Auto Insurance Claims: Why does auto insurance like to issue a “supplementary check”?, subjective choices, insurance estimate

Question
When an appraiser inspected my car, I gave him a repair store estimate and told him his estimate should be at least the costs as the repair store estimated unless the insurance can refer me to the store where your estimate is accepted. However, he still wrote a low estimate for my insurance and my insurance sent me a check based on their low estimate and said I can go to any repair store. I do not understand why the insurance likes doing so. If the insurance thinks their estimate is more accurate, they should refer me to a repair store where their estimate will be accepted. If they cannot find a repair store, the insurance should send me the check based on the repair store’s estimate, right?

However, the insurance does not want to send me the supplementary check but is willing to pay it to the repair store. I think whether I should have my vehicle repaired or not and how I pay the repair store is totally my business. The insurance just needs to pay me the real repair costs. Since the insurance can pay the repair store a supplementary check, why can’t they pay the insured directly? Can you explain why the insurance wants to pay the insured low estimate but is willing to pay the repair store a supplementary check additionally? It seems the insurance hopes the insured will not have his car repaired. Thus, the insurance can cut the supplementary check. Is that what the insurance tries to do? If so, how shall I request the insurance send me the check based on the repair store’s estimate or the supplementary check?  

Answer
Estimateas are just that - estimates.  They are subjective, not precise.  The body shop estimate will tend to be high because they benefit from a higher repair bill and will make their subjective choices that way.  The insurance estimate will be strictly what the appraiser sees and knows must be rapired.  He will not guess that something needs to be done, but the shop will.

A lot of times there is hidden damage that will not be known for sure until the vehicle is torn down.  Insurance companies will not write this until it is certain.  Body shops often will guess and write this in advance.  Sometimes their estimate include unnecessary repairs.

Once the vehicle is torn down, if the shop finds more damage than is on the insurer estimate, they ask for a supplement.  And the insurer will usually agree, unless there is a difference of opinion.  This is how insurers make sure they do not overpay for unnecessary repairs.  They all do this.  If they did not, they would consistently overpay the shops, who have a clear motice to over-write.

Most insurers have direct repair shops they refer clients to.  They have relationshsips with these shops and trust them not to overcharge.  if you go with one of these shops, the process usually goes faster.  if you live ina  rural area, there will be fewer of thes shops available.  Also, smaller insurers have less of these shops.

The insurer normally pays the shop direct because they know the shop has done the work and does not want the customer to take the money and not pay the shop.  But if you make it clear you will not have the repairs done, you could ask the insurer to pay you instead for the supplement.  They really can't say no, but you may have to sign a guarantee that the shop will be paid for work they do.

The only time they can force you to have repairs done, is if they insure your car, and are unwilling to continue insuring it without repairs, because they believe it is unsafe to drive.

The only way you will be able to get the insurer to pay you more money without having the repairs done, is to specifically point out the items they are missing on their estimate.  If you can do this, you should ask to meet with the supervisor in person to do so.