Why Do Bodyshops Accept Lower Estimates from Insurance Company?

[INSUREGEEK]

Thanks for the great response. This makes a lot of sense on all parts. I was going to say that the body shop can get more out of the insurance company if they feel the rate is too low, but they can't if they don't get the car in in the first place, but you covered it well.

Thanks!!

My semi-evil response is that some - not all - companies are hoping you'll just cash the check for the lower amount. They paid $1600 for a $3500 claim?? That's a big WIN for them. I once had an adjuster argue with me over $10 and I thought it was silly.......until he pointed out that his company works over a million claims a year. If they can save $10 on each one that adds up quick.

Most companies are very willing to work with me on supplemental repairs and parts. Some waste our time, and therefore everyone's money, playing stupid games that they never win. They should take a lesson from the $10 guy. You can talk me down $10 and call it done, or you can take 3 days to approve my supplement and drag a 4 day job out for 2 weeks.

 

[BlockO]

some - not all - companies are hoping you'll just cash the check for the lower amount.

Most companies are very willing to work with me on supplemental repairs and parts. Some waste our time, and therefore everyone's money, playing stupid games that they never win.

I'd be interested in knowing which insurance companies you like working with and which ones you don't.

 

[KidsGotHeart]

When I worked for GM shipping, we started asking body shops do they want the parts are just the invoice.

 

[INSUREGEEK]

When I worked for GM shipping, we started asking body shops do they want the parts are just the invoice.

Nothing surprises me, but I can tell you that my techs and I make way more money repairing panels than we do replacing them. So why would I order up parts and not put them on the car? We focus on the best and most cost effective repair for each situation. There are cases where we get the car apart and decide a repair is better than a replacement. It's rare, but it does happen.

As for the companies I like to work with....they are the ones that let me decide the best and most cost effective repair. I could go on for days about what all that entails. Suffice it to say that there are a few that trip over dollars to save pennies. Those are the ones that frustrate me.

Company A lets me repair it my way, but back-charges me for the rental car if I take a day too long.

Company B puts everyone in a rental from day 1, and really puts no pressure on me for a completion date, but they argue a $20 change in part prices for 3 days.

 

[Dexter_13]

I had a similar experience with 3 body shops. First quote was from my insurance company's body shop for $1700. Second quote was from the other party's insurance company (different body shop) for $1900. On the third quote I told another body shop I was paying out of pocket (i.e. no insurance companies involved). Their quote was $3400. Seems unethical to me. Labor rates have nothing to do with it. The third shop was obviously padding the work to be done by saying that every panel next to the damaged panel had to be painted with blending. One gets the feeling that the body shops are trying to take advantage of customers as much as they possibly can.

On the flip side, maybe the first 2 companies were short-changing me on the repairs? Maybe I really needed some of that work that the 3rd body shop quoted me.

Still seems out of whack to me.

 

[KidsGotHeart]

Nothing surprises me, but I can tell you that my techs and I make way more money repairing panels than we do replacing them. So why would I order up parts and not put them on the car? We focus on the best and most cost effective repair for each situation. There are cases where we get the car apart and decide a repair is better than a replacement. It's rare, but it does happen.

As for the companies I like to work with....they are the ones that let me decide the best and most cost effective repair. I could go on for days about what all that entails. Suffice it to say that there are a few that trip over dollars to save pennies. Those are the ones that frustrate me.

Company A lets me repair it my way, but back-charges me for the rental car if I take a day too long.

Company B puts everyone in a rental from day 1, and really puts no pressure on me for a completion date, but they argue a $20 change in part prices for 3 days.

They would order the GM parts so they have the invoice "Bill" for taxes and show the customer. They would then get the parts from somewhere else and return the more costly GM parts back to us.

 

[INSUREGEEK]

They would order the GM parts so they have the invoice "Bill" for taxes and show the customer. They would then get the parts from somewhere else and return the more costly GM parts back to us.

I'd never do that! GM is one of the best at price - matching aftermarket parts for me when I get a carrier wanting a cheapo fix. I can get genuine parts for a lower price. I skip the whole ordering and returning aftermarket crap thing. Everyone is happy. Not all body shops are created equal. Most consumers have no idea. Ironically, it seems the people screaming loudest for OEM parts are the ones with carriers that go for lowest price no matter the part. Hmm mmm.

On the 'blend paint' thing - that is entirely true. If I replace a door and only paint the door, it will stick out like a sore thumb. It also depends on the color and other factors. A straight black 2 stage doesn't need a blend. A red 3 stage definitely requires a blend.

 

[KidsGotHeart]

I'd never do that! GM is one of the best at price - matching aftermarket parts for me when I get a carrier wanting a cheapo fix. I can get genuine parts for a lower price. I skip the whole ordering and returning aftermarket crap thing. Everyone is happy. Not all body shops are created equal. Most consumers have no idea. Ironically, it seems the people screaming loudest for OEM parts are the ones with carriers that go for lowest price no matter the part. Hmm mmm.

On the 'blend paint' thing - that is entirely true. If I replace a door and only paint the door, it will stick out like a sore thumb. It also depends on the color and other factors. A straight black 2 stage doesn't need a blend. A red 3 stage definitely requires a blend.

Yeah, I didn't think you would, you seem honest, but it happens enough to make me blush. You are a 1000% correct that most customers have no clue. I can tell you that with GM, you can't get body parts almost at cost if you have a low return %.

