Menefee: When Claim Negotiations Fail
It takes a lot for me to get riled up when it comes to insurance adjusters and insurance companies. I pride myself on being able to work with them and come to terms for what I need and what my customer needs. I feel like I have given my team those same tools. We know how to work around the insurance companies’ restraints in our area, for the most part, but every now and again we run into a situation my staff can’t handle. They know calling me in to deal with a situation with an insurance company or adjuster is a last resort. So what happens when you just cannot come to terms with the adjuster?
You have two options: Either don’t handle insurance repairs or fight it out.
There is an argument to be made for not handling insurance repairs and just doing a correct and accurate repair and billing the customer. Let the customer deal with getting fully reimbursed by the insurance companies and have them deal with that headache. Honestly, I would love to do that but I do not think my particular market could support that business model. Maybe one day I’ll get there but right now it is not a feasible option for my shop.
So I’ve chosen the fight it out option and I hate every minute of it when it comes down to it but sometimes there just isn’t any other choice when all of our charm, reasoning and negotiating skills don’t prevail. When I am at my wit's end and I feel like nothing else will work, I use different variations of this letter that a former Department of Insurance employee helped me draft.
[Insurance Company Name]
[Year, Make, Model & VIN]
[Date of Loss]
Insurance policies require the insurer to restore the vehicle to pre-loss condition. The items and repairs necessary to restore [Customer Name]’s vehicle to pre-loss condition have been identified and completed.
However, [Insurance Company] and [Adjuster’s Name] have refused to pay for the repair although the repairs and costs were identified in the repair software required by [Insurance Company] and through the vehicle’s manufacturer and were necessary to return the vehicle to pre-loss condition.
The declination of payment for repairs necessary to restore the vehicle to pre-loss condition appears to be a violation of Section 541.060, Unfair Settlement Practices, of the Texas Insurance Code. [Insurance Company] has failed to attempt in good faith to effectuate a prompt, fair and equitable settlement when the insurer’s liability is clear.
Additionally, [Insurance Company] intentionally and knowingly secured performance of the repair service by agreeing to restore the vehicle to pre-loss condition as stated in their Insurance Policy and then refused to make full payment for repairs necessary to restore the vehicle to pre-loss condition. [Insurance Company] has failed to make payment with 10 days of notice demanding full payment. The above acts appear to constitute Theft of Service as noted in Section 31.04 of the Texas Penal Code.
While we prefer to resolve this matter equitably, we reserve the right to pursue action under the Texas Penal Code and the Texas Insurance Code, Unfair Claims Settlement Act.
Please remit the amount identified on the attached invoice within ten days receipt of this letter.
Remember this letter was drafted being specific to Texas, where I am located. You can decide how much, if any, of this to use. Before you use any letter like this you want to verify the verbiage is correct and have your attorney review it to ensure you are not opening yourself up to liability.
I use this letter sparingly knowing that I open myself up to the insurance company or insurance adjuster possibly retaliating against me and making my life more difficult when it comes to claims negotiations. For me though there is only so far you can push me before I draw a line in the sand and stand and fight and when I do some version of this letter is used.
This may not be your cup of tea on how your shop handles a situation where an insurance company or insurance adjuster is being unreasonable, but this has been a tactic of last resort for our shop that we have used with a large degree of success.