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What to Do When an Insurance Company Sends the Vehicle Title Instead of Paying Your Body Shop

Insurance companies abandoning cars (and their responsibilities) has been going on ever since insurance companies were first formed. This practice is not only considered unethical, it may also violate most state laws and regulations governing insurance practices. But there is a simple and effective solution.


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.

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Q: Our customer’s insurance company just called and advised that they were not going to take possession of a vehicle they deemed to be a total loss. Instead of paying our fees, they will be sending us the title. We don’t want the car, we want to be paid! What can we do?

A: This is not an isolated incident. Insurance companies abandoning cars (and their responsibilities) has been going on ever since insurance companies were first formed. This practice is not only considered unethical, it may also violate most state laws and regulations governing insurance practices. But there is a simple and effective solution.

Remember who you work for! While the customer may be king, they are also responsible for their property and for their conduct, as well as the conduct of their insurer.

Have a Contract

The first thing is that a repairer needs to have a well-crafted and thorough repair authorization/contract that clearly conveys all of the customer’s potential responsibilities and obligations. The second most important thing is to ensure that your customer has properly signed this contract.

Constructing a comprehensive repair authorization/contract is one of the very first tasks Auto Damage Experts (ADE) undertakes with each of its repairer coaching/consulting clients. ADE also helps clients learn and understand their state’s regulations and statutes spelling out the repairer’s responsibilities in automotive repairs, as well as the insurer’s regarding state-mandated claims handling and what are and are not proper practices. In many states, an insurer cannot merely abandon a vehicle to avoid paying charges. This may allow your customer certain legal rights to encourage the insurer to meet its responsibilities. Insurers may attempt this, only to capitulate when confronted. However, if they’re not confronted, they prevail in avoiding claims-related costs. This is not ethical, but it happens.


Quick Response

When a situation like this occurs, you should immediately contact your customer by certified mail, return receipt requested, advising them of the situation the insurer has placed them in and that, as your customer (as outlined in the signed repair contract), they will be ultimately responsible for any and all charges as well as any associated fees and costs. Such charges may include administrative efforts incurred for the disposal (sale) of their vehicle and legal fees and costs relating to collection efforts for any remaining unpaid amounts.

Repairers must keep in mind that although the insurer’s handling of the situation may not be right or even legal, you are not party to their policy. As such, you have no right to hold the insurer accountable and must look to your customer for payment of the services you rendered on their behalf.

No One Wants to Sue

No one wants to have to sue their customer, and insurers understand this full well…which is why some insurers may stoop to such conduct. It’s important that you offer to assist your customer in the matter, but you must be firm in your efforts to collect what is rightfully due. The legal action you may take against them is essentially the insurer’s fault. Thus, it should be conducted as non-adversarial litigation where you, the plaintiff, will work with and on behalf of your customer, the defendant, to help them get the insurer to step up to their financial responsibilities. Such issues will rarely go to trial, as the insurer generally will pay to avoid potential court-ordered sanctions and setting case precedents.


Trust me, when you tell the customer what the insurer has done and the cost they may be responsible for, they will likely resolve the matter with the insurer quickly to avoid having to pay the bill.

Lien Laws

Note: It’s important to be familiar with your state’s lien laws as they’re often time-sensitive, outlining specific actions repairers must adhere to in order to continue to charge for storage and not forfeit their rights. Such laws and regulations exist to protect the consumer as well as the repairer, and any deviation can be to the repairer’s detriment. Know these laws and develop internal policies and procedures to avoid procedural errors and possibly forfeiting any rights of recovery you may have.

The Bottom Line

Know who you work for and who is (and who is not) responsible to provide payment to your company for services provided them. Unless you’re repairing an insurer’s vehicle and it’s the insurer who has signed your repair authorization, insurers do not owe you. Your customer – the vehicle owner –does, and therefore only they can be looked to for full payment. Granted, your customer is no doubt expecting the insurer to provide payment, and rightfully so. However, they will have to take an active role in ensuring they do.


When the insurer fails to meet their obligation to the consumer, only the consumer has the legal right to seek recovery from the insurer…not the body shop.


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