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ASK
MIKE
“What Do I Do When an Insurer Won’t Pay Me for What I Want or Need?” For our newest regular feature, we welcome industry legend
and former Virginia-based shop owner Mike Anderson (Collision
Advice) to discuss some of the collision repair community’s biggest questions and concerns. This month, we tackle the huge topic of insurers refusing to fully compensate a shop for the services it
provides. We also dive into some additional (but related) subjects as the conversation carries on. We at Hammer & Dolly hope you find
this following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a subsequent issue.
Hammer & Dolly: Let’s say someone stood up in one of your seminars and asked you, ‘What do I do when an insurance
carrier won’t pay me for what I want or need?’ That’s a pretty big order to fill; do you care to give it a try?
Mike Anderson: Sure! The first thing you need to do if you’re a shop
Proceeds and you take it to court. However, some states will not reimburse you your legal fees. Every state is going to vary.
Understand that while you may win the battle, you may lose the war in the long term. I’m not discouraging people from doing this,
because everybody has to make the best business decisions for
themselves. But if you go to court, understand that they’re probably going to start steering against you very heavily. You may lose; they may have deep pockets where they can drag it on forever. I’ve
known people who’ve gone to court and won and done very well, and I’ve known other people who’ve gone to court and lost. There are pros and cons to that. In my mind, that might be a last resort. Obviously, trying to go up the chain of command at the
insurance company would be the first thing to try. The second option would be to try to utilize the arbitration clause. There are companies that will help you to do that.
in this kind of situation is make sure you’re prepared in advance. You
H&D: When we’ve talked to shops over the years on insurer
advance before the insurer ever comes out, and then you present
the customer as the last resort. Based on your experiences as a
need to make sure you have all your documentation prepared in
that documentation to them. If they say ‘no,’ you have a couple of options. The first option is to go up the chain of command to their
supervisor to see if you can appeal to them. At that point, you either
get a ‘yes’ or a ‘no.’ A second option is to make a business decision
payment issues, they have traditionally viewed balance billing former shop owner and on feedback you’ve received from the
facilities you consult with on a regular basis, what do you see as the benefits and disadvantages of this practice?
to do the items that won’t be paid for for free. Another option is to
MA: When I owned my shops, balance billing was my first option. It
somewhere else, or you can do the repair and educate the consumer
it to the customer and how you prepare them for it. When I had my
refuse the repair and tell the customer they have to take it
about why you need to do what you do and charge them the
difference.
Most states have something called an arbitration clause, which
is where an arbitrator comes out to the shop and makes a ruling that
the shop and insurance carrier agree to abide by. You also can take
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legal action where you can get the customer to do an Assignment of
April 2017
always worked well for me. I think it comes down to how you present shops, I had a letter that we gave to the customers at the front end. I
would present it to the insurance company as, ‘This is what I need to
be paid for. If you don’t want to pay for it, let’s just agree to disagree.’ I would charge the customer the difference and move on to the next
one. What I will say is that you don’t want to cut your nose off to spite