UMC Repair Estimate Discrepancy

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PostPosted: Mon Aug 18, 2008 11:53 pm   Post subject: UMC Repair Estimate Discrepancy  

Hello,



I've just found this forum and I must say that there certainly is a wealth of information here. I hope that I'll be able to contribute as much as I'm learning.



I've used the search function and so far I've not found an adequate answer to my question.



Here's the scenario:



I was hit from behind in my '03 BMW while sitting stopped in traffic. The negligent party is at fault as per the police report. He's also uninsured. That means that my claim is filed with my insurance company (USAA) as an Uninsired Motorist Claim.



Since I'm pretty new in the local BMW community, I've asked the car club members to recommend a repair shop for my baby. As is my right, I selected a shop based on enthusiast testimonials and a look at some of their work, then took my car in to get an estimate.



The estimate came back just over $10K to fix the rear quarterpanel, trunk, bumper, trim, etc. Then the USAA adjuster took a look at the car and came back with a quote just under $7k to fix it. The discrepancy, according to USAA, is that the shop parts prices are higher than USAA thinks they should be and the labor is more expensive than they're willing to pay. This sounds like complete nonsense to me; if the labor and parts at this shop were far more expensive than any other shop, how would they stay in business? I have just received both quotes in writing so I'll be going over them as soon as I can. One interesting thing of note is that there are 11 fewer line items on the USAA quote versus the body shop quote. Another difference is that the shop wants to charge me for labor tax, and USAA hasn't included that (or it doesn't appear to at this time) on their quote.



I don't really know how to proceed from here. I would like my car to be fixed at this shop due to the quality of work they do, but I don't really think that I should be paying 1/3 of the cost to do so, when the accident was through no fault of my own.



Does anyone have any advice as to how to go about getting my insurance company to pony up the cash to fix my car to my satisfaction? Failing that, and ideas as to how I should proceed with this?



Thanks in advance.



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PostPosted: Tue Aug 19, 2008 12:17 am   Post subject: Update  

I just wanted to point out that I'm in the state of Washington and my UMPD coverage is up to $30k with a $100 deductible. Not sure if that helps...

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PostPosted: Tue Aug 19, 2008 1:10 am   Post subject:   

The _only_ thing you need to do is give the USAA apprasial to the shop and asked them to call USAA if they cannot repair the vehicle for that amount.



I'll quickly sum up some answers for you... question, if you took your BMW into 5 different repair centers would you agree that you'd get 5 different repair amounts (if not, try it). As such, why is this? When you have the answer to that question, you will see why the USAA apprasial can be different from one shops estimate. Bottom line is that USAA will obtain an agreed repair price from the shop of your choice.



It's also possible that USAA used LKQ (salvage) parts in their estimate and the shop did not. It's also possible that USAA did not write all of the possible damage to the vehicle and the shop will simply submit an estimate. This is normal. It just means the shop will guess as items needing repair as it's money _in_ their pockets. The insurance company won't guess... as it's money _out_ of their pockets and they can simply wait for the vehicle to be disassembled before finalizing their amount.



One more thing... why do they charge a higher labor rate them most other shops? Because they can. Many people would simply pay it (prior to this claim did you know what the going labor rates were?).

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PostPosted: Tue Aug 19, 2008 5:56 am   Post subject:   

Hi emp, its true that if you take your vehicle to five different body-shops you will get five different quotes for the same repair work. The estimate even depends on the locality where the body shop is situated.



There can be several factors contributing to the difference between the estimates.



Probably USAA has got the estimate from one of its direct repair program associates. The direct repair shops work upon a agreed price with the insurance companies. Hence, their labor cost and repair cost may vary.



Secondly, as tcope has already pointed out, the insurance company may be using the LKQ parts or AME parts to repair the damages, whereas the other body shop has estimated with OME parts.



On the final note, its not unusual for the body shops to inflate the repair charges. The best you can do, get a third party opinion and obtain a quote from another body shop. It'll help you to negotiate the settlement with the insurance company.



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PostPosted: Tue Aug 19, 2008 9:50 am   Post subject:   

Welcome emp to the community...



As Tcope said, just give the shop USAA's estimate, it will have the adjuster that wrote it's name and number on it...have the shop contact the adjuster PRIOR to beginning repairs...the shop will see quickly what the differences in the sheets are...the adjuster will likely go back to the shop once the vehicle has been disassembled...Ins company's pay usual and customary labor rates for the area...if this shop for instance is charging you their 'door' rate of say 60 bucks an hour and all other shops in the area are charging 48 an hour, and your shop refuses to move from their 60 bucks you have a problem...i'm sure they are a good shop but they aren't the ONLY good shop i assure you...more than likely the adjuster and shop manager will come quickly to an agreed price...let them handle it between themselves...BEFORE the repairs begin...make sure you are not going to be out of pocket more than your deductible...unless you agree to that....also re: the parts...could be either used parts, (which your policy allows, and I know you love your beemer but it is a six year old CAR...not a child.. Wink )....or could be that the shop is marking them up higher than USAA allows...let us know what the differences are, and again, I'd let the shop and adjuster come together on this, and explain it all to you prior to your signing a repair auth at the shop.



