A Tale of Two Estimates

April 12, 2004 by
Filed under: Uncategorized 

More and more insurance companies are sending their appraisers through I-CAR training, but I really can?t see why they are wasting their money. It?s one thing if they adhered to the standards set by I-CAR while writing their estimates, but there is a growing trend of double standards. Many insurance companies are instructing their appraisers to write an estimate one way in the field, or at the drive-in, and another way when the car is in the shop. In most places, this is illegal.

I think it was Progressive who really got this practice down to an art. I could be wrong, and I?m sure some of you will let me know if I am, but I remember this trend beginning with the IRV. That?s Immediate Response Vehicle for those of you not fluent in Progressive speak. The whole concept, at least publicly, is to dispatch this office on wheels as soon as possible so the appraiser can hand the insured a check and make her feel all warm and fuzzy about the wonderful service. Privately, however, in my biased opinion, this immediate response concept is seen as a successful cost cutting measure by those engaged in it.

The idea behind the practice is that a certain percentage of any insurance company?s customers will take the money and run. Companies like Progressive, Allstate and Geico have a large number of lower income customers. Many of these customers see an insurance check as found money, more suitable for fancy wheels or big screen televisions than for repairing their car. If the insurance company can get a look at the damaged vehicle before a body shop writes an estimate, there?s a good chance the insurance company will never hear about that claim again. Some insurance companies are betting that their customer will happily accept a check for about half the damages and head to their nearest Best Buy for a shopping spree.

This is illegal!

Just this morning I had a customer come in with a Safeco estimate 35% less than my estimate. The appraiser saw my estimate, knew I would do every operation on the estimate, but still found it necessary to create more work for him and myself by omitting every R&I and miscellaneous operation. Why? Because the car wasn?t at my shop, that?s why. I?ve got appraisers who I?ve known and worked with for twenty years now telling me they can?t pay for buffing or R&I?s until the car is in my shop being worked on. What a load of crapola.

When you think about it, this practice makes a clear statement. There are no standards on which to base a repair. If there is no guarantee that the vehicle will be repaired, the insurance companies feel they can write an incomplete estimate. Only if the vehicle is being repaired do they feel obligated to pay a fair amount. It?s funny how the insurance industry forgets that an insurance policy is supposed to compensate an insured for damages, not to repair the car at the lowest possible cost. And here is where their twisted little minds have infected the collision repair industry. By scrambling the intent and meaning of the contract they so brazenly call an ?insurance policy,? they?ve brainwashed their customers (which are also our customers) into a semi-retarded state of submissive behavior. Like they have done with the phrase ?prevailing rate,? they have reengineered the term ?insurance coverage? to mean ?we?ll pay to have the consumer?s car repaired to our liking, not the consumer?s.?

This is illegal!

Control is the key to huge insurance company profits. Control is the fecal fertilizer that has nourished the growth of drive-in claim centers, direct repair programs, concierge programs and insurer owned body shops. And control is the reason behind the double standards becoming more prevalent with insurance appraisers. It?s pretty bad when a claims manager from a major insurance company tells you that it?s company policy to write an incomplete estimate in the field. It?s amazing when he comes right out and tells you that many of their customers don?t actually repair their cars. He obviously is brainwashed himself, because anyone who stops to think about it would surely conclude

This practice is illegal!

It must be said that not all insurance companies practice this double talk. In fact, several that I deal with a lot have the opposite attitude. They write an estimate to repair the vehicle using the highest accepted standards, and if the shop tapes off a molding instead of removing it for paint, they consider it to be a problem between the vehicle owner and the shop.

It must also be said that our industry has helped drive this double standard. There are still many shops across our fruity plains that continue to butcher and hack their way out of business. They tape up items they were paid to remove. They repair parts they were paid to replace. They substitute Taiwanese recycled beer can parts for OEM. The insurance industry doesn?t have much trust in the collision repair industry. And who can blame them. Hidden among us, there are still morons, idiots, hackers, butchers, crooks, cheats, incompetents, and other unmentionables who do nothing but make a poor connection between the floor and a bondo trowel. Until this species of collision repairer becomes extinct (and it is getting closer every year) the insurance companies will continue to play these games.

Oh, and did I mention this two-timing estimating approach is illegal?

