Steering Is a Hail Insurance Trick To Save Big Money

You might think that the insurance company has your best interests in mind but in-fact they only have one thing on their mind when you file a claim.  How can we save money and not have to pay what is just?  They have many techniques on doing this including but not limited to steering customers to DRP’s and forcing total loss on vehicles that would cost too much to fix.

In this article we are going to not only cover the fact that steering is still very widely practiced in the insurance industry but also what that means to the shops that they are being steered to.  This is not a one way street and it takes 2 to tango.  The DRP shop is also in a bad way when it comes to this practice because if they don’t do what the insurance company tell them to do then they will be dropped from the list and will not receive any more clients from them.

What is a DRP? 

A DRP is where the insurance company steers the customer to.  It is a body shop or collision center that agrees to play ball with the insurance company.  This playing ball is cutting corners, repairing parts that should be repaired, not charging storage fees, and using after market parts that many times will not fit right and are basically much cheaper than the original parts a consumer would want on their car.

What exactly is steering?

When you call your insurance company and file a claim they will try to make it sound like you only have one or a couple of choices when it comes to getting your car damage appraised and repaired.  They will tell you that the place they want you to take it is the best in town or they will say that the shop is the best “certified” shop and you should take it there to get the damage appraised and repaired.

When you have your vehicle appraised by one of these DRP shops they will cut corners, put after market parts and do anything they can to make the estimate as cheap as possible.  I’ve seen one of these places appraise $4,200 in damages for $700 just to deceive the customer into leaving it with them.  Once the customer left it with them they submitted a supplement and bumped the total up to $2,800 which was still way to low to fix it correctly.  They cut many corners and the repair was not nearly what it should have been all because they need to bend over backwards to be on the DRP list.

Is it legal to steer?

You must understand that this practice is not completely legal but they have perfected the method with terminology like you need to take it here to get your estimate.  They are basically steering but are not telling you the truth that you have the right to take it anywhere you would like.

It is in direct violation of the 1963 Federal Consent Decree.  This Decree says that a law suit was brought against the insurance industry by former US Attorney General Robert F. Kennedy. That suit supposedly said that a conspiracy had existed among 235 different insurance companies to artificially suppress insurance claims and defraud consumers. Steering was one of the elements of the alleged conspiracy.

The 1963 Federal Consent Decree was a document in which the defendant insurance companies said, in effect “No We Did Not Do That” and “We Promise to Not Do it Anymore.”

Click Here to view the 1963 Federal Consent Decree Document.

While this 1963 Decree is active law, there really seams to be no desire for the enforcement of the law and thus insurance companies practice this “Steering” on a daily basis.  they have since then however become much more tricky in their steering practices that there is no way they will ever get in trouble for doing it.  The only way that we can do anything about it is to become more informed as consumers.

By the way the only people eligible to petition a court for enforcement of the Consent Decree are those who were a party to the original litigation. The defendant insurance companies are not going to request enforcement – and the current US Attorney General shows no signs of wanting to enforce it, so we owe it to ourselves to become more informed consumers and inform our fellow neighbor about the practice.

Unless we do something about it ourselves and inform people around us Insurers will still continue to  “Sell” Consumers on using a particular DRP repair facility or provider by offering to “Guaranty” on the repairs they perform.   They will also say that they do not guarantee any other shops that are not on their DRP program.  This means both the insured and repair facility agree to a very specific method of repair, scope, and cost of repairs as defined by the insurance company.  Both the repair facility and the customer are at the mercy of what the insurance company will approve and what corners they demand be cut.  Don’t think for one second that the insurance company will advise the best possible repair because they are not in the business of quality they are in the business of saving money from claims made.  When the insurer has “Low Cost” as their primary objective, quality – safety, and – post repair resale value suffer drastically with no remorse.

When a Consumer attempts to have the insurer back up their “Guaranty” of the repairs, they are stone-walled by the insurer and their “Partner” repair facility with assertions that the repairs are “Just Fine.”  I’ve seen this time and time again.  A customer knows that a repair has been rigged and does not look or seem right and they are argued against and commonly you will hear “we are the experts”.

Only when the Consumer pays to have the repairs inspected by a qualified repair expert does the insurer agree to back their “Guaranty” by either re-repairing or “Totaling” the insured property. When the insurer tells the Consumer they will “Total” the insured property (typically a vehicle) that statement is itself mis-leading. What actually happens is they either buy or arrange for the repair shop to buy the vehicle.

By not processing the claim as a “Total Loss”, insurers can get around any “Title Branding” laws and sell the poorly repaired (sometimes unsafe) vehicles with “Clean Paper” to unsuspecting Consumers.  The Policyholders’ Bill of Rights includes provisions that address the inherent flaws and potential dangers of “Steering.”

Given the illegality of “Steering” plus the high potential for fraud -plus the increased risk to public safety as a consequence of “Steering” practices  the Insurance Consumer Advocate Network and many other organizations have taken as tand against the practice and are educating the public at no gain to them because they know how bad this practice is for us.