Can an Insurer Change from One State's Labor Rate to Another State's on an Estimate? - BodyShop Business
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Can an Insurer Change from One State’s Labor Rate to Another State’s on an Estimate?

Can an insurance company change from the Rhode Island labor rate to the Massachusetts labor rate on an original estimate when they come out on my supplement in Massachusetts?

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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.

Can an insurance company change from the Rhode Island labor rate to the Massachusetts labor rate on an original estimate when they come out on my supplement in Massachusetts?

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While I’m no longer a claims adjuster, I believe the insurer can pay a lesser labor rate because if they elect to repair rather than replace, they owe the "cost of repair," which would be what it’s costing to get the vehicle repaired – nothing more, nothing less.

Conversely, if the insurer wrote their original estimate at a rate lower than what it actually cost to obtain a proper and thorough repair, they would owe the higher rate as long as the rates are reasonable and competitive in the marketplace and based upon the level of service and quality being provided.

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