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SCRS Members Identify Disturbing Trends Regarding Insurer Abuse

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The Society of Collision Repair Specialists (SCRS) has been monitoring for some time the actions of a number of insurance companies and how their processes and procedures have affected collision repairers and, ultimately, their customers. During this review, SCRS determined that it was in its membership’s best interest to offer its position on questionable business conduct by those insurance companies guilty of these actions. The position is based on the results of a survey recently commissioned by the SCRS.

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The position is that SCRS cannot accept any actions from any segment of the industry that exhibit blatant disregard for its members. In its opinion, blatant disregard includes, but is not limited to, the following:

Deceptive referral practices of a malicious nature. Using language and word tracks that cause the consumer to question the quality, services and integrity of any repairer who’s not part of an insurer’s direct-repair program (DRP) or “referral” program.

• Disparaging statements. It has been reported to SCRS that some insurance company employees are making disparaging remarks to consumers in an effort to “steer” them to one of their DRP, referral or concierge-type shops. The SCRS believes this is in clear violation of the laws in place in many states that prohibit an insurer from steering customers to a specific repair facility.

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• Secondary steering tactics. It has also been reported that there are various field appraisers who often write a repair estimate that’s as low as 50 percent of what the repair shop has written. When consumers are given this information, their immediate reaction is, “What do you expect me to do with this, it’s only half of what XXX shop needs to fix my car?” Apparently, some of those field appraisers readily respond with, “If you go to XXX shop (their company DRP, referral or concierge-type shop), they can fix your car for our figure.” In many cases, the end cost is equal to or greater than the original shop’s estimate.

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• Vague and ambiguous remarks about repair “delays.” It’s reported that various insurance company employees have time and again insinuated or, worse, stated to a consumer that the repairs will take longer if they aren’t done at one of their DRP, referral or concierge-type shops.

• Refusal to reimburse for proper repairs. Certain field appraisers have apparently developed their own terminology, as well as redefined what a “proper” repair is. As it relates to an area of the vehicle that may not be visible without removing a trim panel or floor covering, it seems as though various field appraisers have made the determination that finish work on a “non-appearance panel” isn’t necessary. In SCRS’s opinion, this goes firmly against the contract language, which calls for the repairs to be made to “pre-accident function and appearance.”

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• Misleading service offerings or insinuations in the name of consumer service. There are a number of insurance programs in which the consumer gets duped into using the insurer’s DRP, referral or concierge-type program, which leaves the consumer with little to no information as to where the vehicle will be repaired, what the amount of the repairs will be, the methodology of the repair, etc. The SCRS believes that the owner is left with little or no say in any of these important decisions. The SCRS is gravely concerned that, through all of their marketing efforts, some insurers have convinced state insurance departments or regulatory bodies that this very process brings value to the consumer when, in reality, the recent surveys by SCRS as well as J.D. Power and Associates indicate otherwise.

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• Database manipulation and representing the database as “market acceptable processes.” The manipulation of the databases used in the various estimating guides is a practice SCRS believes cannot be tolerated. According to the SCRS, at least one insurer has convinced one information provider to alter its system to de-fault to an arbitrary figure of 50 percent of the actual refinish time required for a proper repair. The SCRS believes this is all without merit and goes firmly against the vast research and posted times developed through time studies and other means by the information system provider.

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Intimidation techniques and threats to keep DRP, referral or concierge-type shop operators from discussing the details of the various programs. The SCRs has received reports that some insurers seemingly intimidate their participating shops from discussing the values and faults of the programs through the fear of retribution. Repairers have stated that they fear losing work by discussing these unfair practices surrounding the questionable repair methods used by many of the inexperienced appraisers and adjusters handling these claims.

• Utilizing inexperienced claims staff to negotiate repair hours and methods based on a consumer’s loss. The SCRS has received reports that there are insurers employing a significant number of inexperienced claims personnel, which causes serious delays and issues when they and collision repairers try to negotiate a fair claim settlement. The tactics employed by these inexperienced staff members cause production delays for the repairer, parts issues and overall increased cycle time, which lowers customer satisfaction due to obvious missed or ignored items.

