Steering You Wrong: Is Your Insurer Taking You for a Ride?

Have you ever called your insurance company after an accident and been told that the auto body shop of your choice wouldn’t be able to handle your repairs? Did your insurer persuade you to use of their “recommended” or “guaranteed” shops, despite the fact that you never heard of these businesses before or they were out of the way for you? If so, you were “steered,” and what happened to you is wrong.

Why it is Done
As part of their services, several insurers offer their customers access to their network of “preferred” collision repair facilities. These are businesses that regularly perform work for that insurer; in return, the insurer provides marketing and other perks to that shop for making their insured’s repairs a priority. These businesses are commonly known as “Direct Repair Program” or “DRP” shops.

In a typical “DRP” scenario, the insurers agree to market a shop to their policyholders (typically when an insured calls to report a claim) if that shop agrees to repair the vehicle to the contractual standards of the insurer. These standards often include giving that particular policyholder high priority at the shop and guaranteeing that the repair will be completed within a set period of time (i.e. three days or even 24 hours). When conducted appropriately, DRPs provide peace of mind to customers who are concerned about the timely return of their vehicles and enable the insurer to build solid working relationships with shops in a particular market area. (Hammer & Dolly, April 2011)

Why it is Wrong
While DRP arrangements exist in most states – and insurers are certainly able to market their services to customers – it is important that you never forget that you, the consumer, have the ultimate right to have your vehicle repaired at the shop of your choice. If and when an insurer gives you the impression that you can only go to one of their program shops, you are not being treated fairly. In 2008, the Society of Collision Repair Specialists (SCRS) – a national collision repair trade group comprised of 6,000 collision repair businesses and 58,500 specialized professionals – issued a list of what they consider to be unfair and deceptive DRP marketing practices. Here are a few of the most common offenses: Deceptive referral practices of a malicious nature. Utilizing language and word tracks that cause the consumer to question the quality, services and integrity of any repairer that is not a part of an insurers’ Direct Repair Program (DRP) or “referral” program.

Disparaging Statements. Insurance company employees making disparaging remarks to consumers in an effort to apparently “steer” them to one of their DRP or referral shops. Vague and Ambiguous remarks about repair “delays.” It is reported that various insurance company employees have time and again insinuated, or worse yet, stated to a consumer that the repairs will take longer if they are NOT done at one of their

DRP shops.
Preying on the consumer’s lack of knowledge in their rights or repair expectations to gain leverage against the informed repairer. The vast majority of consumers do not have the skills or experience needed to make sound collision repair decisions without guidance and input. Unfortunately, it appears as though some insurers take this situation and use it in their favor. The end result is a consumer who is coerced into a situation that may not be in their best interest. In fact, if repairs are done in a substandard way, the consumer is oftentimes at a loss on how to rectify the situation.

What Others Have Done
Unfortunately, “steering” can become so problematic at times that the legal system has to get involved. Bill Ebert, a body shop owner in Illinois, successfully sued State Farm for using unfair tactics in encouraging customers not to utilize the services at his shop, American Auto Body. According to Bill’s son (and current shop owner) Wade, State Farm had told consumers that his family’s business was known for charging for work they hadn’t performed and other offenses. “[State Farm] took it upon themselves to start telling customers, ‘You know, American Auto Body doesn’t play nice,’” he says. “You can say all kinds of things [to market your services], but when you start lying, there’s a problem.” The push against “steering” has even extended into the world of politics. In 2009, California Congresswoman Jackie Speier opposed state legislation (sponsored by Personal Insurance Federation of California, who represent State Farm, among others) that gave the state’s auto insurers greater leeway in marketing their DRP services. Ultimately passed into law in October 2009 (much to the chagrin of many body shop industry groups), the bill added the following passage to the California Insurance Code: An insurer may provide the claimant with specific truthful and non-deceptive information regarding the services and benefits available to the claimant during the claims process. This may include, but is not limited to, information about the repair warranties offered, the type of replacement parts to be used, the anticipated time to repair the damaged vehicle and the quality of the workmanship available to the claimant.

What You Can Do
Because you are a vehicle owner and collision repair consumer, it is always in your best interest to make the most informed choice on where you have your car repaired. While you should be cautious of being steered towards an insurer’s preferred body shop, you should also be aware that many DRP shops perform professional, high-quality work. It is quite possible that your shop of choice is a DRP shop anyway. But never allow anyone to take away your right to choose. If you would like more information on steering, or if you suspect that it has happened to you, please contact the Washington Metropolitan Auto Body Association at (804) 789-9649.