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PostPosted: Tue Aug 19, 2008 3:37 pm   Post subject:   

Thanks for the replies everyone!



After going over the two quotes, the majority of the cost differential is in the labor costs. I think you're right, Lori, in that the shop wants to charge $60/hr or so and USAA only wants to pay $48/hr. You're all correct, of course, in assuming they'd suggest AM parts which are significantly less expensive.



After speaking with the owner of the repair shop, it seems that this particular appraiser and repair shop have some history. There's a lot of animosity displayed from both sides and I really don't know if they'll be able to reach a mutually agreeable solution. The owner of the shop is a very helpful guy, but I don't think they're going to budge on the price. It doesn't sound like the appraiser is going to move, either.



So now I realize that I've probably made another mistake. The car is sitting disassembled (AFAIK) at the shop in question. Now that I'm assuming they'll never reach an agreement on price, how do I go about getting other estimates from other shops? The car wasn't drivable after the accident and I'm sure it's even less drivable now. I never gave the shop verbal authorization to start repairs on my car, but when I dropped it off I signed some paperwork that, to my knowledge, only authorized them to start repairs when I said "Ok" and that other standard things such as "if the repair costs 10% more than we thought we'll let you know before we do it," and "If your car is stored here after we fix it we will begin to charge you storage fees." I realize that this is completely my fault for moving too quickly and not understanding the process fully. I don't think I signed a repair authorization that allows them to begin repairs without my verbal consent, but now I'm beginning to question my own memory. Mea Culpa!



My claims adjuster from USAA (not the appraiser) called me and said that a check was sent to the shop for the USAA approved amount. I still haven't authorized repairs, but is this normal? Should I have them cancel the check?



Now that my embarrassment is out in the open, any further ideas? Should I have USAA tow my car to another shop for an estimate? Lori made a good point in that the car is almost 6 years old, maybe it's time to move on.

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PostPosted: Tue Aug 19, 2008 4:41 pm   Post subject:   

Really USAA needs to address this matter, not you. They are coming up with a repair cost and while it may be reasonable for the area, they still have some responsiblity in making sure the vehicle is at a shop that can repair it for that amount. IMHO, the adjuster and/or appraiser should be calling the shop to see if they can work something out. If not, USAA should pay to have the vehicle moved to another shop of your choice...one that can do the work for the labor rate. USAA needs to address this as there are many possible ways to address this situation and it's probably going to require at least a little more money on their part (at least tear down time at the current shop and an extra towing fee). But its also possible that the shop will not want to loose the business and perhaps some agreement can be reached. Again, USAA needs to handle.



$48 to $60 is a huge difference. You might also want to call around and find out if other shops will honor the $48 rate and if so, ask the shop why they charge $12/hour more. That is not chump change. If not, ask USAA why the only allow $48/hour.



(P.S. Does the shop have the words Premier or Prestige in it?)

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PostPosted: Tue Aug 19, 2008 5:00 pm   Post subject:   

Well, I'm officially an idiot.



I definitely signed a repair authorization when I dropped my car off at the shop. I wrongly assumed that USAA would pay for repairs and there'd be no problem negotiating the cost. Since it turns out that this isn't the case it looks like if I don't want to pay the difference I'll have to breach the repair authorization contract. I have no idea what it will cost to breach this contract, but I think that it won't be inexpensive. I think I've totally screwed myself over here.



And no, there's no 'Premier' or 'Prestige' in the name. Smile

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PostPosted: Tue Aug 19, 2008 5:13 pm   Post subject:   

I don't think your screwed and I don't see that you've done anything wrong.



My recommendation would be the following; called a few other shops in the area and ask if they would honor the $48/hour labor charge. You may want to even ask them what they usually charge if it's more. Speak to your USAA adjuster and ask them if they can speak to the shop and work something out (USAA has some obligation to do this as they are the ones coming up with what they allow. Some adjusters might tell you it's not their responsiblity as they are paying what many shops will honor but USAA is a good company and will probably assist). I'd share the information that you obtained from the other shops so that the adjuster can tell the shop what the deal is in the area (I see no reason why one shop would charge 25% more then most other shops). If they cannot come to an agreement, see if USAA will pay the tear down cost and move the vehicle to another shop (I'm guessing the tear down needed to be done in order for USAA to come up with the amount owed... you did not know how much USAA would pay for a labor rate so I don't think USAA should stick you with the bill).



I'm not trying to be mean here but it's also in USAAs interest to have the work done someplace else. It sounds mean but it helps heep the labor rates lower for everyone in the area.

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PostPosted: Tue Aug 19, 2008 6:48 pm   Post subject:   

I don't think you're being mean. I appreciate your opinion.



