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Scare Tactics

Adjusters often use the “steering” phrases.


Insurance adjusters say the darndest things.

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When faced with a claimant who wants to take his car to a shop that’s not in the insurer’s direct-repair network, adjusters often use the following “steering” phrases:

  • “That shop’s hard to work with.”
  • “The repairs won’t be guaranteed.”
  • “You’ll have to pay the difference.”
  • “Claims take longer if you use them.”

Although these phrases have proven effective in convincing many consumers to have their vehicles repaired wherever the insurer wants, one Allied/Nationwide adjuster apparently decided that he wanted to do something original — so he starting using a steering phrase all his own:


* “They run a meth lab in the back.”

Yep. This adjustor told a claimant that she didn’t want to go to the shop she’d chosen because the owner was a drug dealer.

Unfortunately for the adjuster, this claimant not only knew the shop owner (they’d gone to high school together) but the claimant was married to a lawyer.

The adjuster later confessed to making the “meth lab” comment eight or nine times to steer business from that particular shop. Long story short: He’s no longer employed by Allied/Nationwide.*

It’s a shame that most adjusters aren’t this stupid. In fact, they’re anything but. Even in states with anti-steering legislation, steering is still a serious problem.


“Insurers are experts at getting around state laws,” says collision industry lobbyist Mike Causey. “They may not ‘directly’ violate the laws, but they certainly violate the intent of the laws.”

As this happens, however, repairers and collision industry lobbyists are becoming experts at how to draft better anti-steering legislation. For example, it’s not enough for an anti-steering law to prohibit insurers from using dis-incentives to discourage claimants from using a particular repair facility. Why? Because insurers can still offer incentives (cash, lowering or waving of deductibles) to encourage the use of a particular repair facility.

“Just the other day, a customer of ours had his 2003 Volvo SUV in for collision repairs,” says a Washington shop owner. “He told us the adjuster called him and offered him $100 to take it to another facility. I wonder what the adjuster would’ve gotten out of it?”


To address the loopholes insurers always seem to find, Colorado recently passed House Bill 1253, which, among other things, prohibits insurers from: requiring appraisals be done at a specific shop, using dis-incentives to discourage claimants from going to the shop of their choice, using incentives to encourage claimants to go to a particular shop and accepting a referral fee or compensation for referring a claimant to a shop. Written complaints to the insurance commissioner by claimants or repair facilities are encouraged when a violation is suspected.

It sounds good, but it doesn’t accomplish a darn thing if the Colorado insurance commissioner doesn’t enforce the law. Hopefully history isn’t any indication.


Some insurance commissioners and state departments of insurance (DOIs) are famous (infamous even) for being unresponsive when contacted about suspected violations committed by insurers.

“Regulation is a joke in most places,” says one Pennsylvania repairer. “The insurers own the DOIs because it’s that ’50 monkeys’ thing. I live in a state with a useless insurance department.”

He’s not alone. I hear from frustrated repairers almost daily who’ve documented suspected violations and sent them to their state insurance commissioner — to no avail.

Most recently, a Brunswick, Ga., shop owner told me Allstate has stopped paying the area’s prevailing rate of $38 per hour — a rate that’s been in effect two years. Allstate now pays $36 because that’s what its three area DRP shops charge (in exchange for volume). So, if a claimant wants to use an area shop that’s not on Allstate’s DRP, he’s told he’ll have to pay the difference.


Hoping for help, this shop owner sent a letter to Georgia’s insurance commissioner. The commissioner’s office then sent a letter to Allstate asking for a response, waited for the response and when Allstate claimed innocence (saying it pays “what’s reasonable and customary”), closed the file. End of investigation (if you can even call it that).

I’m not advocating that you give up on your state DOI. What I am advocating is that you battle steering on more than one front. For example, some repairers are also educating gutsy consumers who aren’t afraid to take insurers to court. In Massachusetts, District Court Judge Paul V. Buckley Jr. recently ruled that Arbella Mutual Insurance Company must pay its insured, Diane Rice, the $602.80 it had refused to pay for labor charges. The judge decided the insurer failed to prove that the rate charged by the non-DRP shop (Factory Collision and Restoration of Weymouth, Mass.) was unreasonable and also that the insured’s policy didn’t make her aware that she’d be responsible for charges in excess of $32 per hour. Rice credits Factory Collision owner Rob DelGallo and the Massachusetts Auto Body Association (MABA) for helping her to understand her rights.


Score one for freedom of choice — and for shop owners in Massachusetts, who, according to this ruling, have the right to set their own labor rate, as long as it’s fair and reasonable, and aren’t required to accept only what an insurer’s willing to pay.

“Eternal vigilance is the answer,” says Causey about how all shops — non-DRP and DRP — are going to have to tirelessly battle steering to see results. Causey recommends that repairers stay current regarding legislation and consumer laws in their state (being active in a local association is a great way to do this) and then pass this information along to consumers. Repairers also need to be the watchdog of state laws. If you suspect a violation, document your complaint and send it certified mail to your state insurance commissioner and attorney general.


And, whatever you do, don’t give up.

It’s not a perfect world, life certainly isn’t always fair and the golden rule usually does apply: He who has the gold makes the rules.

But when repairers get informed, unified and focused on consumer rights, the rules can — and do — start to change.

Georgina K. Carson, Editor
[email protected]

*Rumor has it, he’s running a meth lab to make ends meet.

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