Which of the following statements are not true?

1.) Fear is a motivating factor in purchasing auto insurance. Fear of loss of value in the event of damage and fear of punishment since most states require it.
2.) Policyholders are afraid of what might happen during the claim settlement process.
3.) Policyholders fear even filing a claim because of the potential for premium increases, claim delays, claim denials, even policy cancellations or simply fear of making their insurance agents or insurance companies mad at them.
4.) Insurance companies use this fear to intimidate policyholders during the claim settlement process.
5.) This is a primary reason that insurance companies and their affiliates need to be regulated especially regarding the claims settlement process.
6.) Policyholders have the right to choose the repair facility that works on their vehicles, the right to be reimbursed for fair and reasonable prices for said work and the right to assign their post loss duties, benefits and proceeds to third parties.
7.) Insurance companies have the right to negotiate fair and reasonable rates with repair facilities.
8.) Insurance companies do not have a right to dictate repair facility prices or to use undue influence such as threats to boycott or steer policyholders away from repair facilities or even threaten to delay the claims settlement process.
9.) It is illegal for insurance companies to use undue influence such as threats, intimidation or coercion.
10.) Insurance companies have a right to contract with third parties to administer the claims settlement process.
11.) Policyholders and repair facilities have the right to demand fair and unbiased treatment during the claims settlement process.
12.) It is unfair and unethical to subject a policyholder to filing claims with a biased third party.
13.) It is unfair and unethical, actually immoral, to require a repair facility to communicate with a biased third party during the claims settlement process especially if the third party is an actual competitor or even affiliated with a competitor.
14.) It is illegal for two or more competitors to fix prices to gain a competitive advantage (Sherman Antitrust Act)
15.) It is illegal for two or more competitors to join or participate in a network of competitors if the network participation has the effect of fixing or controlling prices.
16.) It is illegal for any third party insurance claims administrator to operate a network of two or more competitors when the network participation has the effect of fixing and or controlling prices to be charged by the network participants.
17.) Because repair facilities do not have the same overhead, number of employees, level of experienced employees, labor rates, business models etc., it is unreasonable to believe that one price will be the same at all repair facilities.
18.) Business models that violate these tenets are illegal and immoral.

7.) Insurance companies have the right to negotiate fair and reasonable rates with repair facilities.



#7 is incomplete. Insurers may not negotiate rates with repair facilities until or unless they choose to repair the property, if that option is within their rights contained in the policy contract.

Otherwise, they are not in a legal position to make an "end run" around the policyholder making ANY decisions that may effect the policyholder's indemnification amount without taking any legal liability for those decisions, when they most certainly directly effect either the repairs to the property, in scope, method, value, or quality, or the decisions of a repairer attempting to alter his expert knowledge of repairs to attempt to work within ANY parameters set forth by a third party who is NOT party to the contract of repair.

Insurers have the option to contract for the repairs. They have not (since the 60s according to research), are not, and likely will no do so, due to the liability incurred by doing so. Insurers are experts at mitigating risk. That is their function, and they profit by doing so. Shifting risk and liability away from themselves is their main goal and how they make a profit.

Apply this knowledge when reading the whole list, and see how much more injurious what JB wrote becomes.

Also, ALL third parties are biased, so long as they exist to implement the insurers cost containment parameters upon repairers, while the insurer is not contracting for repairs to the property. In fact, any TPA that does so, having shops, member shops, or simply the cost parameters set forth by an insurer in any fashion, makes the TPA AND the insurer the repairers direct competitor.

Simply put, the TPA, via the insurer dictates, markets the insured in the claims process either to a preferred provider, a willing provider, a member shop, or an "allowed cost" amount that makes the TPA and/or the insurer the direct competitor of the repairer.

JMHNLO and HTH

Sorry Mark, I beg to differ. #7 is a complete statement. Read it again. I didn't say dictate prices, I said negotiate prices. The repair shop and the insurer are not competitors, so they have every right to negotiate prices. Shops do not have to accept insurance company pricing (offers) but they can if they want. It is only when the insurance company uses undue influence and pressure by threatening delays in claims processing and/or boycotting by trying to steer (pressure) their policyholders to go to a different shop that violations occur.

Networks, on the other hand, have competitiors combining to fix prices which is a per se price fixing violation.

Insurance companies do not have to wait until a loss occurs to negotiate prices. Repair facilities do not have to negotiate prices or accept prices forced upon them but they can if they want (just not by joining a network that has the effect of fixing prices).

I find it particularly offensive when insurance companies include in their DRP agreements the requirement for the member shop to force the policyholder to sign a form requiring them to submit to insurance company dictated prices. I can see why the insurance companies do it, but I feel like it is changing the rules in the middle of the game. I would never sign such an agreement. Repair facilities should be advocates for the policyholders that trust them to work on their vehicles. There are some things included in DRP and network participation agreements that should be scrutinized by the authorities, in my opinion.

Insurance company and TPA lobbyists have put lipstick on a pig. Business models that are illegal should not be tolerated.......

The insurer is not in the contract of repair, and does not have the right to negotiate the price for the insured.

