The National Highway Transportation Safety Administration absolved Tesla of culpability in the death of a man whose Model S T-boned a tractor-trailer while in Autopilot…
The story of a state-published auto insurance FAQ in North Carolina being used by insurers instead of actual legal grounds to dispute collision repair rates raises the question of what confusion could arise in other states.
In North Carolina, K&M Collision provided a letter showing GEICO citing a passage in the “Consumer Guide to Automotible Insurance” instead of state law as a reason not to pay all of the shop’s bill. The state had more than a year prior told repairers the language was misleading and would be stricken from the guide, according to K&M. (The government has not yet done so.)
We took a quick look at some other official state guides meant to inform consumers of their auto insurance rights. We found other passages in several which shops might want to double-check to ensure the language their tax dollars helped fund truly reflects state statute.
Minnesota’s “Nuts and Bolts” consumer guide in particular intrigued us because the state Department of Commerce collaborated with the Alliance of Automotive Service Providers to write it.
In the document’s Q&A, it answers a question about repairer choice rights as follows:
You may have your vehicle repaired at the shop of your choosing; however, the insurance company is only obligated to pay for repairs based on the lowest estimate that provides for the satisfactory repair of your vehicle. If you choose to have your vehicle repaired at a shop other than the low-bidder, you may be responsible for paying the difference.
Executive Director Judell Anderson said AASP-MN worked on the document to address Minnesota auto insurance misconceptions. She said that particular passage hadn’t been used as GEICO did in its dispute over K&M’s bill.
“That’s not really been the case here,” Anderson said. She indicated the term “satisfactory repair” seemed to keep issues like the GEICO-K&M situation from happening.
“That’s the key qualifier,” she said.
“My insurance company has an estimate to repair my car for $1250.00 from a repairer but I want to have the car repaired at another shop for $250.00 more. Can I require the insurance to pay me the difference in the amounts of the two estimates?
“If the estimate of the insurance company is that of a reputable repairer or if any other repairer will do the work for that amount, the insurance company will not have to pay you the difference in the estimates. You can, of course, take your car to any shop of your choice but in these circumstances you have to pay the cost differential.”
“I submitted two estimates, and the insurance company revised the estimate and paid me based on the revised estimate. Can they do this?
“Yes, as long as the revised estimate properly repairs your vehicle. You need to have your body shop review the revised estimate. If they feel they cannot properly repair your vehicle based on the revised estimate, the repair facility should contact your adjuster.
“Can the insurance company tell me where to have the repair work done under either homeowners or auto?
“Yes, if the insurance company is willing to guarantee the work. You always have the option to go to the repair shop of your choice, but you will be responsible for the additional costs. Your insurance company may only be obligated to pay for the lowest estimate.”
“Can a company require me to have a car fixed at a specific repair shop?
“No. The company may elect to settle your claim based upon the lowest of the estimates you have provided them, in which case you could have your vehicle repaired at the shop of your choice. However, if you have the repairs done at the shop with the higher estimate, you could be responsible for the additional costs. The second method of settlement is to have the company adjuster prepare an estimate that you may take to any shop you desire. Generally, a body shop will honor the company’s estimate. The third method involves you voluntarily taking the vehicle to a shop that your company has a special agreement with, known as a preferred shop. The company has agreed to let the preferred shop prepare the estimate and complete the repairs. In any case, you should contact your company and ask which method they generally use and then make your decision accordingly.”
“Can I choose my own repair shop?
“Yes. Provided the repair shop is licensed, your insurer has to try to reach an agreed price with the shop of your choice. If your company cannot reach an “agreed price”, they will provide you with the names of licensed shops who can do the repairs for the price the company has determined.”
National Association of Insurance Commissioners
“The adjuster recommended a specific body shop. Can I use a different shop?
“You can have it repaired wherever you choose. But no matter what shop you choose, the adjuster will base your claim payment on market price for the repairs and pay the local average rates for parts & labor.”
Amid the continued battles on labor rates and defining what’s reasonable, we thought we’d also share Sonoma County California Superior Court Judge James Bertoli’s 2009 comments from the transcript in the small-claims cases Wilkins v. Delross and Mason v. Ellis and Ellis.
“One thing this case is not is a determination as to whether the (State Farm) survey is accurate. Quite frankly the contractual relationship between State Farm and its insured can develop whatever methodology they want to come up with a price on their first party claims. … I think that survey from a statistical standpoint would get a first year college student a flunking grade. But … (t)hat’s the method that their people agreed to, their insured agreed to.”
But in this case, he said, the issue was whether auto shop rates were “reasonable.”
“That is how damages are determined in a negligence case,” he said.
He then continued to note that “a reasonable charge implies a range.”
“If the charge falls within that range, it will be deemed to be reasonable,” he said. “No particular charge can be said to be the only reasonable charge.”
In this case, rates ranged between the “($)70s to the one teens,” according to Bertoli.
Featured image: The story of a state-published auto insurance FAQ in North Carolina being used by insurers instead of actual legal grounds to dispute collision repair rates raises the question of what confusion could arise in other states. (Dorottya_Mathe/iStock/Thinkstock)