Car Insurance, the New Big Brother?
Saturday July 12, 2008
Insurance companies get a bad rap. Everybody hates auto insurance until they need to file a claim, and all of a sudden they're all friends. A week later they go back to hating their insurance company. It looks like some insurers, like The Hartford, want to just skip the part where you pretend like you're friends and just stick to being hated. They have a new plan over there called Direct Repair Provider, or DRP. It's basically a network of pre-approved repair shops that are authorized to work on your car if you make a claim. Sounds innocent enough, right? It could even be a good idea, letting your insurance company find the shop and do the legwork for you. The problem lies in the future implications. If your car is sent to one of the Preferred Provider shops, you're essentially letting the insurance company repair your car. Since the repair shop is in the pocket of the insurer, who's side do you think they'll take when a repair is up for debate? I'd also be willing to bet that in exchange for the steady stream of business that will come when a shop becomes a DRP, they agree to lower rates. This can mean lower quality work and less attention to detail.
The issue is heating up in the industry, but it will be up to consumers -- the ones paying for car insurance -- to tip the scales in the direction of independent repair shops and no direct oversight by the insurance companies. If your insurer is offering these packages, be sure to think long and hard before you sign up.
The issue is heating up in the industry, but it will be up to consumers -- the ones paying for car insurance -- to tip the scales in the direction of independent repair shops and no direct oversight by the insurance companies. If your insurer is offering these packages, be sure to think long and hard before you sign up.
Read more about The Hartford and DRPs on ABRN's website. Fight for independent repair shops!
Comments
Having been in the auto body trade for 40 years and also being a customer of The Hartford for more than 10 years,I can truthfully say that:
[1] The Hartford is helping to reduce premium costs by partnering with reputable shops to provide the highest quality repairs at a reasonable price and
[2] The Hartford does not require anyone to follow their recommendation of going to a direct repair shop,they only provide the service as a convenience to the customer and facilitate a more efficient way to handle their claim and repairs.
Any independent repair shop can benefit from this by raising their standards to qualify for Direct Repair Facility status with any of a number of insurers.
I am a bit surprise with Matt’s scorn on this one. Insurance carriers have been doing this type of option for decades. It certainly is not a new occurrence. I completely agree you want to make sure that large financial institutions do what they say they are going to, (ie Washington Mutual, Indymac, etc..) but personal insurance in particular is regulated really quite tightly. If they sneeze wrong the client can make a (strong and powerful) complaint to their state insurance commissioner that if deemed a problem are FORCED to answer for. Plus – there is a strong incentive for an insurance carrier to partner with the least problematic shops, so you likely have a better shot at getting a fix done properly the first time.
Jim, thanks for the comment. It’s my understanding that if you sign up with The Hartford’s DRP program, you have contracted to participate. I can’t argue that there would be some conveniences, but I look at the insurance companies like the government. Every inch you give equals a mile in 10 years. It also opens the door to corner cutting. In some states the insurance commissioner will move against the insurance companies, but in less consumer friendly states you’ll get little to nothing from that office.
Hartford is a “preferred” provider for the monster AARP which caters to the over 60 crowd. As a member of the orginization I’m sure that there is a chunk of any premium paid us returned to the AARP. They also have other “preferred” deals. For the most part I ignore them. A few save some bucks like a senior discount on Amtrack. But that is a once in a long time that we use of rail up or down the east coast. They also have “deals” with the various Orlando tourist attractions.
Let the buyer beware. My insurance is Geico, and as shareholder I get a discount. In return I drive carefully becaue it is my money at risk. Another saving hint is to have large deductable on claims. Bank the difference so if you have a claim you have money for the deductable cost available.
We pay Insurance premiums to a Insurance company to perform a service (customer service). When a Insurance company passes these services to a Body Repair facility, this procedure should tell us one thing, that our insurance company cannot provide us with a true claims process. The Insurance companies are passing the buck to the repair facilities and at the same time requiring the repair shops to give them their profits in discounts. Not only do the Insurance companies save money on the repairs they also limit their posture in hiring new employees and training them, a huge savings. Our insurance companies are saving huge amounts in many areas with enabling other people to do their jobs while promising to steer work their way. We all know the cost is skyrocketing and so are our premiums. We should require our insurance companies to give us (the policy holder)a true claims process without a third party involvement. We want to deal with a highly trained insurance claims department that is licensed and trained to render a true customer service, a service we pay for.