for as well as many processes that were not performed that should have been. One of the things I work on with my clients is to help them augment their repair assessments to include all parts, procedures and materials required to perform a proper and thorough repair and to best serve their customers and the collision repair industry. After all, Auto Damage Experts’ goal for all is to “Do the Right Things, in the Right Way, for the Right Reasons.”

Following manufacturer recommendations and mandates is not a suggested method of repair but strongly advised as the way a repair should be undertaken — and the only way to achieve the true level of a proper repair. Of course, the technician’s collective knowledge, skill and training should always be considered an extremely essential element in making proper repair decisions.

Are Free Estimates Worth the Price?

In reviewing my clients’ marketing activities, websites and signage, I often see the offer of “free estimates.” I too used to offer free estimates in my shops to compete with other shops in my market area who also offered them. We did this until we found good reasons for not doing this.

We took preparing estimates very seriously, so we spent a great deal of time performing the necessary inspection and research to ensure that every process, part and material needed to repair the damaged vehicle properly to its pre-loss condition to the best of reasonable human ability was listed and charged for. We studied the P-pages and kept up with changes in the estimating platforms to be as accurate and thorough as possible.

We tracked our “estimate to sale ratio” and, for years, had a particularly good “closing rate” of between 85% and 95%. Then, for no apparent reason, I began to see it decrease and “missed opportunities” increase. In conducting follow-up calls to those we didn’t close, I soon learned that another local shop was sending customers to us for our in-depth estimate with the promise that, if the customer submitted our estimate, that the shop would save him or her the deductible or offer a financial kickback/discount if they got the repair! 

I immediately changed our marketing ads, website and signage and began offering a free “no obligation consultation.” This provided us the opportunity to sell ourselves and offer the prospective customer our “comprehensive damage assessment services,” which we provided at a very reasonable fee. At the time, we charged $50 plus 3% of the estimated amount with the understanding that if they chose to have repairs done at our company, in their entirety, we would credit the cost of the service to their repair. We offered additional services at additional cost to perform limited dismantling to ascertain the full extent of damages if determined to be advantageous to the customer.

We found this to not only be a great service to customers but a great way to educate them on vehicle damage. This also prepared them for when an insurer failed to provide all necessary parts, procedures and materials — at which point we would inform them and offer the necessary information they needed to get their vehicles repaired properly and settle their claims. 

We found that those prospects who could not find value in the offerings and knowledge we shared were likely better customers for our competitors. After all, a quality repairer’s best customer is an educated one!

Eliminating free estimates raised our closing to nearly 97%, and those who wanted to cash out with an insurer and not get their vehicle repaired ended up with considerably more money than the insurer’s initial offering were very appreciative of our efforts and found the value of our service far exceeded the fee we assessed. They became cheerleaders for us and referred their family, friends and colleagues to our shop.


It is long past due for an overhaul in the collision repair industry. Those who have changed their business strategies and are thinking out of the box and conducting business the way they should are enjoying consistent profitability and growth … and so should you!

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