The Folks at AIG Have Lost Their Minds

August 3, 2009 by
Filed under: Collision Repair Industry 

AIG has had a hard time in the past year or so. Bad publicity from less than squeaky clean business dealings has caused a panic, prompting a name change. They were losing thousands of policy holders every month due to the stigma of the AIG brand so they changed their name to 21st Century Insurance. Sounds so clean and modern, doesn’t it? Apparently the stress of their identity crisis has caused them to lose their minds altogether. Their legal department–those tasked with creating the disclaimers printed at the end of AIG’s estimates–has decided that the law shouldn’t stand in their way of taking back control of their company, and trying to take control of the collision repair industry. Their disclaimer page has been expanded, now containing some pretty inventive statements.

Let’s take a little quiz, shall we? I’ve copied and pasted their disclaimer page below and organized it into a numbered list.  See if you can pick out the statements that, 1) don’t belong on an estimate, 2) are untrue statements, or 3) violate the law. Below is a link to a scan of AIG’s Disclaimer pages. I’ve highlighted the phrases that I have a problem with based on Connecticut law. Let’s see how many other States’ laws AIG violated.

    2. Authorization for repairs can only be granted by the vehicle owner.
    3. Do not repair this vehicle until all guidelines listed below are acknowledged and accepted.
    4. Failure to do so may result in additional cost to the vehicle owner.
    5. This estimate is based on our initial inspection and does not cover any additional parts or labor which may be required after the vehicle is in the repair facility and is disassembled.
    6. The repair facility must review and concur with the scope, methodology and labor rates of the repair estimate before
      beginning repairs.
    7. Occasionally additional damage is discovered after the vehicle is disassembled.
    8. If this happens, it is the repairer’s responsibility to notify 21st CENTURY INSURANCE appraiser as soon as possible and to obtain written authority to complete the additional repairs needed.
    9. Any supplemental work must be made available for inspection by 21st CENTURY INSURANCE appraiser and approved by 21st CENTURY INSURANCE .
    10. Verbal authorizations by the  appraiser are not binding.
    11. Supplemental repair requests presented after the completion of repairs may be denied.
    12. Any supplemental charges must be supported by documentation in the form of invoices, pictures and receipts for the entire repair estimate.
    13. The deductible may or may not be listed on the appraisal.
    14. All deductibles and other owner responsibility cost must be collected from the owner before releasing the vehicle.
    15. All repairs must be completed in strict accordance with the manufacturer’s specifications and recommendations.
    16. It is understood that the repair facility listed on this estimate, if one is listed, agrees to complete and guarantee all repairs listed on the estimate for the amount listed on the estimate.
    17. 21st CENTURY INSURANCE does not warrant or guarantee the work of any repair facility or technician and assumes no responsibility or liability for the quality of repairs or workmanship of any repair facility or technician.
    18. This estimate may have been prepared based on the use of crash parts supplied by a source other than the manufacturer of your motor vehicle.
    19. Warranties applicable to these replacement parts are provided by the manufacturer or distributor of these parts rather than the manufacturer of your vehicle.
    20. **************************** NOTICE ***************************************************

AIG’s New Disclaimer Page

Here is my take on the above statements. Of course, lacking the brilliance and convoluted vocabulary of an educated attorney, I’m just talking out my ass, but I’ll give it my best shot.

Statements 1 and 2 are pretty basic and fine with me.

Number 3 assumes that all the guidelines below are legal and proper, and that AIG has the authority to enforce those guidelines. Number 3 is a clear violation of common law and common sense. Who do you think you are AIG?

Number 4 is an attempt at punishment for violating number 3. And in most states, insurers have to fully indemnify the insured/claimant. But oh so scary AIG.

5 is fine.

6 had me laughing my ass off. That’s LMAO for those of you who forgot how to read and write. I doubt if there is one place on earth that allows a bunch of empty suits to dictate to repairers how to repair a vehicle. As far as their labor rates, well you all wrote your own obituaries on that one. Get off your high horse AIG.

7 is fine.

8? The only written authority we need is from the customer. Are you our customer AIG?

Thanks to some poorly played politics here in Connecticut, Statement 9 is now true. How about the rest of you?

10 is a violation of Connecticut statutes. The appraiser is an independent entity who negotiates the physical damage. Just try changing one of your appraiser’s estimates AIG. We’ll see you in court.

11 is a gray area now that we have allowed our politicians to compel us to wait for the appraiser.

12 is false here in Connecticut, and when pushed, your consitituti0nal rights as a business person would secure your right to keep your invoices private. If they suspect you of fraud, let them prosecute you.

13 is very enlightening information, don’t you think?

14 is another example of insurers thinking they run your businesses. And that is simply because so many of you let them.

15 is OK, but again, keep your nose out of how I run my business AIG.

16 is more of the same. Understood by who? Is AIG personnel now our shop foremen?

I actually applaud 17. It about damn time an insurer stops trying to guarantee a body shop’s work.

