Posted On: May 13, 2008, 8:16 pm CDT

Posted By: The Professor

An insurance company sets a premium, which is, paid by an insured. There is no negotiation. When there is a claim, the insurance company does everything in its power to dictate and control repair allowances. The company decides what is to be repaired or replaced. They often try to dictate the use of cheap replacement parts and apply labor rates that do not come close to covering the repair shop overhead.

Repair shops must make a profit and are forced to inflate labor hours. They often "setup" vehicles and make damages appear more severe than they actually are.

Many insurance adjusters have little of no hands on repair shop experience. Most can't tell the difference between a legitimate estimate and a setup.

Adjusting claims is a game played by both sides. In the end, right or wrong, an agreement is reached. Once an insurance company adjusts a claim and reaches an agreed price, they pay the amount of loss less the deductible. They have fulfilled their obligation under the insurance contract. It should make no difference if the insured paid the agreed price to repair the vehicle, completed all or part of the repair themselves, or if a repair shop did the job for free. Any transaction between the vehicle owner and another party (repair shop) is a separate contract. Insurance companies have no legitimate business interfering.

The insurance company should have the right to verify that repairs have been made and the vehicle is safely drivable, if they continue to insure the vehicle.