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• Denigrating a collision repairer because of the lack of a DRP, referral or concierge-type program relationship. Based on SCRS’s discussions with numerous repair facilities, some insurance personnel employ tactics and word tracks to leave doubt in a consumer’s mind as to the quality of the shop when it isn’t a participant in one of their DRP, referral or concierge-type programs. These word tracks include such verbiage as, “Due to your decision to take your car elsewhere from our network, you may encounter delays and incur additional repair costs or rental car expense that we will not be responsible for.”

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• Prey on the consumer’s lack of knowledge of their rights or repair expectations to gain leverage against the informed repairer. The vast majority of consumers don’t have the skills or experience needed to make sound collision repair decisions without guidance and input. Unfortunately, it appears as though some insurers take this situation and use it in their favor. The end result is a consumer who’s coerced into a situation that may not be in his or her best interest. In fact, if repairs are done in a substandard way, the consumer is often at a loss as to how to rectify the situation.

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Unnecessary delays for estimate completion and authorization. The SCRS has received reports that some insurers are  having their adjuster or appraisers come out and inspect the vehicle and write an estimate. In many cases, it appears as though those adjusters have no authority (or possibly don’t have the skills needed) to write an accurate or complete estimate.  Shops then must go through several layers of management in order to get simple required procedures that are missed on the estimate. SCRS’s members also indicated that, to completely fix the vehicle, they must write many supplemental increases because the original insurer’s estimate was grossly incomplete.

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Refusal to negotiate in good faith. The SCRS says that some insurers have been noted to arbitrarily state that repair market conditions prohibit reimbursement for certain procedures, labor rates and other required work (without a proven valid survey performed in those market areas). This appears to be a negotiation tactic to not properly reimburse the repairer for the required work. In particular, some insurers, the SCRS says, grossly disregard the vehicle manufacturers’ repair procedures and recommendations and, in fact, have frequently flat out refused to reimburse for those procedures.

In conclusion, it’s both a belief and concern of SCRS that there are some insurers (or their representatives) that have utilized word tracks and their size to influence or intimidate consumers into using their programs or to follow their misleading direction. The SCRS views it as unfortunate that these insurers seemingly have no consideration for ensuring that their customers receive quality, cost- effective repairs and instead convince unsuspecting consumers to accept what has been proven in many cases to be inferior repairs driven by price-only decisions. In fact, the SCRS claims, there have been a number of instances where insurers have purchased a “repaired” vehicle back from a consumer in order to minimize the issues that improper repairs (from their recommended shops) and the refusal to pay for needed operations had seemingly caused.

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The SCRS fully supports those repairers who have invested in the efforts of bringing perpetrators to task for their unacceptable tactics and gross disregard for proper repairs. It fully supports any repairer who stands up to what he or she  believes was an unjust act committed against his or her shop, such as what Greg Coccaro and North State Custom of Bedford Hills, N.Y., allege in their lawsuit against Progressive Insurance Company.

In the SCRS’s opinion, it’s totally unacceptable for any industry segment to use “bully” tactics for its own gain. In the SCRS’s opinion, it’s the obligation of all insurance companies to make their insureds as well as their claimants whole after such a loss. The SCRS believes that this means that they must fully compensate those directly involved to ensure that a cost-effective, high-quality and timely repair is performed.

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The SCRS says it’s extremely disappointed in the tactics of a select few and fully recognizes that there are a large number of insurers and repairers alike who work together each day to ensure that high-quality, timely and cost-effective repairs are performed.

The SCRS is asking any repairer who feels an insurer is employing any of the tactics outlined above to 1) put a stop to it and 2) report it to the SCRS. Contact Executive Director Dan Risley at (708) 598-3384 or e-mail [email protected].

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