 

[INSUREGEEK]

I had a similar experience with 3 body shops. First quote was from my insurance company's body shop for $1700. Second quote was from the other party's insurance company (different body shop) for $1900. On the third quote I told another body shop I was paying out of pocket (i.e. no insurance companies involved). Their quote was $3400. Seems unethical to me. Labor rates have nothing to do with it. The third shop was obviously padding the work to be done by saying that every panel next to the damaged panel had to be painted with blending. One gets the feeling that the body shops are trying to take advantage of customers as much as they possibly can.

On the flip side, maybe the first 2 companies were short-changing me on the repairs? Maybe I really needed some of that work that the 3rd body shop quoted me.

Still seems out of whack to me.

Insurance carrier negotiated labor rates and parts discounts can add up quick! Insurance policies all have different rules for repair estimates. Allstate and GEICO want me to estimate the lowest cost part available. State Farm paid out a bundle on lawsuits, so they will go used parts or new, but not aftermarket. They even refuse to use the term "aftermarket". Now, it's "non-OEM". Buyer beware!! My advice is to find a shop that takes the time to actually explain the estimate, parts, and their repair process to you.

On another note - there are 3 types of people that come into my shop swearing they are paying out of pocket:

1) People with no physical damage coverage....just keep it on the road, it doesn't have to be perfect!

2) People with a truly unlimited bank account....$8,000 is a drop in the bucket!

3) People that already got a check from an insurance carrier and are shopping for the lowest estimate....I can't pay my deductible, OR, Christmas is right around the corner and I need to hold onto some of that cash!

So if you tell me you're paying out of pocket my first question is "how much before you turn it in to insurance, and what insurance company?" I ask that because I am protecting you. I can pretty much tell right away if the repair will exceed your bottom line/deductible, so I need to know which insurance company rules are in play.

I can also advise you that once you cashed the check they gave you, they have assumed you made the repairs they paid for. If you didn't do those repairs you are on your own. If the repair goes above and beyond that pretty little check you cashed, without their consent and inspection, that will likely be on you too. I've seen cars that didn't look wrecked but had $3500 worth of damage to a rear body panel and trunk floor. Trust me, you don't want to cash the check, spend the money, and get rear-ended again.

And if you truly come to me as a cash customer, I am going to give you a worst-case-scenario so there are no surprises later on. More than that I am going to explain to you the correct repair vs the repair you are requesting. I many not even agree to do what you are asking.

A good shop will explain everything even if you call 15 times. A good shop guarantees their work regardless of the insurance carrier threats. A good shop will keep you informed. A good shop might quote you an "I don't really know until I take it apart" price and still give you the real bill complete with proof that they did what they said they did.

 

[Dexter_13]

First of all. Thanks for taking the time to respond.

My advice is to find a shop that takes the time to actually explain the estimate, parts, and their repair process to you.

All 3 body shops explained things patiently. Was surprised in the difference in the details on what they said needed to be done. For example, one shop (the least expensive) said they would send the car out for an alignment because one of the wheels was grazed in the accident The other two shops didn't mention it.

On another note - there are 3 types of people that come into my shop swearing they are paying out of pocket:
1) People with no physical damage coverage....just keep it on the road, it doesn't have to be perfect!
2) People with a truly unlimited bank account....$8,000 is a drop in the bucket!
3) People that already got a check from an insurance carrier and are shopping for the lowest estimate....I can't pay my deductible, OR, Christmas is right around the corner and I need to hold onto some of that cash!

Actually, I've never been in one of those categories. An insurance company has NEVER given me a check in advance. They always pay the body shop directly. People who hit me have offered to give me a check at the accident scene. 'Hell no' is my feeling about that. What if the check bounces? What if the body shop estimate is WAY higher than the amount the check was made out for? I've been hit by people who want to take care of my repairs without using insurance companies. I'm willing to try. But it never works, because there's no way I'm bringing my car into a shop, getting it repaired, then sending the other party the repair statement. They won't pay it, or won't pay all of it. Also - you can't send them an estimate and let them send you check, because estimates are NEVER firm. What happens if the actual repair comes in over the estimate? Then the person who hit me owes me $$$. I'm not comfortable with that. Why should I be uncomfortable, when they hit me. I once did the person who hit me the favor of bringing my car to two body shops, and sending her the quotes. Both body shops stressed the fact that their quotes were only estimates. There could be more damage underneath when they removed body panels, bumper covers, etc. I told her that if she wanted to settle without using insurance she'd have to send me a check for about $1,000 more than the estimates. Then when I picked up the car, I'd send her whatever part of that $1000 didn't get used. Guess what? She wasn't up for that, because she didn't want to be put into a position where I owed her money. Should I owe her money, or should she owe me money if SHE HIT ME? That's why getting a car repaired which was damaged by another car in a collision never works for me. Guess it could work, if someone was to put some trust in a total stranger. That's not me.

Taking it one step further, I was hit by a person and agreed to try to handle the repairs without using insurance companies. Because I didn't want to be put in the position where she owed me money, I asked the body shop if they'd act sort of like an escrow company. Would they let the person who hit me pay them in advance, an amount much larger than the estimate? Only then would I bring my car in for repairs. Then the body shop would send the left over money back to the person who hit me. That way neither she nor I would ever owe each other $$$. The guy at the body shop wouldn't do it. He said it's a bad idea to give a body shop more $$$ than was quoted in the estimate. No body trusts anybody in this world