Knight: Don't Get Your Toes Wet!

The relationship between auto body shops and insurance companies has always been complex. It's like walking a “slippery slope.” We call it “getting your toes wet,” and who wants to dip their toes in an alligator-infested pond? While some shops have forged strong relationships with insurers, others have found that dealing with insurance companies can often be frustrating, time-consuming, and even detrimental to their business. And we have found that it's only getting worse! This article explores why auto collision shops might want to reconsider engaging directly with insurance companies to resolve claims and instead focus on educating and empowering their customers to navigate the insurance process independently.

The Challenges of Working Directly with Insurance Companies

Insurance companies, by their very nature, are in the business of managing risk and controlling costs. This often means that when it comes to auto collision repair shops, they are looking to minimize expenses. But for shops, this cost-cutting can lead to several challenges:

1. Pressure to Use Cheaper Parts: Insurance companies may push shops to use rebuilt, remanufactured, aftermarket or used parts instead of original equipment manufacturer (OEM) parts, which can compromise the quality and safety of the repair.
2. Reduced Labor Rates: Insurers often dictate labor rates that may not reflect the true cost of the skilled work required to properly repair a vehicle. This can squeeze margins and force shops to cut corners.
3. Delayed Payments: Dealing with insurance adjusters can be time-consuming and payments may be delayed as claims are processed and negotiated. This can disrupt cash flow and create financial stress for the shop.
4. Restricted Repair Methods: Insurance companies may specify certain repair methods that are less costly but not necessarily the best or safest options for the vehicle. This can put shops in a difficult position, balancing the need to satisfy the insurer with the desire to do right by the customer.
5. Customer Relationship Impact: If a shop is seen as too close to an insurance company, customers might feel that their best interests are not being prioritized. This can erode trust and damage the shop’s reputation.
6. Demand on Your Staff: Shops are constantly bombarded with insurance company requests and demands. This is a huge demand and burden on our already overworked staff members.
7. Rude Conversations: Lets face it; unless you give in to insurance company demands, they can be downright rude! This demoralizes your staff and causes unnecessary stress.

The Benefits of Coaching Customers

Rather than acting as a middleman between the insurance company and the customer, auto body shop owners and operators can focus on empowering their customers to take control of the claims process. Here’s why this approach can be more beneficial:

1. Customer Empowerment: By educating customers about their rights and the claims process, shops can help them make informed decisions. This not only builds trust but also positions the shop as a customer advocate.
2. Transparency: When customers are directly involved in the claims process, they are more likely to understand the costs involved and the reasons for certain repair methods. This transparency can lead to greater customer satisfaction.
3. Reduced Stress: Navigating an insurance claim can be stressful for customers, especially if they feel out of their depth. By offering guidance and support, shops can alleviate this stress and create a more positive experience.
4. Better Repair Outcomes: When customers are well-informed, they are more likely to insist on the best parts and repair methods, which can lead to better outcomes for their vehicles. This also allows shops to maintain their standards of quality without being pressured to cut corners.
5. Enhanced Reputation: By positioning themselves as advocates for their customers, shops can build a reputation for integrity and customer service. This can lead to more word-of-mouth referrals and repeat business.
6. More time and energy to focus on the services you provide: Rather than wasting your time dealing with insurance claims, you and your staff will have more time to focus on providing excellent customer service and high-quality repairs.

How to Implement a Customer Coaching Approach

Transitioning to a customer-focused approach doesn’t happen overnight. Here are some steps shops can take to start empowering their customers:

1. Educate Your Team: Ensure that your staff is well-versed in the insurance claims process and understands the common challenges customers face. This will enable them to provide accurate and helpful advice. Shops must also have an in-depth understanding of insurance policy language and understand the dynamics between first- and third-party claimants. 
2. Create Resources: Develop easy-to-understand guides or videos that explain the insurance claims process, common pitfalls, and the importance of choosing quality parts and repair methods. These can be shared on your website, social media, or directly with customers.
3. Offer One-on-One Consultations: When a customer comes in after an accident, offer to sit down with them and go over their insurance policy and the claims process. Help them understand what they can expect and how they can advocate for the best repair outcome.
4. Provide Support During the Process: While you may not engage directly with the insurance company, you can still offer support by reviewing estimates, advising on the suitability of repair methods, and helping customers communicate effectively with their insurer.
5. Follow Up After Repairs: Once the repair is complete, follow up with the customer to ensure they are satisfied with the outcome and to answer any lingering questions about the insurance process. This extra touch can reinforce your commitment to their satisfaction.
6. Understand Your State’s Laws: You should be familiar with your state laws and regulations as it pertains to auto collision repairs.
7. Hire a Consultant: Lets face it; understanding these dynamics can be overwhelming and many, if not most repair shops, generally put in place what they learned from someone else at their shop. I suspect this would be money well spent. 
8. Consumer Help Sites: Use consumer help sites such as www.yourvehicleyourchoice.com, www.stopsteering, www.stopdrp, which can be valuable resources to validate how you coach your customers and validate the information you are providing. 

Avoid Practicing Law 

Many states have laws in place that read something like this: “You may not negotiate claims unless you are a licensed attorney or licensed public adjuster (paraphrasing) so negotiating and resolving claims may be illegal and also providing recommendations or information to claimants may be illegal and both may be construed as legal advice.” 

I highly recommend that you seek the advice of an attorney or industry consultant on how to “coach” customers using your personal experiences prior to implementing these practices to avoid legal issues. 

Conclusion

While most shops are tempted to engage directly with insurance companies to streamline the claims process, we find this is rarely successful if either the shop or consumer does not give in to insurance company demands. Auto body shops should consider the long-term benefits of coaching their customers instead. By empowering customers to navigate the insurance claims process themselves, shops can maintain higher standards of repair quality, build stronger customer relationships, and enhance their reputation in the community. In a competitive industry, the shops that prioritize customer education and support are likely to see the most success.