What is Steering?
Steering is a practice used by insurance companies to direct policyholders or claimants to specific repair facilities or away from others. This tactic is often employed in the context of auto insurance claims.
Insurance companies use steering in several ways:
Pressuring customers: They may strongly recommend or insist on using a specific auto repair shop.
Offering incentives: Companies might provide benefits for choosing their preferred vendors.
Guaranteeing repairs: Insurers may offer to "guarantee" repairs if customers use their suggested shops.
Using misleading language: Adjusters might use wording that leads customers to believe they must use a specific shop.
Claiming warranty issues: They may falsely state that repairs won't be warranted unless done at their preferred shops.
Insurance companies often have agreements with certain repair shops, known as Direct Repair Programs (DRP). These agreements typically involve the shops agreeing to use cheaper parts or methods in exchange for a high volume of referrals. This arrangement can lead to cost savings for the insurer but may result in lower quality repairs or diminished vehicle value.
It's important to note that steering is illegal in North Carolina and you have the right to choose your repair facility.
Delay and Deny Strategies
Insurance companies employ the "delay" and "deny" strategies as part of their tactics to minimize payouts and maximize profits. These strategies are often used in conjunction with each other and are two of the "Three D's" commonly attributed to insurance industry practices.
Delay Strategy
Insurance companies use delay tactics to:
Prolong the claims process, hoping claimants will give up due to frustration.
Request excessive or irrelevant documentation repeatedly.
Claim ongoing investigations without providing updates.
Hold onto money longer, improving their bottom line.
Exploit policyholders' financial vulnerabilities, pressuring them to settle for less.
Deny Strategy
The deny strategy involves:
Outright rejection of claims.
Offering low settlement amounts.
Using claims adjustment software to keep payouts low.
Making the process difficult so claimants drop their claims.
Portraying claimants as attempting to defraud the company.
These strategies are designed to wear down claimants, discourage pursuit of legitimate claims, and ultimately protect the insurer's financial interests at the expense of policyholders. By recognizing these tactics, claimants can better prepare to challenge denials and assert their rights effectively.
“Right of Appraisal” Clause
Your insurance company’s initial estimate does not carry the final word and often falls short to compensate for a proper repair.
“What does it mean to be ICAR Gold?”
ICAR Gold class shops have completed rigorous training demands to achieve the highest levels of industry recognized training. But Why does this matter? Click the link to find out.
