Anderson: Help Them Decide

Changing consumer behavior, rising insurance premiums, and advances in technology are reshaping how collision repair shops should interact with customers, particularly around the decision to file an insurance claim versus paying out of pocket.

One of the newsletters I subscribe to is from technology analyst Shelly Palmer. In a recent article, he was talking about Amazon’s “Help Me Decide” feature, which uses AI to guide consumers through complex purchasing decisions. And it made me think of how repair shops approach conversations with vehicle owners.

Although many shops’ customer pay is in the single digits, I’ve seen reports showing some shops’ customer-pay work is currently as high as 25% or more. To clarify, this is for repairs with no insurance involvement. This is not about customers paying things the insurance carrier will not; this is strictly for customers paying for the entire repair bill. There are several reasons for this trend, including consumers carrying lower limits, often far below the cost of modern repairs. At the same time, they may be reluctant to file a claim, fearing their premiums will increase.

To approach this work correctly, it’s important to frame the conversation appropriately. Often, when a consumer calls a body shop, it’s a bad habit for the person answering the phone to ask, “Did you get an insurance claim?” “Did you call your insurance yet?” That could be perceived by the consumer that you don’t do customer-pay. Instead, I would advise taking a more consultative approach. Rather than guiding customers toward or away from filing an insurance claim, we need to give them the tools or resources to make an educated decision, or "Help Them Decide."

There are multiple factors to consider. If they file a claim, will their premiums go up for the next three to five years? To dig into this, I interviewed some insurance agents. One pointed out to me that some insurers have accident forgiveness, a “Get out of jail free” card, so to speak. Another question might be, “Were you cited for a traffic violation as a result of this accident?” That could make their premiums go up even more. Do you have a teenage driver in the household, or will you soon? What if someone was injured in the collision? If there is also a bodily injury claim, there’s no question that you need to go through insurance.

Many situations fall into a gray area where consumers fear long-term financial consequences. Existing online insurance comparison tools, such as from Zebra Insurance or GetJerry, can oversimplify these decisions and fail to account for real-world complexity. The three agents I spoke with said they could advise their clients on what the impact (if any) would be to their insurance premium, and that the inquiry itself would not harm their insurance claim history. If you are calling the company’s main claim number, I cannot speak on that.

I’ve begun developing a “Help Me Decide” class and tool, aided by AI, with the goal of helping consumers weigh factors such as deductibles, coverage limits, impact on premiums, life stage, and risk tolerance. The emphasis is not on giving definitive answers, but on educating customers so they can make informed choices.

As you approach customer-pay work, be aware that data shows 44% of consumers will price-shop when paying out of pocket. You do not want to compete on price, so you have to find a way to approach the customer. A lot of customers still think of prices from decades ago and still think a bumper is a $300 or $400 repair. You have to spend more time educating when you write an estimate to educate a consumer why it is so expensive, such as ADAS calibrations needed for a bumper hit.

Financing options are also becoming increasingly important. A recent Payments Intelligence report shows that 43% of consumers said buy-now, pay-later options influence their choice of merchant. CCC has rolled out a relationship with Sunbit, a plug-in where the consumer can file for financing.

What should your customer-pay volume be? When I look at my private clients’ data, it’s around 25%. I would say if you’re consistently below 16 to19%, you may be unintentionally discouraging customers through “insurance-first” conversations. I would challenge the belief that properly written estimates eliminate customer pay. I have clients with customers willingly paying $8,000–$9,000 out of pocket. So, they’re writing good estimates.

There is no universally correct answer. Consumers pay for insurance and have the right to use it, but many have valid reasons to hesitate. Repair shops should not influence their decision, but instead provide education, transparency, and resources. By embracing a “Help Me Decide” philosophy, shops can build trust, improve customer experience, and better align with today’s economic and insurance realities, while recognizing that customer-pay clients are more price-sensitive and require a more thoughtful, explanatory approach.