I'm going to call some other shops and see how much it's going to cost to have it done there. My appraiser has offered (via the phone) to pay for reasonable tear down costs and a tow, but not for anything else the repair shop tries to stick me with if I break the contract. However he's not offering to deal with the shop any further. Apparently SOP is that the shop should be calling him and dealing, but I suspect that since I've signed the repair authorization they know they don't have to deal with me or USAA to make some money.



If the breach of contract bill comes to less than the difference between the repair estimates I think I'll just move the car somewhere else, where the appraiser and shop might actually work together to resolve this.



I can't believe how frustrating it's been to try and get my car repaired at the shop of my choice. I suspect the system is designed to be frustrating this way and that is really unfortunate.

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PostPosted: Tue Aug 19, 2008 8:08 pm   Post subject:   

An Authorization for Repairs does not commit you to having the vehicle repaired there... it's only your authorization for them to _make_ the repairs. That is, it's okay for them to work on the vehicle. In this case, the tear down. If you pull your vehicle they will want to be paid the towing charge and tear down fees. If they want to be nasty, they might try to charge you storage (I doubt it though).



You won't owe anything else to the current body shop.



I'll go out on a limb and say that you will find _plenty_ of shops in the area that will honor the amount USAA is paying. USAA uses the lower average rates for an area. Some shops will push the limits in an effort to get insurance companies to increase their allowance (this is fair) but usually to keep business they won't split hairs. On the other hand... a $12/hour difference is _HUGE_! When shops want more from me, it's usually $2-$4/hour.



Note: USAA uses either independent or staff apprasiers. Their adjusters are in-house and a different person. Also, when I said "mean", I ment about being mean to body shops. It's their job to be paid as much as possible and the insurance companies job to pay as little as possible. I'm not trying to imply that any shop is doing anything wrong.

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PostPosted: Tue Aug 19, 2008 8:12 pm   Post subject:   

What State are you in? In California for example you can file an online Dept. Of Insurance complaint. Usually this resolves the matter quickly as it costs roughly $1000 for an insurance company to respond. What does the nearest BMW dealer charge per hour. Probably the same or more. Is the shop USAA recommends BMW certified? Probably not as certification is actually more a gimmick than anything else unless you have an aluminum frame, but that is a topic for another thread. Ask USAA where they come up with $48.00 per hour and if they tell you they have surveyed the shops in the area ask to see that survey and then do your own survey. Don't include the USAA shop in your survey as they give discounts for USAA referrals oftertimes more than $10.00 per labor hour. You need to start doing everything in writing with your adjuster and advise them that you will be doing a post repair diminished value inspection.


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PostPosted: Tue Aug 19, 2008 9:33 pm   Post subject:   

Where to start with the last post.... how about the bottom,



The OP is insured with USAA as such, diminishment of value claim is almost an uncertainty (i.e it's a contractual agreement not liability). It's been mentioned before... please provide some reference showing that preferred shops offer a discount on labor. It just does not happen. USAA is really under no obligation to provide any "survey". Most of the time it's done by calling shops in the area. This is what the OP is going to do. $1000 to answer a DOI complaint? Where did you pull this one from? Staff answer those complaints and they are paid a salary. So it really does not cost anything. I could see USAA spending an hour or two to answer the complaint. I'm pretty sure those people are not paid $500/hour.



When it's shown that many other repair shops in the area charge $48/hour are you going to recommend the OP to file complaints against the shop for over-charging customers?

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PostPosted: Tue Aug 19, 2008 10:11 pm   Post subject:   

I have called 6 shops in the area, all recommended by BMW in my city. All cite work rates around $56-$58/hr. I responded to my appraiser with this information and his argument was that the rates quoted to me were the standard "off the street" rates and that USAA has negotiated the $48 rate with every one of them, save the shop I chose.



I called the shop and asked to speak to the original person who made my estimate, but he's out for a week. Another employee should be getting back to me soon. I plan to tell them that they need to work with my insurance if they want to keep my business. I don't care about the history or bad blood between them, and that USAA will pay the teardown and diagnostic fees to get my car to another shop. Hopefully they'll be willing to play ball.



tcope, thanks so much for your attention and help. This forum really is a great resource.

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PostPosted: Tue Aug 19, 2008 11:19 pm   Post subject:   

USAA's shop rate should not even be mentioned in the same breath as a shop's door rate (regular rate). Find out what the shop USAA recommends door rate is and you can calculate for yourself the cost of purchasing work from USAA. Remember DRP (direct repair) rates have no bearing on the PREVAILING RATE. Start using their insurance gibberish for your benefit and they will soon realize that you are not one to be messed with. Get that D.O.I. complaint filed ASAP as there is nothing worse than a D.O.I. complaint in the eyes of a claims manager. Heads will roll if someone drops the ball in the face of a D.O.I. complaint. Be sure to mention getting the D.O.I. involved with everyone you talk with and follow up with a letter to that person memorializing the telephone conversation. If that adjuster fails to properly document the file and bring the consequence of D.O.I. complaint to his/her superior your not so friendly adjuster will be out of a job. They will eventually pay to have your vehicle repaired properly without discounts but it does take a bit of work on your part.


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