How can my shop build an authorization and go after an insurance company that refues to pay our door rates?
Question asked by Richard Bappert, Lil Rick’s Collision & Mechanical, Inc., Oklahoma City, Okla.
Thank you for your question. While I am not an attorney and cannot provide you legal advice, we do provide our consulting coaching/clients samples and recommendations on developing strong repair contracts and authorizations. These are intended to help repairers avoid unnecessary liabilities and empower and encourage their customers to understand the issues and be able to protect their own interests in receiving a proper and thorough repair with quality parts and materials.
It’s important to keep in mind that not all of your customers are seeking repairs under their policy. Many are seeking repairs against another party and have no insurance contract of which to hold the insurer accountable to when seeking recovery from their insured’s policy.
It’s important for repairers to continue to understand the following:
1. Insurers don’t owe repairers anything…they owe their insureds, either under liability (payment to others) or by policy contract (payment for the repair of covered collision- or comprehensive-related damage).
2. Insurers are savvy buyers that understand the collision industry better than most repairers and know how to leverage their power to get what they want: low-cost repairs. They know the repairers’ weaknesses and exploit them.
3. Insurers don’t owe you or your shop for your services…your customers do.
4. While you, as a professional, have an ethical and professional obligation to provide your customers with your best professional opinion for a proper and thorough repair, it is your customer who must seek recovery from the insurer, simply because the insurer doesn’t owe you so much as the time of day. You will be seeking payment from your customer because it’s their vehicle, and they’re the ones who owe you for your services.
5. Just like the Wizard of Oz, once you pull back the curtain and see that he’s just an old and weak man pulling on a bunch of cables and ropes while talking into a loud speaker, the fear and unknowing is no longer “all powerful.” Insurers have duties and liabilities just like any other business, and once you know what yours are and what theirs are, a lot of the mystery and fear both you and your customer have goes away.
There is no magic bullet or document that will enable you, as a mere service provider, to force an insurance company to do or pay anything…simply because you’re not repairing THEIR vehicle. As such, they (the insurers) don’t owe you anything. The insurers, on behalf of their insureds, owe their insureds for the repair or replacement value of the vehicle. It will be up to your customer to step up and assert their legal rights for a proper and thorough repair…or forfeit and lose those rights!
While you may be able to take an Assignment of Rights (AOR) or Power of Attorney (POA), in some states, repairers/consumers may not be able to recover legal fees and costs. Therefore, I don’t encourage repairers to become embroiled in protracted litigation on behalf of their customers. Unfortunately, some often do, generally due to the predatory practices of insurers trying to exert their will and put repairers in their place. Because this is a potential liability to a repairer, I would suggest you seek an attorney within your market who’s familiar with the laws and regulations governing your business (and the insurers’ business).
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