18, 19 and 20 are all fine.

So, how did you do? Disagree with any of my points? What do you think about AIG riding on Obama’s coat tails and trying to be your nanny? Wait, didn’t AIG get a bunch of that bail out money? Maybe it was Obama’s legal team who wrote those disclaimers.

How many of you actually read the disclaimers that insurers put on the end of their estimates? Why hasn’t anyone complained about this yet?

When I read this I called the head of claims at the main office in Albany NY. I told him I was giving him a courtesy call before I filed a complaint with the Connecticut Insurance Department. I went through the list one point at a time, just like I did above and explained why those statements had no business on any estimate in Connecticut. The man was very polite and interested in what I had to say. He blamed the disclaimers on the legal department and said he would speak to them about the situation.

Coincidentally, about a half hour after my phone call with AIG’s head of claims, an AIG appraiser showed up at the shop I work at to write an estimate. He wasn’t there a minute when his cell phone rang interrupting our conversation (I hadn’t yet had the chance to mention my phone call to Albany). He looked at the caller ID and said, “I have to answer this, it’s my boss.” He answered the phone, “Hello boss!” I was close enough to hear his boss yelling, or maybe just talking loudly.  It was loud enough for me to hear some profanity and “John Shortell” in the same sentence. The appraiser excused himself and walked out of the building and into the parking lot for some privacy. When he finished the call he came back in and I was laughing. I told him I heard what his boss said, and apologized for getting him yelled at. Neither of us could understand why his boss was yelling at him about me. This was the corporate lawyers’ problem. But you know what rolls down hill. I called the big boss and gave him a hard time. The big boss called the little boss and gave him a hard time. Then the little boss called the appraiser and gave him a hard time.

All the whining and they still haven’t changed their disclaimer page.

So, last week I filed a complaint with the Insurance Department. Sucks to be them right now. This is something that’s going to be hard to sweep under the rug. Here are clear violations, in writing. Can’t wait to see how the Insurance Department handles it. They’ve been on a roll lately fining insurers. If they keep it up someone might think they are actually doing their jobs.

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7 Comments on The Folks at AIG Have Lost Their Minds

  1. Roger Walling on Tue, 4th Aug 2009 5:35 am
  2. Your comments are pretty much true in the state of Ma.

    Looks like a good cause for a good “Bad Faith” and “Unfair Claims Handling case to me.

  3. Ann Spink on Tue, 4th Aug 2009 9:01 am
  4. This is nothing new. At least 7 years ago, this started appearing on AIG estimates. The first one I saw called for procedures that opposed OEM specs. The letter to AIG and the vehicle owner explained that we could not agree to the “scope and methodology” of thier estimate because their estimate violated the statement, “All repairs must be completed in strict accordance with the manufacturer’s specifications and recommendations.”

    They lost their minds a long time ago.

  5. Wade Ebert on Tue, 4th Aug 2009 9:05 am
  6. God Love You – John Shortell.

    One day maybe we’ll actually get paid for the time we’ve all spent “fixing” what we did not break. I think we should lobby for a bounty to be established and paid for exposing such insurer abuses. Please tell me that was a third party loss!


  7. Missedthebus on Wed, 5th Aug 2009 9:17 am
  8. As far as I know AIG bought 21st Century a while back. They poured all of their personal auto business into it and then sold it to Farmers effective 8/1/09. I don’t think AIG actually writes cars anymore. It will be interesting to see how the insurance department replies. I’m guessing they let it sit on their desk a while and then write you back to say “this company no longer exists” or something.

  9. Rogue Adjuster on Thu, 6th Aug 2009 9:36 pm
  10. That’s hilariously bad. That (obviously) wasn’t written by any attorney. It’s barely literate. I don’t know why you get your panties in such a twist. I doubt anything in the disclaimers are legally binding on anybody anyway, even their own insureds. I don’t even remember the last time I bothered to read one.

    There’s no reason for any “disclaimer” comments to be addressed to the repairer at all. The comments section or estimate header only needs to have contact information for the shop to know who or how to get in touch with somebody with regards to supplements. What you see here is so broad that it arguably even creates an “employment relationship”. #10 and #13 are just weird. “Well, sometimes we’re incompetent but that shouldn’t be binding on us”!

    Having experienced this sort of stuff from every side of the industry I frequently find myself shaking my head at how much this whole industry is like a trailer park. But it shouldn’t be a surprise really. Want to know what insurance company auto units are really like?

    Insurance companies are monolithic. Auto claims people are at the (absolute) bottom of the pile. At the top are the suits, big agents, and the investment people who take the premium and turn it into more money before they have to pay claims with it. Just below them is the underwriters. Nowadays most underwriters are computers so we’re really talking about the programmers who decide who gets insured in the first place and for how much. Below them is claims. Claims actually don’t matter at all. The company likes to tell their claims people they matter but they really don’t. It’s more like the arm of the company you have to handle nuisances. Lets say they’re like the janitors. If the people programming the underwriting computers have done their jobs correctly you already know almost exactly how much you’re going to have to pay out. You buy reinsurance from larger insurance companies to cover the unexpected disasters.