There are two separate contracts.

the vehicle owner has a contract with you for the repair, and another separate contract with
the insurer to indemnify their loss. The contract of insurance main contain a clause that allows the insurer to invoke the "right of repair" that carries along with it the liability for the repair. Insurer's are not invoking this clause when using a TPA, ask them next time you get one on the phone.






Who is the Customer?

YEAF, As I mentioned earlier, repair facilities are free to enter into contracts with insurers if they want. Insurers are free to enter into contracts with repair facilities if they want. If that happens and a policyholder frequents the repair facility, the repair facility is stuck with the pricing that they agreed to in the contract with the insurer.

Reasons for a repair facility to contract with an insurer would be to get referrals and to cut through the claims settlement red tape.

In our industry, 85%-90% percent of the time, policyholders come to our shops or ask for our shops during the FNOL so there aren't really that many referrals especially if the shop is located in the area of a Safelite shop.

I mentioned Safelite because, in my opinion, Safelite Solutions has reached a monopoly status and if the policyholder doesn't have a preference or doesn't know where to go, they get steered to a Safelite shop.

So, in our industry,there really isn't any reason to join a network and as long as the network participation agreement has the effect of fixing prices it is technically illegal to do so.

We need to demand enforcement of the law......

Shops do not have the right to negotiate directly with the insurer, unless the insurer invokes the "right of repair", which they are not doing. The fact that these contracts exist does not make them legal, and cases have been won by demonstrating "the insurer is not a party to the contract of repair". Insurers using the "controlling premium costs" excuse does not make it legal or ethical.


Your scenario of entering into a contract with the insurer behind the vehicle owners back, is neither ethical or legal. It eliminates the rights of the vehicle owner, and you are not a party to the contract of insurance for said vehicle owner.
The assignment of proceeds allows shops to stand in the vehicle owner's shoes. Insurers invoking the right of repair clause allows the insurer to stand in the vehicle owners shoes.



We agree, TPAs are evil, Insurers are controlling pricing illegally. Where we part ways is your insistence that the insurer is the buyer. Nothing could be further from the truth. These explanations seem to be falling short, not sure of any other way to phrase it, shops are to willing to give up their rights, in exchange for becoming network pets. It is time common sense trumps fear.










Who is the Customer?

YEAF, The policyholder is the customer (unless the insurance company invokes its right to repair). I have never said the insurance company was the buyer.

As for controlling premium costs, mine keep going up but the insurance company seems to be doing pretty well.

If I wanted to negotiate directly with an insurance company (and I don't) and sign an agreement to only charge their policyholders certain rates for their repairs and replacements, I could legally do that but I won't.

On the other hand, if I signed an agreement with competitors of mine that had the effect of fixing prices, then that would be illegal.

JB, please don't take my word for this. Ask an attorney.

The shop's primary fiduciary responsibility is to the party contracting with them for repairs to the property.

If the shop makes another agreement or contract that undermines that primary fiduciary responsibility, especially if it happens before the shop contracts with the property owner for repairs, and that contract can or may, in ANY WAY, effect the outcome of what the property owner is hiring the shop to do, then the shop has a conflict of interest, one that it deliberately entered into, and one that it downplayed to the property owner as harmless to them, just as the insurer did, when in fact, the opposite may be true.

The fact that some agreements set forth pricing allowances, parts usages allowances, labor allowance, OEM vs Aftermarket allowances, can all be easily seen to limit the property owners levels of indemnification, because they were all set before the property owner/insured incurred a loss. Double so, if the "HMO/PPO/Preferred Provider/Price/Part/Labor Limits and Allowances" aren't spelled out VERY clearly in the insurance contract. And they aren't, that I have yet seen.

Also, aside from asking an attorney, ask doctors or dentists or hospitals how it's worked out when they make decisions based on the level of reimbursement of the insurer instead of their medical training and experience dictate.

How will you feel when the doctor "on the list" makes surgery decisions based on what the insurer allows, rather than what he feels you need for care? Will you be OK if the doctor opens you up knowing he may be doing so for a loss? Drastic and dramatic analogy, I know, but it makes a point. Let's not forget, also, that the insurer didn't SELL an HMO/PPO plan for the consumer's car, either; they sold an indemnification plan.

Of course, you can always simply eat the differences, and PROVE to a court if you ever find yourself there, that you regularly did so, and still provided the customer the top level quality and service. But then, on the other hand, your credibility won't be very good if they believe you weren't a very smart businessman, doing work for insurers and networks at a possible loss, and regularly, in order to get referrals? See the conundrum?

And yes, the insurer and network is the shop's direct competitor, the second either of them, or both of them, begin marketing their program to the insured.

As I've said in the past, you can't have it both ways. You can't negotiate with insurers when it benefits you, and then claim harm/foul when they do so to benefit someone else.

JMHNLO

JB you have way to much time on your hands.

Please don't stop, JB.

You're closer than you think to pulling the sword from the stone.

I've just been where you're going, and found the dead end, so to speak, so I'm trying to drop you bread crumbs down the right path.

JMHNLO