Beware of shops offering to waive the deductible!
There are many good motor vehicle repair shops in Massachusetts. However, there are also some bad apples. Over the next few months, this multi-part series will discuss several scenarios that are composites of real situations that often required litigation to resolve. The purpose of this series is to arm agents and companies with information and tips to help insureds avoid fraud and get the full value of the repair paid for by their insurance company. All names used are fictional.
Scenario 1:
Mrs. Patten rear-ended another vehicle damaging her SUV. A representative of an auto body repair shop appeared at the accident scene and offered to tow her SUV to the shop. As an extra incentive, the shop’s representative offered to waive Mrs. Patten’s $500 deductible. Mrs. Patten agreed.
The shop assured Mrs. Patten that the vehicle would come out of the shop “looking good as new”. Mrs. Patten’s insurer’s appraiser appraised damages in the amount of $7,500 and sent that amount per Mrs. Patten’s instructions to the shop to bring vehicle back to its pre-accident condition. After many delays, the shop finally returned Mrs. Patten’s vehicle to her and as promised did not charge her the $500 deductible and the vehicle did look good as new.
However, it was not long before Mrs. Patten began to experience problems with the vehicle. The shop refused to address the problems. Mrs. Patten’s insurer sent an appraiser to inspect the vehicle. It was discovered that the shop, without Mrs. Patten’s knowledge, had failed to perform over $4,000 worth of the repairs paid for by Mrs. Patten’s insurer and had pocketed the excess insurance money for itself.
Although Mrs. Patten thought she had saved $500, she was cheated out of $4,000 worth of repairs. For example, although a shiny new bumper cover was placed on Mrs. Patten’s vehicle, the shop failed to replace the damaged energy absorbers within the bumper which are designed to absorb force in an impact and the front apron which is a structural component designed to collapse in the event of a crash to absorb the force of the impact.
Tips to Avoid this Scenario
Insureds should be very wary of shops that offer to waive the insurance deductible. By law, all auto insurance policies carry a deductible between $300 and $1,000. It is against the law governing motor vehicle repair shops for a repair shop to waive the deductible.
Failing to charge the deductible is also per se violation Chapter 93A, the Massachusetts consumer protection law. An offer to waive the deductible should put you on alert.
To make up for the loss of the deductible, unscrupulous shops fail make all of the insured repairs and keep the extra insurance payment for themselves. As an insured, you may not know which repairs were not performed and they could be ones that don’t impact the “look” of the vehicle but could impact its safety or performance.
Agents and insurers can warn their consumers to avoid shops offering to waive the deductible. Insurers can also conduct post-repair audits when problems arise.
If any of our readers have stories about repair shops that are bad apples (or good apples!), I’d love to hear them. Feel free to contact me via the links below:
Kara Larzelere
Attorney | ForbesGallagher
Kara Larzelere joined ForbesGallagher in 1994 and concentrates her practice in insurance and corporate matters. She advises insurance companies and insurance agencies on a variety of matters of concern including issues of regulatory compliance, insurance coverage, liability, employment law, organizational structure and acquisitions.
In addition, she has briefed over a dozen appeals before the Massachusetts Appeals Court and the Massachusetts Supreme Judicial Court on varied issues including fiduciary duty law, consumer protection, and indemnification.
