To curb insurance costs and to streamline operations, auto repairers are required to use one of two estimating systems designed by insurance companies. Usually, auto repair companies operate with both estimating systems to satisfy as many insurance companies as possible. Interestingly, the cost of running the systems is borne by the repairer, and it runs not less than $13,000 per year.
The auto shop prepares an estimate (at the repairer's expense) for vehicle repairs using the system preferred by the insurance company. The estimate has to include digital photos of a prescribed nature (as per the insurer), including:
All angles of the vehicle
Details of the damage
An estimate may take up to one hour to complete, depending on the damage. An independent appraiser is paid by the insurance company if he prepares an estimate. Most of the time, independent appraisers are not journeyman auto body technicians. Sometimes they get letters from insurance companies to reduce a certain amount and/or a certain number of labour hours from the estimate. In such cases, the independent appraiser follows their instructions in order to keep his job.
When a repairer submits an estimate to the insurance company for approval, the estimate is usually reduced before granting approval. Most of those who are responsible for approving the estimates have never repaired a vehicle in their life. It is the responsibility of the repairer to offer proper repairs and live up to the safety standards prescribed by Transport Canada.
Although auto body repairers carry some of the highest operating costs and journeyman auto body technicians are highly skilled people, they remain among the lowest paid due to these restrictions. Repair facilities have to operate as per the designated labor and other rates because the insurance company will not pay extra. The repair facilities therefore have to absorb all incoming rising costs, such as carbon tax, minimum wage increases, payroll liability changes, property tax increases, and insurance cost increases.
‘Preferred’ shops are the repair shops which have been designated by insurance companies. Although it may sound like a better repair facility, it is not! They don’t become ‘preferred’ shops because of their superior ethics or finished products. They bow to the demands of insurance companies to provide them kickbacks. The insurance company adjuster may advise that if you do not take the vehicle to the insurance company’s ‘preferred’ shop, they will not be able to warranty the repairs. However, the insurance company never warranties repairs unless a repair facility goes out of business or you have moved to another jurisdiction.
Alberta Legislation offers the vehicle owner with the right to have their auto damage estimated and repaired at the auto body repair facility of their choosing. Insurance companies violate this law by consistently driving traffic to ‘preferred’ facilities. The reasons are not difficult to determine.
In some jurisdictions, insurance companies have built customer service centres where accident victims have to report with their vehicle to initiate the repair process. Once they hand their key to the customer service representative, they will never know where the vehicle will be repaired!
As of today, Wawanesa Insurance, one of the largest insurers in Alberta, has removed (without notice) all directly linked contact between the insurance company and independent auto body repairers. This effectively removes the vehicle owners’ right to have their vehicles estimated and repaired at a repair facility of their choice. So, automobiles are being towed away from independent repair shops to ‘preferred’ shops, sometimes hours away.
The list of insurance industry manipulation is a long one and cannot be covered in one short passage. Contact us today for more information.
As a courtesy we detail your vehicle when the work is completed….–our clients LOVE the way their
vehicle looks when it is fixed and they pick it up.