Dealing With Mr. "I-Can't-Pay-My-Deductible" - BodyShop Business

Dealing With Mr. “I-Can’t-Pay-My-Deductible”

It may be tempting to do your customers a favor when they threaten to take their business elsewhere. But when you see how this adversely affects the industry and your own shop, you'll realize that you're a moron if you allow some whiner with a eductible problem to peer pressure you.

About 10 or 15 years ago, this large young man walked into the shop where I was working. He was covered in gold – large glittering rings on every finger, gold bracelets and several gold necklaces. He said to me, “Hey, John. Long time, no see. How long have you been working here?”

I recognized him from another shop I’d worked at several years before. The regular appraiser for my area must have been on vacation and “Goldfinger” here was covering for him.

I said hi, and the next thing out of his mouth was, “How’s your boss? Will he deal?”

I knew exactly what he was talking about. He was about the most crooked appraiser I’d ever met. With all the gold and gems beaming from his body, he was so blatant you just knew he was going to get caught someday and end up in prison.

I snickered back, “Oh yeah, he’ll deal.”

I worked for a guy who wasn’t too bright. And to make it worse, he thought everyone was stupider him. In the years I worked at that place, I’d seen more cash pass hands, more tax codes violated and more laws broken. You name it, and I saw it. I’d even seen the granddaddy of all payoffs – an illegal gun silencer traded for a very fat estimate.

Those appraisers are all gone now. They either got caught, fired, died or cleaned up their act. And we wonder why our industry has a bad image.

With A Little Help From My “Friends”
I’m sure dirty dealings go on every day in this country, but our industry has definitely cleaned itself up. The crooks are being weeded out, and the bad shops are drying up and blowing away. But that’s the high-profile stuff. Those practices are ending because they’re highly illegal and draw lots of attention. The insurance companies have focused on it. The media have focused on it. So now the consumer has become interested in the way our industry operates. Consumers don’t want to deal with a bunch of crooks. And as hard as we’ve tried to polish our image, the average consumer still doesn’t trust the auto repair industry.

That is, until they get in a wreck and realize that big deductible they chose to keep their insurance premium low is now going to devour a big chunk of their savings. Now it’s, “Hello Mr. Body Repairman sir, buddy, pal, comrade. It’s just us against this evil insurance company. Help me bury my $500 deductible. Everyone does it. It’s how the business works. It’s the American way, isn’t it?”

Anyone who catches himself feeling a little compassion for Mr. I-Can’t-Pay-My-Deductible should hang a sign on the shop door that says, “Gone fishin’,” lock the keys in the shop and never come back. Oh, and take the whiner with the deductible problem with you.

Burying deductibles is one of the most vile acts a body shop owner or manager can do. It undermines absolutely everything we, as an industry, have worked so hard for. We moan and groan about not being paid enough for what we do. We whine about labor rates and tightwad insurance companies. We join coalitions, associations and organizations and hire lobbyists, all in the spirit of dignifying our industry and fattening our wallets. Then things get a little lean, some putz walks through the door and threatens to take his business elsewhere unless we bury the deductible, and some of us cave! Why is that? Are we hypocrites or just plain stupid?

The deductible has an important purpose. It’s a control measure. Our customers have signed an agreement with their insurance companies promising to pay the initial $250, $500 or $1,000 of any claim they make. Without this deductible, the insured would be claiming every little scuff or scratch, and our insurance premiums would be much higher. Customers have saved money every time they paid their premiums, since they opted for a higher deductible. Why should we reward them a second time by allowing them to avoid paying it? It’s not our problem. We didn’t wreck their car. We didn’t lose all their money last month at the casino. We didn’t call in sick every Monday this past month because we were still hung over from Saturday night. And we sure as hell didn’t get into this business to become a charity organization.

Not that there’s anything wrong with charity. Not that there’s anything wrong with helping someone when he really needs it. But to buckle to the pressure of losing a job to the guy down the street because he hustled your customer into thinking she’ll get more than her money’s worth at his repair shop is self-defeating.

There’s nothing wrong with giving the customer some money back or fixing his car for less than the insurance company paid … or less than your estimate even. In fact, it’s one of the best things that can happen between you and that customer. It’s a matter of semantics. And conscience. It’s perfectly OK to save a customer’s deductible. Save the deductible if you can, but just don’t bury it.

