10 Things Your Insurer Won’t Tell You
6. “…and even if it isn’t.”
Ever hear of “diminished value”? The insurance companies are betting you haven’t. Even if your car is repaired after an accident, there could be flaws in the repair process. Either way, your car’s bound to be worth less in the resale market, and your insurance company is obligated to pay you the difference.
“By just raising the issue of diminished value before the car is repaired, consumers can get a much better deal,” says James Lynas, president of Wreck Checks, a service that will examine your car after it’s been repaired and tell you whether it’s lost some of its value. If it has, you can file a supplemental claim to recover the difference. (The service is available in 34 states; call 770-956-8700. Fees range from $75 to $150.) Lynas says that while insurance companies may try to fight you on it, diminished-value claims have been paid out in every state and by every major insurance company.
When Jay Archer’s Lexus had $9,300 worth of repair work done after a hit-and-run accident, a Wreck Check assessor told him it had lost $3,964 of its value. His insurer, Geico, denied the supplemental claim on 10 separate occasions, Archer says, but through pleas, demands and arguments — “I brought all my letters down to the Geico office in Dallas and had them stamp the date and who received it” — Geico ultimately backed down. In the end, it wrote him a check for the full amount.
7. “You need a lawyer.”
Insurance companies don’t like to deal with lawyers, but few go to the lengths that Allstate does. Since 1993 the company has been sending brochures to its customers who’ve been in accidents, advising them that they don’t need a lawyer. Allstate even tells this to people insured by other companies after they’ve been in an accident with an Allstate customer. Fourteen states have complained about the brochures. The company claims it’s a freedom of speech issue and still sends the brochures out in every state but Connecticut and Massachusetts.
Stacey Adkins of Parkersburg, W.Va., had more than $7,000 in medical bills following an accident in which the other driver was at fault. She didn’t get a lawyer because Allstate (which insured both drivers) advised her not to. Its offer? Just $1,000. Allstate also demanded access to her medical records and entered some of that information into a national database, where other insurers now have access to it.
Adkins hired an attorney who won her a settlement of $12,000 for her injuries and is now suing Allstate for invasion of privacy, for lowballing on its initial offer and for unlawful practice of law. Allstate will not comment on specific cases.
8. “Our body shops work for us, not you.”
Most insurers have a list of body shops that they prefer to use through what’s called a “direct-repair program.” It’s similar to managed care, in that you can take your car elsewhere but your insurance company might not pay the full cost of repairs if you do. The catch is that these direct-repair body shops get on the list by keeping their costs low — sometimes spending less time on repairs, using cheaper parts and overlooking damages that only an expert could spot. State Farm’s Service First program even includes a gag clause that prevents shop owners from talking to customers about their cars until they’ve cleared it with State Farm first. And because the companies hold so much clout, many shops can’t stay in business unless they stay on those preferred lists.
8. “Our body shops work for us, not you.”
Most insurers have a list of body shops that they prefer to use through what’s called a “direct-repair program.” It’s similar to managed care, in that you can take your car elsewhere but your insurance company might not pay the full cost of repairs if you do. The catch is that these direct-repair body shops get on the list by keeping their costs low — sometimes spending less time on repairs, using cheaper parts and overlooking damages that only an expert could spot. State Farm’s Service First program even includes a gag clause that prevents shop owners from talking to customers about their cars until they’ve cleared it with State Farm first. And because the companies hold so much clout, many shops can’t stay in business unless they stay on those preferred lists.
interesting and good to know.