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Question
After scraping the side of my car on a post that :jumped out in front of me" I took my car to an independent auto body shop that was recommended to me by a friend.
After everything was done the insurance company said that they would pay a labor rate of $48/hour but the shop rate came out to be $51.36/hour, for a difference of $135.00. The insurance company said the shops rates were way out of line.
Can the insurance company determine the rates they will pay?
The insurance company say that the price for paint and supplies are way over the top and that according to them "No other body shop would charge that much". The body shop supplied an itemized list of everything from sand paper to paint thinner that was used in refinishing the car. The insurance company on the other hand said that it should cost 17.8 hours @ $24.00/hour.
Can the insurance company say "This is how much we are going to give you for Paint %26 Supplies it doesn't matter how much it actually cost"?
Hello,
Bad news and you probably won't like my answer, but it is based on over 20 years of claims handling with insurance companies.
They can get away with paying only as much as they want. Many carriers will have a list of specialty shops they will deal directly with. This means if you go to one of the specialty shops on their list, you would not be responsible for any overages. The insurance company will have an agreement with the shop on rates and materials based on volume. Trust me, if you are a specialty shop, they flex their muscle with the shop by demanding free storage and a whole list of other demands. Most of these shops are pretty reputable, but just like what you are going through, they put the shop through the same situation.
Now, in your case you took it to a body shop that obviously was not friendly with the carrier and because of this, the insurance company will only pay prevailing rate, much like health insurance.
It is possible that the body shop is out of line on prices, but you should have gotten an estimate up front by the bo0dy shop. The insurance company paid the going rate and they are not responsible if the body shop is higher. I know it isn't fair, but that is the way it works.
You may try negotiating with the body shop, but they may not do anything if the car is already repaired.
Rob
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Answers by Expert:
Rob Painter, Ase, CFEI, CAFATE
Expertise
Please remember. I am not an attorney and cannot legal advice. My answers are based on my experience due to litigation I have been involved in as an expert, for both insurance companies and while oposing them opposing them. I deal with only comprehensive claims on autos related to fire and theft. I have even had the opportunity to rewrite policy coverage language as it relates to vehicle theft and forced entry for insurance defense attorneys.
Experience
Experience in the area: Working with insurance companies and attorneys on these issues for over 20 years. It is very common to have a reported stolen car with a so-called factory anti-theft system to have the theft claim denied. I have served successfully as an expert witness in the courts across the US representing the insured and their attorney revealing that the insurance expert did not take all known theories into consideration before rendering their "Forensic" conclusion. Many insurance carriers us independent "Forensic" experts to examine reported stolen vehicles commonly using flawed methodology implicating the innocent insured with the theft. My job is to determine if the insurance expert reached his conclusions based on accepted scientific principals or just net opinion with no basis other than opinion. My case record against such experts is very compelling.My resume can be seen at the catagory "Auto Theft and Prevention." In "Forensics" the scientific method must be employed. In the forensic locksmith field determining how a reported stolen vehicle was last operated, many processes cannot be duplicated and are conveniently not addressed. If they were, juries would have the opportunity to make a fair and impartial opinion at least about what the expert could or could not prove. There is a purported process determining the last key used. The chances of determining such is very rare uless the key is found in the ignition lock. Experts commonly destroy evidence as well and are rarely questioned on this event. I reveal the weakness in their testimony on such instances.
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