More Shops Billing for Total Loss Processing

Dec. 14, 2023
More shops are being reimbursed for the steps involved in processing total losses, according to the most recent "Who Pays for What?" survey.

More shops are being reimbursed for the steps involved in processing total losses, according to the most recent "Who Pays for What?" survey by Collision Advice and CRASH Network.

“Because the process has continued to become more complex and time-consuming, shops are increasingly billing for the time they spend processing total losses, and rightly so,” shop consultant Mike Anderson of Collision Advice said. “Of course, some insurers are pushing back. In some cases, insurers have turned to using bill collection agencies in an attempt to go after shops after-the-fact to recoup amounts paid. While the industry continues to discuss the best way to bill for this, from a legal perspective, shops should have an attorney review their authorization forms to ensure they are protected.”

In the most recent “Who Pays for What?” survey, only 7% of shops said they never seek to be paid for total loss processing. That’s down from 14% a year ago, and far below the 30% of shops that never billed total loss processing fees in 2015. The percentage of shops regularly being paid for total loss processing by the eight largest U.S. insurers is also increasing. Eight years ago, just 46% of shops said it was something for which they were paid “always” or “most of the time” when billing for total losses, but today 75% of shops say they are.

“Rather than simply billing an ‘administrative fee’ for this work, we are seeing shops itemizing the steps involved, such as a repair plan fee, disassembly fee or OEM research time,” Anderson said. “With 93% of shops regularly billing for this added work, it will be interesting to watch how AI impacts total loss processing, identifying total loss vehicles earlier in the process, possibly avoiding many of these fees at the shop, as well as storage charges.”

The final “Who Pays for What?” survey for 2023 recently closed. It asks shops about “not-included” repair procedures related to scanning and calibration of vehicle systems, as well as how shops are billing for shop supplies and aluminum repair. Download previous survey results here.

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