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Dealing with Insurance Adjusters

All the legal information on this page varies from state to state, depending on laws and previous cases, but this will give you ideas on where to start. And maybe it will be enough! Please let us know what works for you so we can share! The more success our users have collecting what’s due, the easier it will be for everyone. We are NOT dispensing legal advice. Please check with an attorney for information relevant to your state and situation.

1. You Don't Have To Talk To the Adjuster.
The only rights the adjuster has before the repairs are complete is to decide at the beginning whether or not to total the vehicle. Once the decision is made to repair the vehicle you do not need to discuss anything with the adjuster. Courts continue to rule that the body shop is the expert in what repairs are necessary and what parts and materials need to be used. The fact that the industry discusses these issues with adjusters is historical, and has no basis in business law. This conversation can be cut short in many ways. One shop owner just refuses to let his workers and the adjuster talk to each other at all. Another way is to say that your shop staff needs to discuss something with you and you need to go right now.

2. When The Adjuster Objects
If the adjuster declines to pay the full amount of the PaintEx invoice, asks the adjuster to check any items he thinks are inappropriate. You can then look at the list and if the adjuster marked a few items you might decide to let them go. The adjuster then usually agrees to pay the rest. This is usually easy the first time. The adjuster then gets beat up in the office because he paid more than the company wanted him to so the next time he has a car in your shop he puts pressure on you. Stand up to the adjuster. You have your PaintEx traveller that shows exactly what was used in the repair. As long as you have PaintEx to show in detail what items went into the repair and your charges are reasonable, then courts have been backing the shop owners, even if the calculated rates are above the going rates paid by the insurance companies. In one New York case the going insurance rate was $48, the body shop charged $68, and the judge held that it was reasonable.

3. Two Methods to Collect What’s Due from the Insurance Company
3a. Assignment of Proceeds Method*
*Always get an Assignment of Proceeds from the owner. You should make it part of your standard paperwork.
The Assignment of Proceeds is the key to having legal standing with the insurance company. The Assignment of Proceeds form is a simple document that gives you the right to collect directly from the insurance company. The policy is a contract between the owner and the insurance company, and without the assignment you have to sue the owner, and you don't want to do that.

Here’s a sample Assignment of Proceeds:
I hereby authorize [body shop name] to collect proceeds on my behalf for covered services rendered by them. I also request that all payments from the insurance company be made directly to them. I certify the information I have reported on my insurance coverage is correct. I further authorize the release of any necessary information to the insurance company for this or related claims. Signed: [car owner]

3b. Letter from the Owner to the Insurance Company
Dear [Name of Insurance Adjuster & Company]
I have been informed that you are not going to pay the full cost of repairing my car. Please explain in writing which items you are not going to pay for and please point out where in my policy it is written that each item is not covered.
Several years ago a friend of mine had this happen to them. They hired an attorney and they sued for something like "Breach of Contract." I do not want to go down that road, but I will if I have to.
Please respond immediately in writing only.
Sincerely,
[car owner]