Lies and the Lying Liars in the Insurance Industry.

June 15, 2004 by
Filed under: Uncategorized 

One of the biggest problems with large corporations is their ever changing operation structures. People come and go, policies change, internal hierarchies are restructured, retirements, firing, hiring and promotions all contribute to corporate evolution. Evolution in business is usually a good thing. It can also be bad for people outside that business who rely on the old guard to serve their needs.

We all hate it when insurance companies move personnel around. That is, unless a current appraiser in your area is a scoundrel. But because most people fear and avoid change, we dread the inevitable personnel movement. If you?ve built a relationship with an appraiser, or an area claims manager conducts business fairly, and you can actually make a profit repairing cars insured by a certain insurance company, any personnel changes can cause you grief.

Recently, AIG, a company that last year was voted as one of the better companies operating in Connecticut by Auto Body Association of Connecticut members made some of these personnel changes. I?m not entirely certain of the details of the changes, but I do know that I now have a new appraiser to deal with, and the appraiser told me that management was restructured.

For the past couple of years I have dealt with a great appraiser. He is knowledgeable and easy to work with. He understands our operation and paid us for what we do, and he paid us a fair labor rate. Only once, when he was on vacation, did I have trouble with his company, and I filed a complaint against the replacement appraiser and his boss with the Connecticut Insurance Department (See “More Fun with Connecticut?s Insurance Department”) for lying to me about other shops willing to repair a vehicle at a lower labor rate. It turned out the appraiser never called the other shops.

Anyway, this new appraiser showed up last week to look at a Mercedes hit in the front. It was an older car and no used parts were available, but it still was repairable. The new OEM parts made the appraisal pretty high, something that threatens an appraiser?s severity rate or average claim amount. On content our estimates were comparable, but his labor rate was six dollars less than what I was willing to accept. I tried to negotiate with him but he told me it was all he could pay. He also wanted me to produce the invoices for the two tows it took to get the vehicle to my shop. I told him no way. Those are private internal business documents and he had no right, or need, to see them. He had my printed tow bill, and that was all he needed.

I asked him who his boss was and he gave me the person?s name and phone number, left me a copy of his deficient estimate and drove away. I called his boss who referred me to a regional claims manager. The claims manager was a very polite and agreeable guy. I told him what his company has been paying me for a labor rate for the past two years, and that this new appraiser refused to pay it, and that I was not about to go backward. He said he?d take care of it and I should hear from his appraiser shortly.

About an hour later the appraiser called me and offered me three dollars more an hour, still three dollars short of what I?ve been getting. I told him no way. I had the vehicle torn down, it was towed here a full week earlier so I had storage charges, plus a markup on two tows. It would cost him double the labor rate difference to move the car to another shop. The appraiser then told me that he had the vehicle owner on the other line waiting for my decision, and that the owner had talked with two other local shops that were willing to come get the car and repair it for the insurance estimate. I told the appraiser that was fine. They could come get the vehicle.

I had spoken with the owner several times prior to this and had kept him abreast of the entire situation. He was adamant that I repair his vehicle, and encouraged me to keep trying to get an agreed price. One way or the other I would be repairing the vehicle. So I was really surprised when the appraiser told me the guy was ready to have the car moved.

I immediately called the vehicle owner to find out why he?d changed his mind. There was no answer. I had to leave him a message to call me back. Maybe I had just missed him. Two hours later the owner called me back and denied talking to this appraiser, or anyone else from his insurance company that day. He had been out all morning and part of the afternoon. There was no way he could be reached.

He told me he also had a message on his machine from the appraiser. He would call the appraiser to find out what was going on. Was it possible that I was lied to again by an AIG appraiser?

About an hour later I received a call from the appraiser. I don?t know why he called because I didn?t really give him a chance to tell me. I asked him why he lied to me. He played dumb. I told him that I knew he never talked to the vehicle owner, and that he lied to me when he told me he had the guy on the other line. He played stupid again and told me he meant the adjuster. He had the adjuster on the other line. Yeah right! That makes sense. I didn?t buy it. I hung up.

Since the regional manager sounded like such a nice guy, I called to tell him what just happened with his new appraiser. When I told him who I was, he greeted me nicely and asked how I was doing. I said, ?Not too good.?

?Why, what happened??

?Well, first let me remind you that I have a pending complaint against one of your appraisers for lying to me in an effort to manipulate labor rates. Now this new appraiser just lied to me. He told me he had the vehicle owner on the other phone line, and the owner was ready to move the car out of my shop if I didn?t accept the low labor rate he was offering. I refused and contacted the vehicle owner, but the owner told me he never talked to anyone from the insurance company that day. The appraiser was trying to hustle me. Is it AIG company policy to lie and use these tactics to obtain agreed prices at these low labor rates??

He sounded surprised. ?Go ahead and repair the car. I?ll make sure you get your rate. And if you get any more AIG claims you can call me directly. I?m going to call this guy?s supervisor and have him contact you.?

Wow! That?s the kind of people I like to deal with. I still haven?t heard from the appraiser?s supervisor.

What?s the moral of this story? There are a few.

1). Don?t take an appraiser?s word as the gospel. They are under pressure to keep costs as low as possible. Insurance companies are using severity rates to determine raises and promotions. Some appraisers take too much stock in this system and will do whatever possible to keep rates low in their area. Some appraisers do have the ability to negotiate, but they simply refuse. They?d rather resort to dishonest practices than to let a few more dollars slip through their fingers.

2). If you don?t ask for it, you?ll never get it. Sometimes just asking for more money will get you more money. Many of you have posted labor rates that match exactly what the insurance companies are willing to pay. How will you ever get any more money if you don?t post higher rates? You can always negotiate down, but you can?t charge any more than what you have posted.

3). Move up the food chain. If you can?t get what you want from someone, speak to their boss. If that doesn?t work, speak to the boss?s boss. Eventually you will either find someone to give you what you want, or you will reach the top with nothing to show for your efforts. But at least no one will be able to say you didn?t give it your best.

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