Promoting preferred body shops is standard procedure for many insurance companies. If you are insured by one of the insurance companies that has preferred body shops, you are already the prime target for this trap.
Insurance companies negotiate with body shops. They will offer the body shop a large amount of claims work. The body shop must agree to do the work for lower negotiated labor and parts pricing. Body shops look at the deal and see that even though their profit margin might be lower per car, they will get more business.
The body shop will usually have to agree to use cheap aftermarket parts, which are of inferior quality to the Original Equipment Manufacturer (OEM) parts. OEM auto parts have to pass strict inspection with the US Department of Transportation to be installed on a new vehicle. Aftermarket parts do not undergo such inspections. They might fit your car, but are arguably of lower quality than OEM parts.
It's a great deal for the body shop, as they get more business. It's a great deal for the insurance company, as they lower claims costs.
The insurance company will tell you that if you agree to have your car repaired in their preferred body shop, they'll guarantee the repairs, and make the repairs happen quicker.
But just because your car LOOKS good after the repairs does not mean that all of the identical repairs were done to return your car to its pre-loss condition. In many cases, the body shop cuts corners with the encouragement of the insurance company.
So, who is in the trap?
The policyholder who has an automobile claim after a wreck is in the trap! Your car may be less safe after repairs using aftermarket parts, and certainly will sustain a drop in value after the repairs.
Here's the Escape Strategy
There is NOTHING in most car insurance policies that forces you to accept the preferred body shop of your insurance company. Check your policy to be sure.
After the wreck, insist that the wrecker tow your car to a body shop of your own choice. If you do not know a reliable body shop, insist that they tow the car to the closest dealer of your car's make. For example, if your car is a Toyota, have them tow it to a Toyota dealer.
Have your chosen body shop write an estimate, using only original manufacturer's parts.
The insurance company's adjuster or auto appraiser can come to the body shop of your choice to write his estimate. Make sure he gives you a copy of his estimate.
Once you have seen both estimates, insist that the estimate using original manufacturer's parts be used. By doing this, you can be certain that your vehicle will be repaired to "like kind and quality" to its pre-loss condition.
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