An auto accident requiring vehicle repair is typically, at a minimum, an inconvenient disruption in the auto owner’s life. It is also an opportunity for an insurance company to provide needed service by assisting the auto owner through the claims process. Operating in an intensely competitive environment, many insurance companies have developed streamlined processes in which enhanced services are provided when an insured uses one of the insurer’s recommended, or preferred, auto repair shops. However, some segments of the auto repair industry not aligned with insurers have sought to interfere with this relationship by limiting insurers’ ability to make those recommendations.
Under the preferred repair shop model, insurers negotiate with shops to designate them as preferred shops because they are able to perform repairs quickly and efficiently, and can keep costs low while delivering exceptional service. Insurers designate certain shops as preferred because they meet high standards regarding equipment, training, and service. These shops are typically authorized to begin repairs right away without having to receive approval from adjusters or appraisers. It is because preferred shops can deliver such a high level of service that they are frequently chosen by consumers to perform their repairs.
NAMIC believes consumers should be able to choose where to have their cars repaired, and it opposes legislative or regulatory measures that would impair insurers’ ability to make recommendations regarding repair options that are potentially beneficial to the consumer.