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Negotiating with Insurance Companies

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As an auto body shop owner or manager, you may not consider negotiation skills a critical part of your job description. Not so for Beth Wilson. The owner of Thurston’s Plus Autobody in Emporia, Kan., is a self-professed “bulldog” when it comes to negotiating the best prices for insurance claims. After realizing she had written off nearly $5,000 on insurance shortages during her shop’s first year in business, Wilson made it a priority to ensure she received accurate and thorough estimates from insurance companies. Now, she reads those estimates line by line, double-checking details such as sales tax, labor rates, caps on paint and materials and markups. Her diligence often ends up securing her $200 to $500 supplements. “Yes, it takes time and intestinal fortitude,” says Wilson, whose shop is 3,600 square feet and supported by 6 full-time employees, “but it’s worth it.”

WHAT TO CHECK

Wilson is meticulous when looking over estimates. “Basically, I review our estimate and a version of the insurance company’s. You have to match it exactly—every labor time, every part, every part price—because a supplement is required for a quality repair beyond their original estimate.”

The work is tedious, but she isn’t deterred. “If it’s a $10,000 hit, it could take an hour to match,” she says. “If it’s a smaller hit, it could take a few minutes. Is it worth a possible $100 more? You bet.”

While checking insurer estimates, Wilson typically finds inaccuracies or missing items that could add up to 5 percent of the total estimate. “There are a couple of things that can cause you problems,” she says. “Sometimes adjustors may be inexperienced in automotive repair. When you’ve got an inexperienced adjustor, they’re not going to know how to use all the P-pages or all the required functions, so you’re going to get a short sheet.”

To alleviate this problem, she’ll check to be sure small details such as hazardous materials, corrosion protection and Freon are included on the estimate.

Seasoned estimators can also miss things. “You get company guys who have been doing this a very long time, and they’ll leave off required operations,” Wilson says. “They may just be in a hurry that day, or they may just be doing what their company tells them to do.”

“Documentation is key. You have to look at your estimate as your communication to the insurance company.”
—Beth Wilson, co-owner, Thurston’s Plus Auto Body

Wilson recommends that shops watch out for these things when reviewing estimates written by insurance companies. “Some shops are too lax. They’ll think, ‘It’s only $100.’ They’ve let the situation proliferate by not being accurate.” A good way to help curb inaccuracy is to be familiar with more than one estimating system, Wilson suggests. Doing so will help you intelligently compare different labor rates and parts prices listed in each system.

SMART NEGOTIATING STRATEGIES

Wilson has developed a few important strategies to get the most out of her negotiations with insurers. Here, she shares her tried-and-true tips for garnering the best prices for insurance claims:

Write your estimate first. “If you don’t write your estimate first, you’re letting [the insurer] set the standard. If you know they’re coming, write the estimate before they get there,” Wilson advises. “If you hand them a prepared estimate, they will try to reach that goal or standard instead of working away from it.” This will save both parties a lot of time negotiating later.

Be diligent about documenting. Yes, being meticulous can be a pain, but that’s how you get proper payment. “If my estimate is $2,100 and theirs is $1,800, I can’t just say, ‘Yours is $1,800 and mine is $2,100 so I need the extra $300,’” she says. “Insurers won’t pay it without documentation. You have to look at your estimate as your communication to the insurance company. Being able to successfully supplement is about documentation.”

Keep your cool. If things aren’t going your way, stay calm. “You can’t take [the situation] personally,” Wilson says. “You have to approach it logically.” Avoiding an argument is important. “Negotiating isn’t about ‘we’re right and you’re wrong.’ It’s about helping the customer through an unfortunate situation. You want to approach [the insurer] with information, documentation and logic.”

Be honest. “Don’t lie to the insurer,” she cautions. Doing so just sets you up to get caught, and then your credibility is shot. Plus, it automatically puts the insurer on the defensive and makes them more skeptical. Your objective is to get the insurance company to trust you and be willing to hear you out.

“If you approach them honestly and with accuracy and documentation on a consistent basis, that builds a relationship of trust,” she says. “You get a lot further with that type of relationship.”

Stand your ground. Being assertive will get results. “If you don’t ask, the insurance company is never going to say yes,” Wilson says. Sometimes you have to get right to the point. “I’ve asked some adjustors, ‘Would you want your car fixed that way?’” she says. Putting them in the customer’s shoes often does the trick. If that fails, ask to speak with someone else about the estimate. “If it becomes a situation where the estimator feels like they’re writing the check out of their personal account, and you think they’re being unreasonable, ask for a supervisor,” Wilson advises.

Be amicable. If it seems as if the insurance adjustor really has it out for you, take a minute to evaluate the situation. “If you’re the only one doing the negotiations and there is one guy that is always arguing, ask yourself why,” Wilson says. “Maybe when he first came in, you were having a really rotten day, and his first impression of you was [unfavorable]. Now he’s stuck with that impression.” Affability will get you a lot further than animosity.

BETTER BUSINESS

For Wilson, negotiating with insurance companies has become standard operating procedure at her shop. “Why should anyone assume that some of that work should be free? If required work is done, it needs to be billed, and it needs to be paid,” she says. “I can’t just consistently write off hours and parts discrepancies and stay in business. There’s nothing illegitimate about asking to be paid for things you did. If it takes me 10 minutes to look over an estimate and recoup $50 on a parts price increase, I’d be insane not to do it. Your bottom line is going to look better. Isn’t that why we’re in business—to do a good job, to make money and to be successful?”

While she doesn’t attribute the shop’s success solely to her ability to negotiate with insurers, she does know it’s had an impact on their numbers. “Over our first four years, our gross sales have almost doubled. We’ve experienced significant growth.” She says it’s all about having foresight: “It’s a lot easier to be proactive than to be reactive.”

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