Disclaimer: I am not, nor to I pretend to be a lawyer (God help me) and do not claim to give legal advice. Hell, I don?t pretend to know much at all about the law. But most states have laws, regulations, statutes, whatever you call them, clearly stating that a licensed appraiser shall approach every appraisal without prejudice, or any pre-programmed guidelines given by their employer or any other outside party. Something like that any way. They must use the highest standards and integrity when writing their appraisal. So if they knowingly omit necessary items or operations from their estimate, for any reason, one would think that would be a violation of above said whereas statute. Don?t ya think? I am not, nor to I pretend to be a lawyer (God help me) and do not claim to give legal advice. Hell, I don?t pretend to know much at all about the law. But most states have laws, regulations, statutes, whatever you call them, clearly stating that a licensed appraiser shall approach every appraisal without prejudice, or any pre-programmed guidelines given by their employer or any other outside party. Something like that any way. They must use the highest standards and integrity when writing their appraisal. So if they knowingly omit necessary items or operations from their estimate, for any reason, one would think that would be a violation of above said whereas statute. Don?t ya think?


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9 Comments on A Tale of Two Estimates

  1. CARLO DE SANTIS on Mon, 12th Apr 2004 2:37 pm

  3. BC on Mon, 12th Apr 2004 6:14 pm
  4. I talked to an ins adjuster and he said he was told to write incomplete estimates and if shop didnt ask for extra, that is just fine.Most wont ask or some find it too much trouble.The articles I see in publications are a joke around here because we have so many shops and not enough work.You cannot get paid to the operations you need to do.I no longer after 25 yrs advise young men to be a body man.I tell them be a mechanic.There are more and more MEGA shops that skim all the profit and shortchange the employee.This seems to be a dying industry to me.I am not getting out, i just purchased a new hunter 811 and am going into suspension work,tires & brakes to go along with my 2 person bodyshop.Downdraft paintbooth Car-O-Liner with car o tronic,Spies Hecker paint2 lifts annual sales 250,000 plus.Not being pessimistic or bitter just a realist.Bodyshops are the ins industrys whipping boy

  5. Insurance Scams on Tue, 13th Apr 2004 9:24 am
  6. Body shops need to come together and start fighting against insurance companies ridiculous policies. We cannot keep letting insurance companies get away with this. If one or two shops give in, then companies think that we will all give in. If we all fight back, then they will start to change things. All they try and do is nickel and dime us, whether it be imcomplete estimates, parts discounts or not paying full labor rate. They will find ways where ever possible. Body shops need to get organized and start fighting together and educate our customers so they cannot get away with this anymore.

  7. Gary Watson on Tue, 13th Apr 2004 12:21 pm
  8. I had an Allstate insured bring in his 2003 Ford Ranger. I inspected the truck and told the customer that the truck needed frame repairs and a new LT bedside. I gave him a quote of around $4500.00. He told me that I was too high and that his insurance company gave him a quote of $1100.00. I looked at the Allstate prepared estimate and it had 4.0 to repair the bedside and no frame time. The truck got hit hard enough to damage the cab panel and they didn’t even address it. I captured the job and Allstate ended up paying over $4500.00 to repair their insureds truck. Not only was the estimate too low I had to educate my customer that I
    was not too high and his insurance
    company was hoping for a cash out.

  9. Scott on Wed, 14th Apr 2004 7:21 am
  10. Gary Watson and Insurance Scams hit the nail on the head. As I see it, the problem is not with the insurance companies, it is with the small part of the body shop industry I like to refer to as BILLY BOB’S BONDO BARN, INC. These shops, unfortunatly, will take that $1100.00 estimate and repair the vehicle improperly and think they did the owner and the insurance company a favor by "helping reduce claims costs." A big problem arrises when they come to our dealership and try to trade the vehicle. To make a long story short, we make the owner angry when we bid a low trade amount because the repair areas are so obvious that we could not resell the vehicle. As he goes to other dealerships and finds the same answer, he thinks THE DEALERSHIPS ARE ALL IN CAHOOTS WITH EACH OTHER RATHER THAN BLAME BILLY BOB’S FOR THE SHODDY REPAIR! Pretty twisted thinking, as far as I’m concerned. The insurance companies are not the ones to blame for this kind of situation, our industry is! Think about it. These are the same shops that have a belief that if they do not request rate increases or material cost compensation, THEY WILL GET MORE WORK!! What really happens is that the insurance company uses that very thinking against the shops that are reputable and realize what their profitability and technician compensation needs to be. Mr. Insurance adjuster says, "BILLY BOB’S BONDO BARN is willing to do this job cheaper." Of course he is, because he just wants to hide as much money as he can until his company goes broke, declares bankruptcy, and reopens under another name, regardless of what that does to the people that are in the business for the long haul.
    Until our industry starts to police ourselves, we can expect these situations. We should not be surprised, nor should we blame the insurance companies for the problems we have created. Look no further than yourself. Are you a part of your local association? Are you an SCRS member? These organizations will not have immediate answers or immediatly solve all of everyone’s problems, but the unity and ideas that can be gleaned are worth more than the annual dues. Maybe, just maybe, if enough people in our industry can pressure BILLY BOB’S BONDO BARN, they will start to get the message.
    The Kansas City Royals baseball team has a motto this year that describes this perfectly. TOGETHER, WE CAN.