Saving someone’s deductible is a passive action. Burying a deductible is an active action – an illegal one at that. If someone comes to your shop for an estimate and asks you to pad the estimate so you can fix his car properly without having him dish out 500 bucks of his own money, you’re actively defrauding the insurance company. Laws vary from state to state, so when I talk about law and what’s right and wrong, I’m speaking about natural law, or that which leaves us with a clear conscience.

Someone whose vehicle has been damaged is entitled to be compensated for those damages – fairly compensated. What that person does with the insurance money is his business. (Unless, of course, the bank has a lien on the vehicle. Then the person doesn’t really own it.) Look out on the streets and you’ll see a lot of people driving around with their vacations or big-screen televisions. They drive around with damaged vehicles since they’d rather spend their insurance claim money on something for which it wasn’t intended. That’s OK, as long as that person didn’t get you to write an appraisal that was anything less than honest.

A Day in the Life
We’ve all been hustled by some idiot out to make a buck. I work in a highline dealership and seldom run into customers trying to cheat the insurance company or not pay their deductibles. This isn’t to say that rich people are any more honest than the rest of us. They just don’t have time to play games. They want their cars fixed quickly and they want them fixed right. Money isn’t usually the biggest concern when they wreck their car. So I tend to be very trusting – and seldom suspicious – of my customers’ intentions. But, boy, did I get it good a few months ago.

Some guy stopped in with a fairly new Saab 9000 wrecked in the front from hitting a deer. He was adamant about replacing everything and repairing nothing. I agreed because of the nature of the damage and the age of the vehicle. Plus, I guarantee my work for as long as my customers own their cars. His insurance company was Allstate, and they’re one of the stingiest companies in my area. So I wrote a rather healthy estimate to give the appraiser a chance to graciously beat me down and ensure we’d both be happy. And I insisted the customer not take his car to the drive-in claims center because, well, that’s just asking for trouble.

The appraiser met the customer at my shop, and he was a really nervous fellow. I could tell he’d gotten browbeaten by his superiors, and his estimates reflected it. He’d write one hour for a one-hour dent. He was even afraid to play by the insurance company rules. Anyway, after about 45 minutes of haggling – and the customer egging me on the whole time – I finally convinced the appraiser to pay for all new parts and all the other goodies because he knew our shop did everything we got paid to do.

As the appraiser went out to his car to print the estimate and complete the 147 pages of paperwork associated with the claim (and we wonder why it takes so long to get supplements taken care of), the customer paced around my office and I patted myself on the back for winning another battle with Allstate. The appraiser came back into my office, gave us each a copy of the appraisal, wrote the customer a check and was on his way to torture someone else. My office door hadn’t hit the jamb yet, and the Saab owner stops his pacing in mid-stride, looks me square in the eye and asks, “What can we do about my deductible?”

I was dumbfounded! This guy was good. He’d fooled the appraiser and me. After all, he had a new expensive vehicle. He wasn’t the type. I’d spent at least an hour and a half with him between writing my estimate and haggling with the appraiser. I even gave my parts department a parts list and had them check what was in stock and what had to be ordered.

I gave the guy the same look he was giving me and told him, “Not a thing. That would be against the law, and I’m having no part of it.”

I’d been asked to bury deductibles before. But customers almost always agreed to pay it when I explained how the world really spun. This guy gave me a disgusted look and said, “Well, don’t order any parts until you hear from me. I have to talk to my wife.”

Yeah, right. I called my parts department and told them to keep that list of parts handy because some other shop would probably be calling within the next day or so to place the same order. And I told them to let me know which shop it was, too.

Sure enough, two days later, one of the parts guys called and told me another shop had ordered the same parts. The first thing I did was call the appraiser and tell him that we’d been had and that he should go to where the car was now and reinspect it. He was quite interested.

A few days later, one of the bodymen who worked at this other shop stopped by to say hi. I hadn’t seen him in years and wondered what he was doing in my office. He told me he was returning a part some guy decided he didn’t want replaced on his new Saab. I laughed and told him the whole story. I told him to tell his boss exactly how much the owner of that Saab really got paid for those repairs. Apparently, they were straightening everything on the car. The Saab owner never even told them an insurance company was involved. He said he was paying out of his own pocket and wanted his car fixed as inexpensively as possible.

That wasn’t the end of it. Now this is what I call “cahones grande.” The other shop discovered the bottom of the air box was broken. The Saab owner didn’t want to pay for it. He wanted the owner of the other shop to call Allstate for a supplement! What an idiot!

