I think it is pretty much the consensus that we all get irritated when we request payment for a service from the insurance company and they only want to pay a certain amount and it’s less than what we requested. Then another shop requests payment for the same service, but the service was provided by an outside company and the insurance company marks it down as a sublet repair and they pay the requested price with no issues. Personally, I find this super frustrating and unfair. They are willing to pay a “sublet” repair company for services provided at the cost the repair company is requesting but the body shop will only be paid the current insurance rates.
Another pet peeve of mine is insurance companies and how they pay markups. Some adjusters will automatically pay markup on sublet repairs and some won’t. Some will pay markup on towing but not pay markup on recalibrations. From mount & balance to calibrating systems it is always hit or miss if the insurance company will pay markup on the services. And let’s be realistic—they should. It is true we are not providing the service, but we are making the arrangement for the service, we are making sure the service gets done and that takes the time of employees that we are paying.
I think one of my biggest irritations though is parts procurement and the insurance company telling us where to buy a part and then not wanting to pay for delivery fees or time to go and pick up the part. I have one insurance company that loves to get salvaged parts from a salvage yard on the other side of my city. It is a good 45-minute drive there and back and they want to buy parts there because they can save an extra $50 or $60. If I decided to buy from that salvage yard, I would be wasting an hour and a half of an employee’s time plus gas and wear and tear on one of my shop vehicles and the insurance company would not reimburse me for these expenses. Parts companies are also starting to charge delivery fees where they did not in the past and the insurance companies don’t want to pay them.
So how do we combat all of these issues? My answer is to DBA your company. Now hear me out, this is not going to be as much work as you may think. I paid a $29 fee down at my county courthouse to DBA my company with another business name and used the physical location for that DBA. We already used Quickbooks for our accounting purposes but we were not using the invoicing section in Quickbooks because we use another program for that. We set up a different profile in Quickbooks with our new DBA and started invoicing anything that is a sublet repair through our new DBA. The DBA is providing all sublet repair services to our company. The insurance company does not need to know that our DBA only uses “subcontractors.”
We invoice anything that is a sublet repair through our DBA. We provide a detailed receipt for the service, just like the sublet repair company provides to us. The difference is that our invoice has the markup built into it for the insurance company. The insurance company does not need to know what I pay my subcontractors (sublet repair companies). That is none of their business—that is between myself and the other companies I do business with and the rates I negotiate with them. We invoice through the DBA all repairs that are marked as mechanical on an estimate. We invoice through the DBA all calibrations, towing, mount & balances, alignments and anything else we may not do in house.
We also use the DBA for shipping and delivery invoices and also for in-stock items. If an insurance company wants me to buy a part at a company that does not deliver and we go and pick it up, then we provide an invoice for shipping of the requested part. Also, sometimes we have parts that are in stock in the shop but for which we don’t have an original invoice. We all have them, random parts that we couldn’t return or there was some issue and now we have an inventory of random parts. We use the DBA for invoicing of those parts when we use them on a repair.
My general recommendation is if you start to use this method then break in the adjusters slowly with it. Don’t just send them six invoices from your DBA on your next claim. Start off with one invoice from the DBA on your next claim and build on that. Get the adjusters used to seeing invoices from your DBA and you will get a lot less push back. If you have noticed the common theme here and with most of my articles is DOCUMENTATION. If you provide the insurance company documentation, for the most part they will pay you. Sometimes you just need to be creative in how you present that documentation.