  11. paul bailey on Sun, 18th Apr 2004 7:55 am
  12. Exactly what Scott said!!!

    I see cars all the time that were hacked to death because somebody drove the driveable vehicle instead of repairing it. They get a $1500 check in the mail for a $3500 repair. They bank the check and get the car hacked for 600-800 bucks and then install a stereo you can hear four blocks away.

    I also agree with Scott that the insurers are less to blame than the bottom feeders in the repair business. I’ve proven that the wide range of repair shops will write an EXTREMELY wide range of bids on the same damage. I think the low bids are just to get work in because the quality suffers, kinda like McBurger McThing.

    Any shop owner who thinks his underwritten sheets and hacked repairs are saving insurers money hasn’t seen one of those cars OR IT’S PASSENGERS after a subsequent impact to the same area of the car.

  13. the insurance insides on Tue, 20th Apr 2004 11:59 am
  14. I have been in the automotive industry since i was able to pick up a tool (around 8 years old) i am 50 now. I have mainley been on the mechanical and the body end of this field. i was a shop owner for many years till a bad partnership ended that. so with no shop to work and not wanting to work for another shop i went to the insurance industry and offered my skills to same. I applied at every major insurance company that i could find. I was hired by the fourth largest.During the first 5 to 7 months i was trained and conditioned to meet there specific regulated estimate writting standards. There training was a joke in my book the techs that trained us where trained by the inurance companies. They had no mechanical or body shop on hands training. we were told to leave out items if an estimate was written at a residence, then to add only what shops requested when at a shop not involved in there direct repairs family. then we controlled the direct repair shops on our list. In a sence the insurance comapny kinda owned your shop when you were doing there work. The shop would bend over back wards to satisfy the insurance company and eat supplements under 50 dollars because they recieved volume from insurace companies and that they should give them a break. BULL this effects the shop as much as it effects the owner of the vehicle. The shop needs to uphold there life time warrenty and there for do a lot of free work to assure the repairs are done right because the shop is responsable for the final repair. Insurance companies know this and they do use it for there favor. I think insurance companies need to consentrate on insurance and let the trained and qualified techs and body shop estimators do the repairs the way they need to be done. Body shops with well trained techs have more experience in repairing vehicles than 10 insurance adjusters put together. the dentist does not preform heart transplants, the insurance companies do not repair vehicles……….

  15. The rates the problem on Thu, 24th Jun 2004 8:31 am
  16. The biggest problem in our industry is the labor rate vs/ the shortage of qualified help. All the auto body organizations say is do not accept the work. Our industry barely makes a profit so how can we fight the good fight and last. Auto body organizations run from addressing these issues. There must be a way to coerce insurers to pay a decent labor rate without each of us going under fighting the fight. Everything else is rhetoric as i see it. We get paid pretty much for every operation required to fix a car. We just dont get enough. With all the organizations and dues floating around is’nt there some good legal advice opn this????

  17. Jon on Tue, 28th Sep 2004 12:28 pm
  18. How is not paying for R&I’s and Sand/Buff illegal? The last time I checked, they aren’t required operations. Your right in saying that they are necessary for providing a quality refinish, however not everyone goes to a quality repair facility. Some shops still mask off moldings making R&i times unnecessary. I work for one of the companies mentioned above who doesn’t pay for these items in the field when there is no chosen repairer. I’m sure most appraisers would pay you for these operations on a supplement John once they see you’ve done it. Don’t let it be your concern that this is causing more work. Bottom line is that it allows insurers to pay only for what is needed on that repair. All shops don’t need to sand and polish a finsh after painting. Thus, show me you need to do it and I’ll pay you for it. If your worried about illegal activity, lets talk about shops that beat up inexperienced reps for 8 hours on a quarter repair that only takes a tech 4 hours to repair. Isn’t taking the money for those extra 4 hours of labor illegal??? It’s funny how shops think with there wallets in mind too…..maybe we’re not that different after all!

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