Meanwhile, I no longer felt like one. I’d held my ground and lost a $6,000 repair, but I got a lot of satisfaction from it. I didn’t buckle under the pressure of losing work to another shop. As far as I was concerned, the other shop was the loser. They had to deal with this jerk and didn’t make much money doing it. On top of that, there was a half-baked repair out there with their name on it. And you can bet this guy was telling all his friends how bad the work was. Of course, he’d never tell them he got it done for nearly nothing.

Had I fixed this moron’s car, I would’ve put my reputation on the line for a few bucks. A $50,000 job wouldn’t be worth that. I would’ve been helping this clown break the law by defrauding the insurance company, and I would’ve been risking the whole business doing it.

Getting Better
Then there’s the other side of things. Not too long after the greedy guy with the Saab, some woman with a ’95 Volvo stopped by for an estimate. Someone had scraped the side of her car. Of course, the first thing I asked was if any insurance company had looked at the car yet. Some people aren’t so quick to tell us such things. They have these delusions that somehow the body shop estimate will be less than the insurance appraisal and they’ll be able to travel Europe on the difference. This kind of thing happens all the time, right? Well, it did that day.

I don’t know what the appraiser had to drink the night before, but his senses were still blurred. Obliterated was more like it, because he overwrote this thing to the point of embarrassment. The car did have a pretty good scrape from bumper to bumper, but it was easily repaired. I didn’t recognize the name of the appraiser who wrote the estimate. The woman worked about 30 miles away, and someone I didn’t know looked at her car. He’d paid for a new quarter, two new door skins and a fender. The only parts it really needed were the fender and a few moldings.

I told the woman I wouldn’t only fix her car, but I would do it for less than the estimate, minus her deductible. I’d save her deductible and then some. To say the least, she was very happy. She brought the car back later that afternoon, left it with me and we got started on it.

The first thing I did was write my own estimate. I wrote it with a very blunt pencil … to the point where I was feeling queasy from guilt. But hey, it was all repair time, all judgment time. Three days later, I called the woman and told her the car was ready. When she saw her bill, she almost squealed. Not only did I save her $500 deductible, but she was also going to pocket almost another $1,000. She asked me what she should do. “Should I give it back to the insurance company?”

How often would you hear that?

I don’t know how her conscience was doing at that moment, but mine was fine. I’d made a killing on the repair, and she got a pocket full of money back. As far as I was concerned, no one broke any laws or even did anything immoral. I gave her a copy of my estimate detailing exactly how we repaired the car. My invoice declared that I’d repaired the vehicle by my estimate.

I’d saved this woman’s deductible. She didn’t ask me to bury it. No one was misled. An appraiser just had a really bad day or was really mad at his boss. And one of the results was a high estimate. It’s not as if this woman found someone else’s money on the street and kept it. It was her money! She’d paid all those premiums for years, and she was compensated for her loss. Over-compensated yes, but that’s what the insurance company thought she deserved.

Many times my customers walk away spending less than they expected or less than the insurance company had paid them. There’s nothing wrong with that. Now if I kept that extra money because, after all, I could probably get away with it, that would be wrong. Saving all or part of someone’s deductible during the course of honest business, while putting a customer’s car back to pre-accident condition, is a great and beautiful thing. You’re a hero – an autobody god.

Burying Yourself
Burying someone’s deductible by writing a dishonest estimate is despicable. It’s a disgrace not only to the industry, but also to yourself. Misleading a customer into thinking you can repair his car as well as your competitor, but for $500 less – when you know you’re going to cut corners to make a profit – is much worse.

With the former, you cheat the insurer and gain little or nothing. The customer is the only winner if you fix his car properly. With the latter, everyone loses. The insurance company has been cheated and the customer is misled, probably getting less than he paid for and just what he deserved.

But the real losers are the shop owner and our industry. The shop owner makes little, if any, profit, and at the same time, risks his reputation … and jail time, while his competitor has been screwed out of legitimate business. But the industry suffers the most – by having those negative stereotypes enforced while, at the same time, artificially deflating the value of our services, our labor rates, our livelihoods and, worst of all, our honor.

Writer John Shortell is body shop manager at Secor’s Collision Technology in New London, Conn. He’s been in the collision industry for 20 years and has developed computer software for body shop scheduling called BodyShop Schedule Pro.

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