    At the top of claims are large loss litigators and general adjusters who handle large property claims, just below that is the catastrophe teams which can be great PR arms. At the very bottom is auto claims.

    You can train a monkey to do car claims (I like to call them “kiddie claims”) so you end up with two types of people. Type 1 is the clueless recent college grad who will have to learn everything the hard way but at least can keep up with your higher-end customers and won’t scare them away with tattoos and nose rings. Type 2 is the high school / tech school grad who decided the dirty part of the shop isn’t for him and who is looking to “advance”. You need someone like this around to handle claims involving a certain level of technical expertise. You can also usually pay these people less.

    The field unit supervisor is usually a #2. This person is who writes the sort of stuff you see above. It’s not his fault really. Claims offices are like highly specialized law offices. The person in the next cube over, who isn’t even a “supervisor” may be handling a dozen six-figure injury claims or coverage issues on houses that have burned to the ground. Deaths, whatever. They know more than the attorney they’re dealing with on the other end of the phone and are just toying with him while they play solitaire on their computer. And Joe six-pack the auto unit manager has to argue all day over whether you need to use the $135 aftermarket fender or the $150 factory one. When something bad happens it’s usually (in a relative way) very bad. Some car your idiot employee forgot to have picked up has accrued a $5000 storage bill or something. So he writes a rule for that. Somewhere in America some insured won an insurance department complaint that gave him a $2000 deductible for free because the carrier forgot to list it on the estimate. So now there’s a rule for that. He ends up writing a pile of disclaimers to cover every possible circumstance and you get an aimless circle.

    Now, these people rarely, if ever, get promoted beyond that point. He may get invited to golf games with the other supervisors or they may pretend that his comments in meetings are “helpful” or “insightful” but nobody takes him seriously. They make fun of his poor grammatical skills behind his back. Sometimes not even behind his back. The stuff spell-check can’t hide. He tries to use legalistic sounding terminology or stuff he cribbed from other carrier’s estimates, but in the end it sounds like a hapless teacher trying to corral and out of control kindergarten class.

    It’s so bad you almost feel sorry for him.

  11. John Shortell on Fri, 7th Aug 2009 8:43 am
  12. Originally Posted By Rogue Adjuster I don’t know why you get your panties in such a twist. I doubt anything in the disclaimers are legally binding on anybody anyway, even their own insureds.

    I watch out for these things because people are sheep. Consumers have no idea of their rights. And body shop personnel are just as bad. I remember several years ago, a few insurance companies we asking body shop people to sign the estimate with disclaimers very similar to this. And some of these morons did just that! Too many people are too ignorant, and they are intimidated by crap like this.

  13. Rogue Adjuster on Thu, 13th Aug 2009 8:50 pm
  14. Well put.

    I’d be embarrassed to present that disclaimer list to either a shop OR a customer. (Well, maybe with a disclaimer of my own that my boss is making me do it!) Even if your customers are “sheep”, plenty of them still have enough education, experience, or legal background to see that for what it is, which is (at best) inarticulate.

    Anyway, I’m bored. Shall we help them re-write it?

    1) This estimate shall not be considered a binding authorization to repair the vehicle.

    2) Only the owner or their appointed legal representative may authorize any repairs.

    3) The types of parts listed and the repair methodology described in this estimate may be considered “agreed to” by the carrier.

    4) The vehicle owner may be responsible for charges for certain parts and labor items not agreed to by the carrier.

    5) The estimate represents visible damage only.

    6) (Redundant – See #4)

    7) & 8) (Are a single statement) The vehicle owner is responsible for notifying the carrier of any additional damages noted or changes in repair methodology requiring additional expense prior to incurring such expenses.

    9) The vehicle must be made available for inspection as often as we reasonably require. (Insureds policies already say this) (Largely a practical matter with regards to claimant supplements)

    10) (Huh?)

    11) (Redundant – See #7 & 8)

    12) Supplement requests not supported by appropriate documentation may be denied.

    13) (Um?) (The contract language covers this with regards to the owner. If you’re the shop you’re collecting the full amount at the end of the repair, less any open supplements, anyway – moot.)

    14) The owner may be responsible for paying deductibles and/or costs associated with any unrelated damages prior to vehicle delivery. (Are they saying I can’t offer financing of the deductible or UPD items?)

    15) Carrier expects that all repairs are in accordance with manufacturer recommendations.

    16) (Redundant) (Covered by #17)

    17) – 20) (As written above)

    But why stop there?..

    21) Owner will be responsible for rental expenses incurred as the result of unreasonable repair delays, and/or unrelated repairs.

    1a) Inspection of the vehicle by appraisal staff does not constitute acceptance that a covered loss has occurred.

    22) (Insureds) If you and we do not agree on the amount of the damage your policy provides for …

    You could go on and on.

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