Auto Insurance Claims: 3rd party damage claim - payment to body shop?, insurance comapny, insurable interest

Question
We are in Maryland.  My husband was in a minor accident (no injuries) and there is no dispute as to fault.  The other person's insurance company did an inspection and estimate and offered us 50% less than what our body shop estimated.  Her insurance company states that it would work with the body shop to reach an agreed amount and insists on paying the shop directly for the difference.  Can they refuse to pay us directly for the full value of the damage?  I understand that 1st party claims are paid that way to protect any lienholder or the insurable interest of the company, but I have never heard of that in a 3rd party claim situation.  We have not yet decided if we will have the damage repaired.  Obviously if we do not, I do want to be fairly compensated for the damage.

Answer
Hi Krista,

In this case what the insurance comapny is doing is to say that their estimate is correct and they are willing to pay you that amount. They will claim that the additional amount is in dispute and will only be paid after verification by their appraiser at your chosen body shop. They want to verify that the additional work is necessary and also see if they can negotiate with the shop to charge less money. That is the standard process insurance comapnies go through in order to save money. They do this because they know that a good percentage of people will never get their car repaired and they get to save the difference.

I hope this helps
Richard Hixenbaugh