How to Handle Insurance Claims

Ramifications of Cashing Out on Insurance Claims

1. Filing Your Claim with the Insurance Company. When you contact the insurance company, you will be assigned a Claims Adjuster to handle your claim. After getting a statement from you, the Claims Adjuster may recommend for you to go to one of its “preferred” auto body shops. As often is the case, “preferred” auto body shops work directly with the insurance company to determine what the insurance company is willing to pay for the repair. Be aware that taking your vehicle to a “preferred” shop could mean that you are compromising your repair due to a potential conflict of interest. You need to ask yourself: “Is the preferred auto body shop working for me or for my insurance company?”



2. The Insurance Company’s Estimate. After filing a claim with the insurance company, one of their estimators (called an “Appraiser”) will schedule a time to look at your vehicle to appraise the damage. The estimate you receive from the insurance company is usually the bare minimum to fix your vehicle. This amount does not include hidden damage* to your vehicle.




*Hidden damage. Sometimes there is damage that is undetectable until parts (e.g. bumpers, panels, doors) are actually removed from the vehicle. When an Appraiser looks at your vehicle and writes an estimate, this does not include undetectable damage. Thus, the Appraiser’s estimate does include the cost to repair your entire vehicle.

3. The Settlement Check. After the Appraiser submits the estimate to the Insurance Company, a check is issued to you for the amount indicated on the estimate.



4. The Big Decision. At this point you may have received estimates from other auto body shops. Most likely the estimates do not match up with the one from the Appraiser. So what are your options?



Option 1:  Cash The Settlement Check And Not Repair Your Vehicle.



Pros:  You cash the insurance check and get the money.



Cons:  Your vehicle is not back to its pre-collision form. This could mean that your vehicle’s safety, drivability, and resale value is compromised. Most importantly, if you change your mind and want your vehicle repaired, you may have to pay the difference of the repair because the insurance company may no longer be on the hook.




Option 2:  Repair Your Vehicle At The “Preferred” Auto Body Shop.



Pros:  Your vehicle gets repaired.



Cons:  The “preferred” shop is working to make your insurance company happy so that they can get more referrals. You may be getting the bare minimal repair to your vehicle which may include aftermarket parts or used parts that are substandard




Option 3:  Repair Your Vehicle By An Auto Body Shop Selected By You.



Pros:  Your vehicle gets repaired. Most importantly, you make the decisions on how your vehicle is going to be repaired, not the insurance company. A good auto body shop will work with you to determine your goals and to help you accomplish them.



Cons:  There really are no downfalls to selecting your own shop as long as you choose wisely. Pick a reputable shop that will not compromise your repair.  Reviews by actual customers are a good way to determine which shops are reputable.

Opinions expressed in Ask Mark articles do not purport to provide legal or other professional advice. If such advice is needed, consult with your attorney or other qualified adviser. This publication is copyrighted by United Auto Body. The contents of this publication may not be used for any purpose without the written consent of United Auto Body.