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Storage Issues with an Insurer

An insurer is refusing to pay storage charges on a vehicle they let sit in my shop while ignoring my requests for a status update. What can I do?


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.

I recently had an issue with an insurance company about storage. A vehicle that was not safe to drive was dropped off by the customer, and she signed an authorization and direction to pay at that time and had a claim number and adjuster information. It was pretty obvious that the vehicle was a total loss. I contacted the insurance company to let them know the vehicle was at the shop, and they said they would be out to look at it. I called them every few days to see when they would be out, yet the vehicle sat in storage for weeks. After three weeks, a claims investigator came to look at it but had no answers for me on claim status. Two more weeks went by, and the insurance company called to let me know that they would not be covering the loss. They also told me that, since I didn’t let the customer know of the storage charges, those charges and related charges (which amounted to $1,700) were neither their customer’s nor their responsibility. They then told the customer to seek legal counsel. Since this is the first time I’ve ever had this issue, do you have any insight?
First, let me say that I’m not an attorney nor a licensed claims adjuster (any longer), and as such cannot and do not provide legal counsel.

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With that said, not knowing what state you’re in and the specific laws and regulations governing automotive repair within that state, it’s impossible for me to determine what your specific rights and obligations are.
The first thing I do with all of our ADE Repairer Consulting/Coaching clients is review, modify or develop a sound repair authorization/contract and get it in place. The repairer’s contract will often mirror state laws and regulations to avoid any potential issues. A thorough repair authorization/contract will address many issues including but not limited to storage, the cost of such and the customer’s acknowledgement of the charge, the amounts, the duration and that it is the “customer’s” financial responsibility. When executed properly, the repair contract actually empowers the customer to seek and attain the insurer’s involvement and payment for all such loss-related costs.
On another note, it’s important to understand that insurers often make statements in the hopes and anticipation that repairers don’t know any better and believe everything they tell them as if it’s gospel. I’ve found that this happens quite often across the country. This is where the old adage, "Ignorance of the law is no excuse,” applies. And then there is also my favorite quote: “Never take advice on how to collect money from those who owe it to you!”
As in most any business and profession, collision repairers need to fully understand their local and state laws pertaining to their business/industry as well as have a sound understanding of the insurer’s rights and obligations within your state. You don’t have to be an attorney, but it will surely be to your benefit to know a good attorney and a source such as an industry consultant to help you gain the knowledge and understanding to protect you, your business and your customer.
This storage charge situation often occurs when the insurer has failed to act in a timely manner, faces a substantial billing, is concerned about their manager’s scrutiny and seeks creative ways to avoid accountability by “making it go away,” however possible.
If you contact me at [email protected] or (813) 657-6705, I would be happy to discuss how you may be able to not only collect your rightfully due storage but also how to prevent similar issues in the future while increasing your company’s profitability and limiting associated liabilities. In the interim, if I were you, I would not release the vehicle until arrangements for full payment are arranged.

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