Getting You Into The Insurer's Direct Repair Network

Insurers have a significant incentive to get you to patronize their "preferred" collision repair shops. They keep vast amounts of money by effectively controlling repairs -- money and savings that are not passed on to you. This happens when the insurer demands a discount off of parts prices, urges the use of salvage yard parts or imitation crash parts, inhibits normal increases in rates charged for labor, and tells the repairers they cannot charge for certain normal repair activities. You still pay the same deductible you would pay at any shop. The insurer is the only one that benefits from your patronage of its "preferred" shop.

When you patronize one of the insurer's "network" shops, the shop has typically signed an agreement with the insurer that requires the shop to use salvage yard parts or imitation crash parts in the repair of your vehicle. Unbeknownst to you, this issue has already been decided for you by the arrangement between the insurer and repairer -- long before you ever had an accident. And insurers monitor their network shops to see if they are complying with the insurer's money-keeping demands. Shops that don't use enough salvage or imitation crash parts in their repairs in the insurer's opinion get negatively rated and are often kicked off of the insurer's program, no matter how good their repairs or customer satisfaction may be.

These insurer agreements with collision repair shops also require shops to fully indemnify the referring insurer. So, although the insurer is effectively telling the repairer how to fix your car, what parts to use, and what procedures and activities don't need to be done to properly repair your vehicle, the repairer has to follow the insurer dictates, take all the liability for the insurer's bad decisions, and pay all costs, expenses, attorney fees, and judgments someone might win for a bad or negligent repair. The repairer's garage insurance carrier is unlikely to accept liability for this agreement, so you could easily be left without a meaningful remedy if the insurer's network requirements for the shop shield it from responsibility for a bad repair.

So, just how does an insurer convince you to patronize its network shop?

Easy. The insurer's employees tell you just about anything to get you to take your vehicle to a network shop. Here are many typical things the insurer representatives will tell you about a shop not in the insurer's network:

That shop overcharges;
There will be delays in getting your vehicle back;
That shop doesn't perform quality work;
That shop is difficult to work with;
We don't guarantee that shop's repairs;
You will have to pay out-of-pocket for repairs.

Sadly, these things will be said about any shop not in the insurer's network whether the statement reflects reality or not.

Statements implying that a non-network collision repairer overcharges, is untimely, unreliable, and doesn't perform quality work are typically made to separate you from a repairer whose primary commitment for the repair is to you, the consumer, not an insurer.

Here's what the insurer representatives will tell you about shops in the insurer's network:

Shops in our network are pre-screened to ensure they perform quality repairs;
A network shop can begin work on your vehicle immediately;
All shops in our network perform quality repairs;
We guarantee the repair work performed by shops in our network;
Your vehicle will be repaired faster by a network shop;
We don't have to inspect vehicles for additional repair work if you use one of our network shops;
You won't be responsible for paying anything other than your deductible if you use one of our shops.

Again, sadly, these things are said about network shops even if the statment doesn't reflect reality.

Typically, insurers don't bother to check out potential collision repair facilities for its network to see if they actually have the right equipment, training, or personnel to properly and safely repair your vehicle. If the shop signs the direct repair agreement saying that they have proper equipment, training, and personnel -- that's usually good enough for the insurer. The insurer doesn't usually follow-up to ensure that the shop's representations are true or to guarantee equipment or training standards are maintained. These statements about the alleged quality and high standards of network shops is simply about getting your vehicle into the network.

What do I say if I don't want to take the insurer's recommendation about a collision repair shop?

Tell your claims representative that you already have a collision repair facility picked out and don't need a referral.

Be prepared: these representatives don't give up easily. Some of them are given bonuses, paid days off, or other incentives to direct you into the network. How many vehicles they manage to get into the network program is also typically an important element in their employee reviews. So they have significant personal incentive to manuever you into the network.

Send the insurer representative an email or letter stating that you do NOT want a referral to a network shop and do NOT want the subject to be raised with you again. (A paper trail is of great importance when dealing with an insurer.)
Send a letter to the collision repair facility you wish to patronize explaining what you are being told by the insurer about the repairer, and cc the insurer at the bottom.
File a complaint with your state's Department of Insurance -- and if you've done so, attach a copy of the letter/email to the insurer and a copy of the letter to the repair facility. (you can usually do this online.)

Some states have laws or regulations expressly defining how an insurer can discuss its "network" program with consumers. In some states, like New York, there is a statute (NY CLS Ins. § 2610) that prohibits an insurer from discussing its network with you once you have declared that you have a collision repair facility you intend to use.